Letters of credit (L/Cs) are allegedly used by foreign operators looking to profit from Ghanaian teak exports in business activities that the government of Ghana has theoretically reserved for domestic firms.

According to the Ghanaian Chronicle, teak-exporting syndicates have made illegal or undervalued teak sales that have cost the country around US$4.8 million over the last two years.

False descriptions

The syndicates apparently use a variety of methods to disguise the value or nature of illicit teak exports, including under-invoicing, shipping unmanifested teak lumber and disguising teak as some other kind of wood.

According to the Chronicle, the true value and nature of teak exports are not always being shown in L/C documentation.

L/C monitoring

The journal says that in 2001 about a third of all timber exports were from illegal suppliers who sell at prices way below those fixed by the government. This apparently costs the Ghanaian economy around US$2.4 million a year.

The Chronicle says it is monitoring and studying a number of questionable L/Cs that it says may have been used in some of the deals it describes.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.