Transnational Crime and the Developing World

China is the leading importer and exporter of timber in the world as well as a major processing center;
it is also the primary destination for the majority of illegally-sourced timber exports. 316 The country
still lacks legislation that prohibits the import of timber derived from illegal logging. 317 Six of the top
10 countries from which China imports timber—Russia, Thailand, Indonesia, Viet Nam, Lao PDR, and
Papua New Guinea—have a very high risk for illegal logging. 318 The Environmental Investigation Agency
estimates that approximately 10 percent of China’s unfinished wood product imports are illegal timber. 319
Illegal logging is an attractive criminal enterprise because it involves little risk of interdiction and
punishment. Although timber and arms both have legal and illegal markets, shipments of timber draw
much less scrutiny from authorities than do arms. The transaction costs for illegal timber are therefore
typically less that other criminal markets because timber is a relatively innocuous commodity.
Criminals use fraudulent documentation, such as invoices and permits, to facilitate the laundering and
smuggling of illegal timber, a tactic also seen in the trafficking of arms and cultural property. Most illicit
timber can be laundered without difficulty, but easily identifiable protected species such as rosewood
may require additional obfuscation. Ninety-two tons of illegally harvested rosewood, some from
Honduras, were transported to Mexico, where it was then shipped to Hong Kong, misinvoiced as scrap
rubber from Guatemala. 320
D. Developing Countries
There are serious environmental impacts from illegal logging as well as considerable negative
externalities on the economies and security of developing countries. Illegal logging threatens timber
supplies and is a significant driver of deforestation and habitat destruction. The practice also deprives
communities and developing economies of indispensable revenues while financing violent groups.
Illegal logging occurs at unsustainable levels, severely depleting timber supplies and threatening
biodiversity and species conservation through habitat destruction and the exposure of wildlife to
poaching. In addition, the rampant deforestation of the planet is a significant cause of man-made carbon
emissions. Approximately 12 to 15 percent of greenhouse gas emissions stem from forest loss, which
is greater than the entire transportation sector worldwide. 321 Forests are extremely important sources
of food, goods, and employment for rural communities in developing countries, thus the environmental
impacts of illegal logging can have direct impacts on the well-being of communities.
Illegal logging and deforestation have been tied to drug trafficking in many cocaine-producing countries.
In Colombia, hundreds of thousands of hectares have been illegally logged in order to clear land for coca
cultivation; trees are also felled in cocaine production and transit countries to make room for landing
strips. 322 In addition, organized crime groups (OCGs) have laundered drug money by financing timber
extraction. 323
Illegal logging robs developing country governments around the world collectively of at least US$10
316
China imported US$22.8 billion and exported US$14.5 billion in lumber in 2014. Trade data based on Harmonized System (HS) Classification 07
for HS commodity code 44 in 2014. “UN Comtrade Database,” United Nations, accessed January 30, 2017, https://comtrade.un.org/data/; United
Nations Office on Drugs and Crime, TOC in East Asia and the Pacific, 96.
317
Laura Wellesley, “Trade in Illegal Timber: The Response in China,” A Chatham House Assessment (London: Chatham House, December 2014), 8,
https://indicators.chathamhouse.org/sites/files/reports/CHHJ2361_China_Logging_Research_Paper_FINAL.pdf.
318
“UN Comtrade Database.”
319
Environmental Investigation Agency, Appetite for Destruction: China’s Trade in Illegal Timber (London: Environmental Investigation Agency, 2012),
7, https://eia-international.org/wp-content/uploads/EIA-Appetite-for-Destruction-lo-res.pdf.
320
Kyra Gurney, “Hong Kong Seizes Record Shipment of Honduran Wood,” InSight Crime, December 18, 2014, http://www.insightcrime.org/newsbriefs/hong-kong-seizes-record-shipment-of-honduran-wood.
321
According to Global Witness, forests absorb and store significant amounts of carbon dioxide, and “when forests are destroyed or degraded, they
releases large amounts of this carbon back into the atmosphere as carbon dioxide.” See Global Witness, Forest Carbon, Cash & Crime: The Risk of
Criminal Engagement in REDD+ (London: Global Witness, 2011), 3, https://www.globalwitness.org/en/reports/forest-carbon-cash-crime/.
322
Edward Fox, “Colombia Seizes 450 Tons of Illegal Timber,” InSight Crime, July 19, 2012, http://www.insightcrime.org/news-briefs/colombia-seizes-
450-tons-of-illegal-timber; Matt McGrath, “Drug Trafficking Is Speeding Deforestation in Central America,” BBC News, January 30, 2014, http://www.
bbc.com/news/science-environment-25960481.
323
Quenton King, “Drug Traffickers Laundered $250 Million in 2015: Peru Official,” InSight Crime, April 28, 2016, http://www.insightcrime.org/newsbriefs/drug-traffickers-laundered-250-million-in-2015-peru-official;
Brian Clark Howard, “Drug Trafficking Poses Surprising Threats to Rain Forests,
Scientists Find,” National Geographic News, January 30, 2014, http://news.nationalgeographic.com/news/2014/01/140130-drug-trafficking-deforestation-central-america-environment-policy-reform/.
Global Financial Integrity
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