After five years of negotiation and development, Australia’s parliament last week passed the country’s Illegal Logging Prohibition (ILP) bill, its equivalent of the EU Timber Regulation and America’s Lacey Act. The law makes it an offence to import and process timber considered illegal in the country of origin, making both timber traders and manufacturers the [...]
After five years of negotiation and development, Australia’s parliament last week passed the country’s Illegal Logging Prohibition (ILP) bill, its equivalent of the EU Timber Regulation and America’s Lacey Act.
The law makes it an offence to import and process timber considered illegal in the country of origin, making both timber traders and manufacturers the possible target of prosecution.
For serious and serial offenders who “knowingly or recklessly import or process illegally logged timber products”, the maximum penalty is up to five years in prison, with a fine of A$275,000 for a company and A$55,000 for an individual.
The Australian government estimates that around 10%, or A$4bn worth, of the country’s timber imports would fall foul of the law.
Australian businesses offering timber legality and compliance verification services, and importers which have already put tougher timber sourcing and tracking systems in place, were expected to benefit from the bill.
Another chapter has been added to the saga of the Gibson Guitar Corporation (Gibson) forfeiture case that began with a raid of the company’s Nashville and Memphis manufacturing plants in November 2009. At that time, and again in an August 2011 raid, Gibson was suspected of violating the Lacey Act, which makes it unlawful to [...]
Another chapter has been added to the saga of the Gibson Guitar Corporation (Gibson) forfeiture case that began with a raid of the company’s Nashville and Memphis manufacturing plants in November 2009. At that time, and again in an August 2011 raid, Gibson was suspected of violating the Lacey Act, which makes it unlawful to “trade in any plant that is taken, possessed, transported, or sold in violation of the laws of the United States … or any foreign law that protects plants.” While settlement with the Department of Justice (Justice) was reached in the form of a criminal enforcement agreement dated July 27, 2012, the terms of settlement call for Gibson to pay a $300,000 penalty to the U.S. directed to the Lacey Act Rewards account, to pay a community service payment of $50,000 to the National Fish and Wildlife Foundation, and to invest in a comprehensive upgrade to what was deemed an inadequate compliance program.
Details of Gibson’s new compliance procedure are outlined herein. The term of the settlement is 18 months, but the ramifications should “reverb” with Gibson and other manufacturers, and their suppliers, for years.
The Department of Agriculture’s Animal and Plant Health Inspection Service is soliciting comments through Aug. 6 on the proposed three-year extension of the import declaration required for certain plants and plant products under the Lacey Act. This declaration must contain, among other things, the scientific name of the plant, the value of the importation, the [...]
The Department of Agriculture’s Animal and Plant Health Inspection Service is soliciting comments through Aug. 6 on the proposed three-year extension of the import declaration required for certain plants and plant products under the Lacey Act. This declaration must contain, among other things, the scientific name of the plant, the value of the importation, the quantity of the plant, and the name of the country from which the plant was harvested. For paper and paperboard products with recycled plant content, the importer is not required to specify the species or country of harvest with respect to the recycled plant product component but will be required to provide the average percentage of recycled content. If the product also contains non-recycled plant materials the basic declaration requirements still apply to that component of the product imported.
Comments should focus on (a) whether this declaration is necessary for the proper performance of APHIS’ functions, including whether the information has practical utility; (b) how to enhance the quality, utility and clarity of the information collected; (c) the accuracy of APHIS’ estimate of the burden of this declaration, including the validity of the methodology and assumptions used; and (d) ways to minimize that burden through the use of automated, electronic, mechanical and other collection technologies (e.g., permitting electronic submission of responses).
The National Retail Federation last week urged Congress to review and revise controversial rules on the importation of wood products and plant material that retailers fear could lead to unfair government seizure of merchandise ranging from furniture to musical instruments. “Retailers recognize the need for environmental conservation but the current law leaves them guessing on [...]
The National Retail Federation last week urged Congress to review and revise controversial rules on the importation of wood products and plant material that retailers fear could lead to unfair government seizure of merchandise ranging from furniture to musical instruments. “Retailers recognize the need for environmental conservation but the current law leaves them guessing on which products are legal and which aren’t,” NRF President and CEO Matthew Shay said. “Congress needs to carefully review the Lacey Act to ensure that the goal of eliminating illegal logging is its primary objective, not penalizing businesses that are doing their best to comply with an unworkable law.”
Shay commented as a subcommittee of the House Natural Resources Committee prepares to hold a hearing this afternoon on legislation that would reform portions of the law. Laurie Everill, regional customs compliance and operations manager for NRF member IKEA-North America, is scheduled to testify to the Subcommittee on Fisheries, Wildlife, Oceans and Insular Affairs on the challenges facing companies seeking to comply with the law, and changes sought by NRF to address those challenges, improve enforcement and compliance with the law, and support its goal to end illegal logging.
At issue is the Lacey Act, a century-old environmental law originally directed at illicit trade in threatened and endangered animals. Congress expanded the law in 2008 to ban trade in products containing illegally harvested wood or plant material. Those changes also require importers to document the genus, species and country of harvest of any wood or plant material contained in an imported product. The Justice Department considers merchandise containing illegally harvested wood or plant products to be contraband, possession of which can result in fines, imprisonment, and seizure and forfeiture of the goods.
Twenty Canadian industry associations are presenting a united front against the U.S. government’s decision to broaden environmental legislation to the point where it’s getting in the way of doing routine business. Changes to the Lacey Act mandated by a 2008 farm bill require exporters to record where every scrap of plant fibre in a product [...]
Twenty Canadian industry associations are presenting a united front against the U.S. government’s decision to broaden environmental legislation to the point where it’s getting in the way of doing routine business.
Changes to the Lacey Act mandated by a 2008 farm bill require exporters to record where every scrap of plant fibre in a product originated. While the changes were made in an effort to help preserve the rainforests against untenable farming practices, a huge majority of the products containing plant materials that the U.S. imports originate in Canada, says the Canadian Manufacturing Coalition. The sheer volume of goods originating in this country should give Canadian firms an exemption.
“To date, the imposition of this requirement on shipments from Canada has caused considerable disruption and has imposed unnecessary compliance costs,” a March 16 letter the Regulatory Cooperation Council Secretariat of the Treasury Board of Canada says. “APHIS (the Animal and Plant Health Inspection Service of the US Department of Agriculture) receives approximately 6,000 import declarations every month and approximately 90% of these are filed by shippers from Canada. The direct costs pale in comparison to the in-house, corporate cost of completing, reconciling, matching and storing the required declaration information to the shipment destined to the United States.”
Concerns are starting to snowball, CMC says. Companies in the auto and auto parts sectors, the chemical and plastics industries, the bioproducts industry and even nutrient supplement makers are starting to get worried about how to deal with “such a blunt import requirement” when supply chains cross both sides of the Canada-U.S. border.
Canada has a solid record when it comes to forestry management, the CMC says. Member associations have asked that the bilateral committee looking at ways to trim the thickening that has occurred at the border make the Lacey Act a top priority.
The letter’s full text can be downloaded downloaded here.
Source: Canadian Manufacturing Coalition
A group of Senate Republicans say they are taking aim at the “broad overcriminalization” of a federal law that makes it a crime to import into the United States illegally obtained plants or wildlife. U.S. Sen. Rand Paul (R-KY) is seeking to make violations of the Lacey Act (16 U.S.C. §§ 3371–3378) civil offenses punishable [...]
A group of Senate Republicans say they are taking aim at the “broad overcriminalization” of a federal law that makes it a crime to import into the United States illegally obtained plants or wildlife.
U.S. Sen. Rand Paul (R-KY) is seeking to make violations of the Lacey Act (16 U.S.C. §§ 3371–3378) civil offenses punishable by fines rather than criminal prosecution. His proposed Freedom from Over-Criminalization and Unjust Seizures (FOCUS) Act of 2012 — outlined in S. 2062 — would also jettison references to foreign law in the 112-year-old statute thereby blocking the government from prosecuting companies based on alleged overseas violations.
Paul, who sits on the Senate Energy and Natural Resources Committee, said “victims” of the Lacey Act include Henry Juszkiewicz, chairman and CEO of Gibson Guitar Corp. In August, federal agents raided Gibson Guitar factories in Memphis and Nashville to determine whether Gibson was using illegally harvested ebony wood from protected forests in India.
Hailing the Republican proposal, the National Association of Criminal Defense Lawyers (NACDL) said the FOCUS Act would “bring sanity to the criminal law,” the group’s president, Lisa Wayne, said in a statement. “The law in its current form is overly broad and vague, subject to abuse by prosecutors, and, importantly, can trigger extremely harsh criminal penalties without regard to whether someone accused under the law acted intentionally or knew they were violating a law,” Wayne said.
The U.S. Chamber Institute for Legal Reform (ILR) is also among the bill’s supporters. “The underlying goals of the Lacey Act, including protecting endangered species and promoting stewardship of environmental resources, can and should be upheld, and federal laws ought to give prosecutors the necessary criminal enforcement tools to pursue bad actors” ILR President Lisa Rickard said in a statement.
S. 2062, introduced Feb. 2, is pending before the Senate Committee on Environment and Public Works, chaired by Sen. Barbara Boxer (D-Calif.). The FOCUS Act is cosponsored by Sens. Tom Coburn (R-Okla.), Mike Enzi (R-Wyo.), Jim DeMint (R-S.C.), Mike Lee (R-Utah) and James Risch (R-Idaho).
Source: Chris Rizo | Law & Industry Daily
An expert in the field offers lessons to the hardwood industry coming from the recent Gibson Guitar raids and the concerns being raised about the Lacey Act… The Fish and Wildlife Service (FWS) claims in its search warrant affidavit that Gibson 1) improperly filed Customs declarations, and 2) imported Indian rosewood guitar backs and ebony [...]
An expert in the field offers lessons to the hardwood industry coming from the recent Gibson Guitar raids and the concerns being raised about the Lacey Act…
The Fish and Wildlife Service (FWS) claims in its search warrant affidavit that Gibson 1) improperly filed Customs declarations, and 2) imported Indian rosewood guitar backs and ebony fretboard blanks under the wrong Harmonized Tariff Schedule (HS) codes. These shipments allegedly left India as “finished parts for musical instruments” (HS 9902) and arrived in the U.S. classified as “veneer” (HS 4408), but should have been classified as “lumber” (HS 4407) all along. Indian law allows the exportation of HS 9902 items of rosewood and ebony, but not lumber (HS 4407) of the same species, unless sawn from imported logs.
Under the Lacey Act, the burden falls on the importer of record to ensure that everyone in the supply chain classifies the products correctly. In this case, Gibson is on the hook for misclassifications by the shipper, the broker, and the receiving company—whether or not Gibson had any role in or knowledge of those misclassifications. Not knowing is no excuse.
With the Lacey Act amendment in place, a “knowingly” misclassified shipment could result in jail time and fines of up to $250,000. “Unknowing” misclassifications carry less significant penalties, but what importer or manufacturer can afford to defend a position of ignorance of proper codes? As such, proper HS classification ought to be of primary concern to everyone in the trade from this day forward. Improper codes may be the “broken taillight” that gives officials probable cause to pull companies over and search for more serious violations.
Click here to read more alarming lessons that every forest products importer, manufacturer and distributor need to learn from these events.
In August, armed U.S. federal agents raided the Gibson Guitar Corp. in Tennessee on the suspicion that Gibson had violated the trade laws of India. Since then an assortment of politicians, flooring companies, environmentalists, union representatives and instrument makers have been locked in a struggle over the enforcement of a 2008 amendment to the 111-year-old [...]
In August, armed U.S. federal agents raided the Gibson Guitar Corp. in Tennessee on the suspicion that Gibson had violated the trade laws of India.
Since then an assortment of politicians, flooring companies, environmentalists, union representatives and instrument makers have been locked in a struggle over the enforcement of a 2008 amendment to the 111-year-old Lacey Act. [...]
Though I agree with the goals of the Lacey Act, the implementation of the amendment has still been troublesome. The main problem is that the law requires companies to shun illegally produced or exported products without giving them any help in determining whether a particular product is safe to buy. Instead, importers are under vague orders to exercise “due care” in ensuring that the products they bring into this country are legal. But what, exactly, is “due care?”
In some cases, there are red flags that should alert companies to the likelihood that they are in dangerous territory. In 2009, for example, a small Florida-based dealer in decorative wood ran afoul of the amended Lacey Act after he accepted an offer of three pallets of Peruvian hardwood from a woman he did not know, who requested that payment be made out to her personally. It turned out, unsurprisingly, that there was significant evidence that the documents accompanying the wood were forged. While the dealer used a broker to handle the transaction and was not aware of the problems himself, the wood was still seized before it reached him. His petition to have it returned was denied on the grounds that he “did not do all he could within his power to comply with regulations and ensure that the shipment was authorized by an export permit that properly documented the required information.”
That buyer probably got what he deserved. Willful ignorance is not true ignorance. Buyers of untitled cars and surprisingly cheap goods that “fell off the truck” know what they are getting into, even if they don’t know the exact provenance of their great bargains. This buyer also knew, or should have known, that what he was getting was too good to be true.
In other situations, however, it is less clear what constitutes “due care.” Andrea Johnson, director of forest programs for the Environmental Investigation Agency (which, notwithstanding its name, is a nonprofit environmental group and not a government agency), told NPR that neither third-party certifications nor government stamps are accepted as “proof of legality” by the U.S. government. In other words, a company can still be held responsible for not investigating further even when a third-party agency has certified the products.
Read the complete article here.
Source: Larry M. Elkin, CPA, CFP® | Palisades Hudson Financial Group LLC
(Video: Gibson Guitar • Story: Tennessean.com) Seizure of imported hardwood draws attention of lawmakers U.S. Justice Department officials have requested a meeting with Gibson Guitar owners next week, while in Congress lawmakers continue to ask why the factories and offices of the longtime manufacturer of prized guitars were raided on Aug. 24. Gibson CEO Henry [...]
(Video: Gibson Guitar • Story: Tennessean.com)
Seizure of imported hardwood draws attention of lawmakers
U.S. Justice Department officials have requested a meeting with Gibson Guitar owners next week, while in Congress lawmakers continue to ask why the factories and offices of the longtime manufacturer of prized guitars were raided on Aug. 24.
Gibson CEO Henry Juszkiewicz said he will meet with federal officials in Nashville on Wednesday to discuss the raids. Juszkiewicz said he is unsure where the conversation will lead.
In Congress, U.S. Fish & Wildlife officials have agreed to brief lawmakers on the House Energy and Commerce Committee in the next two weeks on the issue, U.S. Rep. Marsha Blackburn, R-Brentwood, said Wednesday.
The agency oversaw the Gibson raids, with agents confiscating computer hard drives, and pallets of wood and guitars suspected of being imported illegally in violation of the U.S. Lacey Act, which bans the importing of environmentally threatened plants and animals. Read more here.
Video: Henry Juszkiewicz, Chairman and CEO of Gibson Guitar Corp., has responded to the August 24 raid of Gibson facilities in Nashville and Memphis by the Federal Government. In a press release, Juszkiewicz said: “Gibson is innocent and will fight to protect its rights. Gibson has complied with foreign laws and believes it is innocent of ANY wrong doing. We will fight aggressively to prove our innocence.”
(The Economist) Confusing environmental rules harm more than guitarmakers Maybelle Carter strummed one with a smile. Slash, the lead guitarist of Guns N’ Roses, thrashed one with a snarl. One would be hard-pressed to find two carbon-based life forms more different than Carter and Slash… but they both loved Gibson guitars, as do [...]
(The Economist)
Confusing environmental rules harm more than guitarmakers
Maybelle Carter strummed one with a smile. Slash, the lead guitarist of Guns N’ Roses, thrashed one with a snarl. One would be hard-pressed to find two carbon-based life forms more different than Carter and Slash… but they both loved Gibson guitars, as do thousands of amateur bards. So it struck a jarring chord when federal agents raided Gibson’s factories in Nashville on August 24th.
Agents barged in and shut down production. They were hunting for ebony and rosewood which the Fish and Wildlife Service (FWS) alleges was imported from India in violation of the Lacey Act, a 1900 law originally designed to protect fauna from poachers. This law has metastasised: it now requires Americans, in essence, to abide by every plant and wildlife regulation set by any country on Earth. Not having heard of an obscure foreign rule is no defence. Violators face fines or even jail. FWS claims the ebony sent from India was mislabelled, and that Indian law forbids the export of unfinished ebony and rosewood. Gibson denies wrongdoing. Read more here.
(CME – Steve Coleman) Exporters sending goods across the U.S. border may have to do even more homework under changes to the Food, Conservation and Energy Act. A U.S. government decision to amend the Lacey Act, could mean exporters will have to spell out where everything that went into the finished product came from if [...]
(CME – Steve Coleman)
Exporters sending goods across the U.S. border may have to do even more homework under changes to the Food, Conservation and Energy Act.
A U.S. government decision to amend the Lacey Act, could mean exporters will have to spell out where everything that went into the finished product came from if they want their goods to cross the international border.
“It could lead to new, onerous requirements for documentation,” said Paul Clipsham, CME’s Director of Commercial and Consumer Policy. “It could be another non-tariff barrier to entry…We’d like businesses to look into (possible side effects) themselves.”
U.S. Congress passed changes to the act in 2008 aimed at preventing illegal logging practices around the globe to save rain forests and other environmentally-sensitive areas. Anything done that doesn’t conform to American law means the product won’t cross the border.
Provisions in the law mean the act could apply to other industry sectors.
