Background Information: The Lacey Act Amendments in the Farm Bill

      Included in the recently enacted Farm Bill is a provision to expand the scope of the Lacey Act, a law that prohibits trade in wildlife, fish and plants that have been illegally taken, possessed, transported or sold. The Lacey Act Amendments are primarily aimed at preventing illegal logging and illegal harvesting of protected plants and trees. The Farm Bill amendment expands the scope of products covered under the Lacey Act by 1) including trees in the definition of a plant and 2) adding products that are made from plants or trees.
      The Lacey Act Amendments also expand the range of offenses to include any plant or tree that is taken, possessed, transported or sold in violation of any foreign law that protects or regulates plants.
      Another feature of the Lacey Act Amendments is a new import declaration requirement for plants/trees and "products thereof" beginning December 15, 2008. The declaration must contain precise sourcing information, including the scientific name of any and all plant/wood (including the genus and species) contained in the product and the name of the country from which the plant/wood was taken, as well as the quantity and value of the plant/wood inputs. among other things.
      As the agencies and the private sector began looking at how to implement the Lacey Act Amendments, significant issues emerged that require attention. Several House and Senate committees and offices recently formed a working group with interested parties to find workable solutions. Following are highlights of the areas of concern:
      How does "product thereof" apply? The definition of "wood or plant product" is a core issue. The new law requires an import declaration stating the scientific name and source of the timber or plant that is used in the imported product. This may be a reasonable and necessary requirement for primary or secondary wood products, such as logs, mahogany flooring, plywood, beams, trusses, decking -- materials where the importer is only one or two steps removed from the original supplier of the timber. It may even be a reasonable, though difficult requirement for manufactured products that are predominately made from wood, such as furniture, cabinets, wood toys, musical instruments and crates.
      The real difficulties arise with highly processed products that incorporate wood or plants or their byproducts as just one among many other non-wood/plant inputs. The sheer magnitude of this list is extraordinary and includes such products as a rayon dress, Country Time lemonade (pineapple pulp, wood rosin), bicycles (rubber tire, recycled rubber pedal, rubber handles), pet shampoo (pine tar), wine with a cork, books, chewing gum, maple syrup, lipstick (wood rosin), machinery with a rubber gasket. In these examples, the importer is at least five or six steps removed from the source of the plant or timber. It becomes much more remote that for the U.S. importer will be able to provide meaningful information on the import declaration as to the specific identity and source of the tree or plant originally harvested at the earliest stage of multi-country manufacturing, or the value and quantity of the plant/wood input.
      Information Provided On the Import Declaration: The Lacey Act Amendments provide that, for a period of two years, in situations in which the original tree or plant source is not known, the name of each species of plant/wood that might have been used to produce the product or the name of each country from which the plant/wood might have been taken.  Yet, of what possible use is this expanded list of speculative possibilities to government enforcement agencies?
      Violations of Foreign Law: The sweeping scope of the product coverage takes on added meaning when you consider that the Lacey Act offenses include not just violations of U.S. laws or treaties, but violation of any foreign law that protects or regulates plants or trees. There are almost 900 such laws in Indonesia alone. Moreover, a list of all the relevant foreign laws with which an importer is responsible for compliance does not exist. The penalties for violations of the Lacey Act offenses range from civil administrative penalties to forfeiture of the goods to criminal fines and imprisonment. In effect, the Lacey Act Amendments criminalize U.S. citizens involved in importing a wide range of products far removed from the logging process as a substitute for stronger enforcement by foreign governments in timber rich countries.
      Automation: CBP and the private sector have worked collaboratively for over a decade to develop what is now a highly streamlined, paperless import processing system. It is essential that the Lacey Act import declaration is capable of being filed electronically to avoid injecting millions of pieces of paper into an otherwise paperless process. Regulators estimate that up to 30,000 shipments per day could be subject to the new declaration requirement.
      It is very likely that enforcement will not begin until April 1, 2009, and then only on a phased-in basis. This is primarily because CBP reports that it will not be able to collect the declaration electronically by the December 15 implementation date. It is however working with the U.S. Fish and Wildlife Service to revive their legacy system for possible use beginning April 1, 2009. We must ensure that the system is capable of collecting the data electronically, that it can handle the potentially large volume of import declarations and that it will interface effectively with the CBP import process. At the same time, lawmakers and regulators should recognize that even with electronic collection of the data, the agencies involved still will not have an automated solution for reviewing or analyzing the data, greatly diminishing the enforcement value of this exercise.

September 2008