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. Last Updated: 07/27/2016

Khristenko to Skip Finnish Wood Talks

Industry and Trade Minister Viktor Khristenko has canceled a planned meeting with Finnish officials this weekend intended to ease tensions over Russian timber duties and cross-border transportation problems, the Finnish government said Wednesday.

The dispute was highlighted at an EU-Russia summit in Khanty-Mansiisk last month, with Finnish and European Union officials criticizing Russia's decision in April to raise export duties on timber and plans to raise them by an additional 80 percent next year.

The canceled visit came a day after the World Wildlife Fund, a multinational conservation organization, wrote in a report that Russia constituted the world's largest source of illegal timber.

The country is also in the lead in terms of the quantity of illegal wood being sent to the EU, said Anke Shulmeister, WWF's forest policy officer. Russia exported more than 10 million cubic meters of illegally logged timber to the European market in 2006, she said.

Yelena Kulikova, director of the fund's forestry program in Russia, said the situation had not changed substantially since then. The Forestry Code "ignores the issues of legality or illegality of Russian wood and fails to address control operations," Kulikova said.

In May, the Federal Forestry Agency submitted to the State Duma a list of proposed amendments to the Forestry Code, she said, adding that only a few "relatively insignificant" amendments had been approved so far.

She said she did not expect the Duma to get to all of the amendments until September or October, when most of the deputies will be back from vacation.

A spokesperson at the Federal Forestry Agency declined to comment on the WWF report. Calls to the Industry and Trade Ministry went unanswered Wednesday.

Because of the impasse, a number of European companies, in cooperation with the WWF, have taken it upon themselves to mitigate the problem.

"Members of the Finnish Forest Industries Federation are cooperating with WWF Russia and WWF Finland to improve the wood-tracking system in Russia," said Anders Portin, Finnish Forest Industries Federation senior vice president.

He added that the federation was working to tighten logging regulations in Russia, from where its member companies, which together comprise 90 percent of the Finnish forestry industry, import 16 percent of their wood.

Finnish timber companies are especially eager to curb illegal logging, as they expect a significant increase in the demand for domestic wood because of Russia's plans to further raise the wood export duties next year.

"We have to do everything possible so that this key industry sector can function in Finland," Prime Minister Matti Vanhanen said at a news conference Wednesday, Reuters reported. Vanhanen's press service confirmed his comments by telephone.

The EU has taken several measures against illegal logging, though the report predicts that flawed legislation, which fails to account for a large number of products made from illegal wood, will allow 90 percent of illegal wood imports to continue to enter the EU.