Washington, DC, 13 March 2025 – It has been four years since a coup d’état deposed the democratically elected Union Government of Myanmar (UGoM). Severe sanctions against the new ruling military junta are effective, and they are exposing the negative impact of trade through non-sanctioned countries, like China and India. The report by Forest Trends concludes that buyers and traders risk significant reputational damage and potential criminal liability for continued business with the Myanma Timber Enterprise (MTE) through indirect imports from these non-sanctioned countries.
Context and Global Implications
- The United States, United Kingdom, Switzerland, Canada, and the European Union imposed targeted sanctions on Myanmar’s military leadership and associated businesses following the February 2021 coup against the newly re-elected Union Government of Myanmar (UGoM).
- These sanctions were further expanded over the years to include measures against the state-owned enterprises (SOEs) managing the gems, oil and gas, and timber sectors, which were key sources of revenue for the military regime, the state-owned Myanmar Foreign Trade Bank (MFTB), and the military conglomerates that run ports in Yangon.
Key Findings from the Report
- Trading Pattern Shifts: Global imports of Myanmar’s forest products have exceeded US$1.27 billion since the 2021 coup, namely into China and India.
- Indirect Trade Poses a Risk to Buyers: Though there has been almost no trade to sanctioned jurisdictions, there are concerns that products may be re-exported through non-sanctioned countries. Importers in sanctioned jurisdictions face multiple regulatory and criminal liabilities as a result.
- Transnational Criminal Organizations Benefit: China has emerged as the dominant player in Myanmar’s forest products trade, and trade routes have shifted into overland border areas where transnational criminal organizations may be involved.
- Sanctions Remain Significant: Actions against the MTE have led to a 30 percent increase in timber prices on the secondary timber market in Yangon and sanctions against the MFTB has limited Myanmar’s ability to engage in international transactions.
- The Junta’s Control Diminishes: The junta has lost control of large areas and vital trade routes to ethnic armed resistance organizations (EROs), including the Sagaing Region (which was previously the source of two-thirds of MTE’s production), depriving them of key economic benefits.
Key Recommendations for the International Community
- Require companies, especially financial institutions, to apply enhanced due diligence as part of their business relationships with Myanmar.
- Enforce sanctions to prevent the import of MTE-linked forest products, including those re-exported through other jurisdictions.
- Provide further support for opposition to the junta, especially those authorities in ERO territories managing land and forests, civil society organizations (CSOs) working for better land and forest governance, and the National Unity Government in exile.
- Implement enhanced due diligence to ensure buyers do not purchase illicit timber from Myanmar, including shipments re-exported through other countries (such as China and India).
Download the report, Timber, Sanctions, and Conflict: Myanmar’s Forest Sector Since the Coup.
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Forest Trends works to conserve forests and other ecosystems through the creation and wide adoption of a broad range of environmental finance, markets, and other payment and incentive mechanisms.
Forest Trends’ Forest Policy, Trade, and Finance Initiative aims to promote policies which harness the power of market incentives for the legal, sustainable, and equitable trade in timber and other commodities harvested from forest landscapes.