Illegally sourced timber from Cambodia and Laos continues to enter Vietnam’s supply chains despite recent efforts to tighten legality controls, according to a new report from UK-based watchdog the Environmental Investigation Agency (EIA).
Falsified paperwork, manipulated harvesting quotes, and intermixing of timber from multiple sources are just some of the ways well-established criminal networks perpetuate the illicit trade, EIA teams uncovered during a four-year investigation.
“We repeatedly observed mechanisms through which timber from questionable sources could be incorporated into formal trade channels,” says Thomas Chung, forest timber campaigns lead for the EIA.
Vietnam is one of the world’s largest timber exporters. As a major manufacturing hub of furniture, flooring and other wood products, it plays a key role in international supply chains, shipping roughly US$17 billion in timber and timber products in 2025.
Timber from neighbouring Laos and Cambodia represents a relatively small share of Vietnam’s total supply, the EIA report says, accounting for less than 9 per cent of all timber shipments into the country. However, it carries an outsized legality risk that significantly undermines Vietnam’s efforts to ensure legal sourcing.
To maintain access to lucrative export markets, such as the US, the EU, Japan and China, the country has made several recent updates to its national timber legality framework, known as the Vietnam Timber Legality Assurance System (VNTLAS).
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The collusion of Vietnamese line agencies in the systematic laundering of illegal timber from Cambodia stands in stark contrast to the lip services these agencies provide during trade and legality negotiations.
Marcus Hardtke, conservationist, Cambodia
However, the EIA investigation indicates these efforts are being grossly undermined by persistent imports of illegal timber from Cambodia and Laos, exposing key weaknesses in the VNTLAS system. A consistent issue was the VNTLAS system’s reliance on paperwork to verify legality.
“The significance is not simply that illegal timber exists, but that it can enter formal supply chains accompanied by documentation that appears to demonstrate legality,” Chung says. “Documentation can easily be generated or adapted in ways that do not reliably reflect the true origin or legality of timber in Laos and Cambodia.”
According to Chung, the implications extend far beyond Vietnam’s borders: “The consequences will affect businesses trying to comply with laws such as the planned EUDR or the existing US Lacey Act, create unfair competition for responsible producers, and erode the confidence of responsible consumers.”
Crucially, the flagrant illegal trade undermines global efforts to tackle illegal logging, deforestation and associated human rights abuses, he adds.
Parallel systems of illegality
Based on a combination of field investigations, trade data analyses, and review of the regulatory frameworks governing timber harvesting and trade in all three countries, the EIA investigation details how illicit timber is moved across borders, documentation is generated, and legality is assessed in practice.
Between 2022 and 2026, field investigations involving on-the-ground observations and conversations with individuals involved in timber harvesting, processing and trade uncovered multiple cases of illicit timber being laundered into Vietnam’s supply chains.
In Laos, logging quotas that authorise timber harvesting within the footprint of specific development projects, such as mining, hydropower dams and transmission lines, are routinely manipulated. According to the investigation, quota holders use their harvesting permits to absorb timber illegally cut beyond authorised boundaries or above permitted volumes into legitimate supplies.
In Cambodia, a parallel process operates in economic land concessions intended for agriculture or infrastructure development. The investigation documented politically connected timber networks using concessions as a pretext for illegal logging beyond concession boundaries and inside protected areas.
The illicit timber is then processed and transported via laundering networks relying on political protection, corruption and collusion on both sides of the border to shift logs into Vietnam. This process occurs despite Cambodia’s long-standing log export ban.
All of this illegal timber gets paperwork through a “systematic” timber-laundering process, the investigation found. Processing facilities linked to quota holders or concession owners effectively act as what the report refers to as “legalisation hubs,” where timber from multiple questionable sources is mixed and issued with fabricated documentation that meets formal export requirements, including counterfeit certificates of origin, log lists, and export-import invoices.
Numerous operators told the investigation team they use a dual documentation system, whereby one set of paperwork is produced for export authorities in Cambodia or Laos, typically underreporting volumes to circumvent taxes and export limits. Another set is then produced for import authorities in Vietnam, showing the true timber volumes.
According to the report, the “weak rule of law, limited enforcement capacity and elevated corruption risk” in Cambodia and Laos aids perpetrators who operate these systems with little fear of reprisal. They’re further backed by political patronage, a system of informal payments, and organised intermediary criminal groups who facilitate the trade, the report says. Notably, the investigations found instances of operators in Vietnam actively engaging with intermediaries to source this high-risk timber and secure their supplies.
Legality controls must go beyond paperwork
Trade experts have expressed particular concern about the shared operating protocols criminal entities use to launder illegal timber into legitimate supply chains and furnish it with adequate paperwork.
“We documented repeated patterns of discrepancies between declared and actual volumes, parallel documentation systems, intermediary networks and the mixing of timber from different sources,” Chung says. These practices ultimately make it “extremely difficult” to distinguish legal from illegal timber and risk contamination of downstream supply chains, Chung says.
Another significant concern is the limitation of Vietnam’s existing VNTLAS timber assurance system in adequately detecting laundering and preventing illegal shipments. While additional legality checks have been introduced to the system in recent years, the EIA report notes it’s unclear how consistently these are enforced in practice.
Under VNTLAS, timber from Laos and Cambodia is deemed high risk due to those countries’ low scores on international benchmarks of governance effectiveness and is thus subject to extra scrutiny. In practice, however, this scrutiny just means extra attention to paperwork generated in the source country — not independent investigation.
“Where documentation originates in environments affected by governance challenges, paperwork alone cannot provide sufficient assurance,” Chung says. “Verification needs to be complemented by intelligence-led enforcement, targeted inspections, rigorous post-clearance audits, trade data analysis and other independent means of assessing whether documentation accurately reflects conditions on the ground.”
The prevalence of dual documentation systems is a long-standing issue, according to a forest trade expert with decades of experience in the region who asked to remain anonymous, citing the sensitivity of the EIA investigation’s findings and their ongoing work within the region. The findings are “no surprise to me at all,” they say. “We’ve talked about dual systems since 2008.”
However, the source notes there’s a minimal risk of timber from Cambodia and Laos reaching international export markets, such as the EU and US. Rather, it’s used for domestic consumption within Vietnam, mainly for making hardwood furniture, which isn’t in demand on international markets that seek deforestation-free supply chains.
Bankrolling forest destruction
According to Chung, any due diligence system that relies principally on documentation has its limitations. “Legality assurance systems need the capacity to look beyond paperwork and independently verify claims about timber origin and legality,” he says.
However, accomplishing independent checks and controls is particularly challenging in Cambodia and Laos. Civic space is rapidly shrinking in both countries. Efforts by independent forest monitors, activists and journalists to document illegal logging are frequently met with harassment, arrests, and restrictions on activities. Cambodia is ranked 151 and Laos 154 out of 180 in the Reporters Without Borders 2026 World Press Freedom Index.
“The less independent scrutiny there is, the more governments, companies and border authorities are likely to rely primarily on the existence of official documentation rather than independently verifying its credibility,” Chung says. “If that kind of documentation can itself be systematically manipulated, then the lack of independent oversight creates a significant blind spot for legality assurance systems worldwide.”
According to Marcus Hardtke, a forest activist who has worked in Cambodia for three decades, the relentless illegal timber trade is effectively bankrolling the destruction of the region’s biodiversity-rich forests.
“The case studies in the report are examples of the blatantly organised illegal logging that is still haunting Cambodia,” Hardtke, who wasn’t involved in the EIA report, tells Mongabay by email.
Deforestation driven by illegal logging, plantations and hydropower projects is ravaging forests in both Cambodia and Laos. Recent analyses of satellite data published by the Global Land Analysis and Discovery (GLAD) laboratory at the University of Maryland in the US show that more than half of Cambodia’s and Laos’s tree cover loss in 2024 occurred inside designated reserves. In Cambodia, 56 per cent of the nation’s tree cover loss was recorded within its protected area network that year; in Laos, the figure was 64 per cent.
“Vietnam has been sucking up the forests of Laos and Cambodia for over 30 years,” Hardtke says. “Unfortunately, ‘Vietnamese’ timber remains high-risk and responsible timber traders and importers should simply avoid it as the legality assurance cannot be trusted.”
The involvement of opaque actors on both sides of the border creates significant challenges for those looking to clean up the trade, Hardtke says.
“The collusion of Vietnamese line agencies in the systematic laundering of illegal timber from Cambodia stands in stark contrast to the lip services these agencies provide during trade and legality negotiations,” he says. Vietnam’s outsized focus on technicalities within its VNTLAS system and small-scale farmers is “tip-toeing around the elephant in the room, which is simply the lack of political will to stop the lucrative illicit trade,” he adds.
Toward stronger governance
With governments and companies increasingly relying on legality-based due diligence systems to prevent forest-risk commodities from entering global markets, experts say improving how well they work in practice benefits everyone.
The EIA report urges Vietnam’s timber authorities and enforcement agencies to strengthen the country’s timber assurance system by increasing the use of data and intelligence, fully considering the governance context of source countries in risk assessments, and implementing controls that go beyond mere documentation.
The aim is to strengthen, not replace, Vietnam’s existing timber assurance system, Chung says. “Vietnam has demonstrated a strong commitment to improving forest governance,” he says. “This is an opportunity to build on that progress and further strengthen confidence in the system.”
This story was published with permission from Mongabay.com.
