FIFTH PART OF TIMBER IS CUT IN RUSSIA ILLEGALLY

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MOSCOW, May 19 (RIA Novosti) - A fifth part of the timber is cut in Russia illegally, a spokesman for the Ministry of Economic Development and Trade, Vsevolod Gavrilov, said at the 8th Congress of Russian Timber Merchants and Timber Exporters.

Experts say that at least 20% of timber is cut either illegally or with gross violations of the law," the deputy director of the department of property and land relations and of the economy of nature conservancy of the Ministry of Economic Development and Trade, said.

According to Mr. Gavrilov, a majority of such facts have been registered in the Far Eastern region. The export of unfinished timber to China increased by 14 times in the past five years, the spokesman said. "The growing export is accompanied by constantly lowering prices and the intensification of the activity of criminal structures and fly-by-night firms," Mr. Gavrilov said.

Apart from illegal timber cutting, the ministry spokesman named facts of the deliberate lowering of grades of its quality and not returning the money from its sale.

He also drew attention to growing foreign investments into the Russian timber industry. "The increasing internal demand is covered in the main by the activity of foreign companies," Mr. Gavrilov pointed out. In connection with this he came out for increasing investments in the timber industry by Russian companies.

The Ministry of Economic Development and Trade also stands for changing the system of levying export duties for unfinished timber. "The system of levying export duties must be changed," Mr. Gavrilov said. He noted that he did not mean to increase taxes for honest timber exporters.

The ministry proposes to replace the existing mixed tax, depending on the price of the contract by a specific tax which will depend on a concrete quality of timber.

At present, the tax equals 6.5% of the price of the export contract, but not less than 2.5 euros per cubic meter of timber.

In the opinion of the spokesman, the introduction of a specific tax will raise the fiscal load on unconscientious exporters, but it will be neutral for those who do not underestimate the price of the timber they sell in declaring it.

The total timber resources in Russia amount to more than 82 billion cubic meters, four times more than in the United States, 40 times more than in Sweden and 16 times more than in Finland.

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