Business news from Ukraine

Illegal timber trade in Ukraine is about 30% of legal – minister

24 December , 2020  

Illegal timber trade in Ukraine is about 30% of the legal, or UAH 5 billion per year, Minister of Environmental Protection and Natural Resources Roman Abramovsky has said.

“This is a lot of money that can be used for forest management, fire-prevention measures, including replacing the species in the composition of forests,” Abramovsky said in an interview with Interfax-Ukraine.

According to him, in order to comprehensively solve forestry problems, the ministry is working on a strategy for managing Ukrainian forests until 2035, which, in particular, provides for the separation of economic and regulatory functions of the State Forest Resources Agency of Ukraine.

“Everything is kept in one body. There is a conflict of interests, corruption risks. Therefore, part of the economic functions must be given to a separate entity or business entities,” the minister said. He said that it could be one company or a concern with regional units.

The minister also expressed support for the development of electronic auctions for the sale of timber, its certification and traceability “from forest to product.”

In his opinion, it is necessary to provide for the possibility of auctioning both large lots for large woodworking enterprises and small lots for local producers, which today, according to him, “actually depend on the mood of the director of the forestry enterprise.”

At the same time, Abramovsky said that the issue of motivating the heads of forestry enterprises to boost profits remains important.

“Now the payments of a part of the net profit to the state budget are at the level of 90%. This simply depletes funds of enterprises. We will make proposals on this matter that the share of net profit should be 30%, since even in the current state the forestry industry pays UAH 6 billion in taxes, in fact receiving nothing from the state,” Abramovsky said.