Government of the Russian Federation banned the export of roundwood, chips and veneer to “unfriendly countries” until the end of 2022

Government Decree No. 312 dated March 9, 2022 came into force; it bans, until the end of 2022, the export of roundwood (HS code 4403), chips (HS Codes 4401 21, 4401 22) and veneer (HS Code 4408) to countries unfriendly to Russia, whose list was endorsed by the Russian Government on March 5, 2022.

According to WhatWood data, Japan that was included in the list of “unfriendly countries” was the biggest buyer of Russian veneer: it accounted for 36% (260,000 m³) of this product’s Russian export in 2021 – second only to China.

Notably, the government committee on foreign investment control approved the sale of a 75% share in RFP Group, a timber industry group from the Far East, to Iida Group Holdings (Japan) on Novembeer 29, 2021.

The deal was supposed to be closed in mid-January 2022. It would provide the company with smooth sawn timber supplies from Russia for house kits and plywood production, where veneer is a raw material. As per the abovementioned Decree, the Japanese investor will not be able to provide its plants with Russian timber products at least until the end of 2022.

This restriction will also significantly affect raw material supplies to Finnish enterprises. In 2021, Finland became the biggest importer of Russian roundwood, having purchased 5.8 million m³ – second only to China.