Apr 12, 2007. /Lesprom Network/. The forestry industry, which is responsible for about 16% of industrial production in Finland, will be undermined after taxes on timber exports in Russia will be increased, Interfax reported with reference to Financial Times. According to the decree of Russian government of February 5, 2007 export duties will be raised gradually - from July 1, 2007, from April 1, 2008, January 1, 2009 and January 1, 2011. By 2011 rate of duty on some kind of production will reach 80% of customs value but no less than Euro 50 per cubic meter. Finland imports from Russia about 20% of timber needed but dependence of Finnish industry from deliveries from Russia is higher, indeed. For example, most of birch wood necessary for production of some grades of paper is imported from Russia. “A Euro 50 tax would ruin the economics of wood imports from Russia”, Matti Karjula, senior vice-president for wood supply for Stora Enso told FT. At present Stora Enso pays on average Euro 45 per cubic meter of Russian timber. Finnish forest industry employs about 200 000 people. Problems with deliveries from Russia will result inevitable in production curtailments and jobs elimination, FT said. The Finns consider that Russia shouldn’t introduce prohibitive export duties to boost development of domestic wood-processing industry. “You can build 100 wood-processing mills in Russia and continue exporting to Finland”, affirms manager of one of Stora Enso enterprises Ari Johannson. "There is no economic reason for this - it is nationalism," Anders Portin, director of the Finnish Forest Industries Federation told FT. Finnish companies could construct wood-processing enterprises in Russia themselves but they aren’t ready to invest necessary volume of funds, according to FT. “To build a mill it’s necessary to invest one billion Euro but after this you have to invest in construction of roads, railways and other infrastructure. It’s impossible to build a mill from scratch”, Finnish official, who participated in bilateral meetings with the Russians, told FT. Russian businessmen could invest more intensively in forest industry without waiting for tariffs hike, Jahannson says. With the first tax deadline approaching, Finland is turning to the European Union for help. Helsinki says the increases violate a standstill agreement Russia signed with the EU ahead of its planned accession to the World Trade Organization, agreeing there would be no tariff increases before it joins.