2008 GAC Position Papers

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 corks, 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 9,000 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

Export Compliance:
Ensuring Safety, Increasing Efficiency
    The Export Controls Improvement Act, H.R. 6828, introduced by Representatives Brad Sherman (D-CA), Dan Manzullo (R-IL) and Adam Smith (D-WA), strikes the correct balance between improving the enforcement of our nation’s export control laws and facilitating the ability of the private sector to export their product overseas. H.R. 6828 also recognizes the differences between small, medium and large exporters, a factor very compelling to NCBFAA, an organization that prides itself on representing the interests of small business.
Background: NCBFAA represents more than 800 individual companies, from throughout the United States, who facilitate the movement of exports and imports. In the export realm, think of us as travel agents for cargo: we work with the exporter to arrange transportation of American goods to foreign markets. We also ensure that detailed information about the export is filed with the relevant federal agencies with jurisdiction over exports.
      The primary means for reporting export shipments to the government has been the Shipper’s Export Declaration, which is now available to filers in an automated mode, through the Automated Export System (AES). Through this electronic pipeline, data is then sent to the agencies with jurisdiction.
      In the near future, AES will be integrated into Customs’ soon-to-be-completed Automated Commercial Environment (ACE) and will connect to all the agencies of jurisdiction through the International Trade Data System (ITDS). This will mean an exporter can file export data electronically through a single window, with the data then routed simultaneously to all relevant agencies for approval and oversight. This will make AES an invaluable tool, providing the government with better information, more accurate enforcement and more efficient disposition of cargo. Yet, it becomes all the more critical that the information going into AES is accurate, reliable and timely.
      The Need for Legislation: That is why H.R. 6828 is so important. 
      It recognizes the Automated Export System as the single instrument for inputting Shipper’s Export Declaration data and delivering that information to the appropriate federal agency.
      It also uses the power of automation by requiring AES to alert the exporter, through his filer, about licensing requirements and to issue warnings – when appropriate – that the transaction cannot be completed if it involves restricted parties or countries subject to trade sanctions. This is a critical change, representing an important paradigm shift. Currently, when information is keyed into AES, the system will accept almost all information filed at face value. It is then up to the federal agencies to identify prohibited or restricted exports as they flow through our ports. As trade increases dramatically, the task of intercepting 100% of the goods that violate export control or trade sanctions becomes impossible. This will be an important compliance tool for a filer making an inadvertent or honest mistake. It means that the filer will have the necessary resources to process export applications with greater confidence that they meet the letter of the law.
      Provides assurance to the government that the filers of AES data have the requisite skills, knowledge and professionalism to merit this trust, by granting the Secretary authority to establish a registration program for AES filers.
      The National Customs Brokers and Forwarders Association of America, Inc. strongly supports H.R. 6828 and urges expeditious passage of this important legislation.


Maritime Reform Is Needed Again
Ten years after the passage of the Ocean Shipping Reform Act of 1998 (OSRA), non-vessel operating common carriers (NVOCCs) are still mired in the bureaucratic morass of meaningless regulation of the maritime industry. The 1998 Act was intended to reduce the inefficiencies and inequities of ocean transportation regulation, by restoring marketplace economics and competition to the business of moving goods by ocean-going vessel. Instead, the Federal Maritime Commission (FMC) preserved, through regulation, the costly practice of requiring NVOCCs to file rate tariffs with the agency. Now, a petition has been filed by the National Customs Brokers and Forwarders Association of America, Inc., (NCBFAA) with the FMC that seeks to exempt NVOCCs from the requirement of publishing rate tariffs. We ask you to register your views with the FMC before the comment deadline of September 26.
      The Basics NVOCCs purchase space aboard an ocean-going vessel and then sell a portion of that space to an exporter, many of whom are small and medium-sized companies that lack the leverage or expertise to deal effectively with the various steamship lines. Often, using an NVOCC is more cost effective than dealing directly with the carrier and creates an element of price competition for American businesses selling their goods abroad. After negotiating these rates with their exporter customer, NVOCCs must still publish this information in formal rate tariffs that fully outline the terms of that agreement. This is an immensely costly process that serves no purpose. It was once designed to provide notice of rates that were available to all shippers, but OSRA has eliminated the "one size fits all" theory of regulation. Now this tariff publication is almost never reviewed or used by customers, NVOCC rates are almost uniformly negotiated individually with individual customers and only later published in rate form, and the cost of tariff publication needlessly increases NVOCC costs, reducing their flexibility and competitiveness.
      The Petition NCBFAA’s petition includes the following principles in its request for tariff publication exemption:

  • The exemption would be voluntary rather than mandatory. (Shippers and NVOCCs who prefer to continue to use rate tariffs may continue to do so.)
  • Negotiated NVOCC rates would, in the future, be governed solely by application of contracts law.
  • NVOCC Service Arrangements (NSAs), which are formal agreements similar to the ocean service contracts used by steamship lines, would continue to be filed with the FMC.
  • The FMC would continue to have access to these negotiated agreements and the files of NVOCCs.
  • The exemption would not be construed so as to convey antitrust immunity on NVOCCs.
  • The exemption would only be available to NVOCCs who are licensed or registered.

      Our Request: We ask that our Member of Congress or Senator express support for our petition by September 26. A suggested letter is provided on the reverse side.


The Federal Maritime Commission
800 North Capitol Street, N.W.
Washington, D.C. 20573

Dear Sir:
      I have been contacted by constituents who are ocean transportation intermediaries. As non-vessel operating common carriers, they purchase space aboard ocean vessels and then sell that space to shippers, in a highly competitive marketplace. Their ability to compete and operate efficiently is undermined by regulations that require them to publish their negotiated rates in formal tariffs.
      I understand that this is out of step with a modern ocean transportation environment: shippers freely negotiate for the best rate available in the marketplace and today’s rate may have little relevance to tomorrow’s rate. To file information about an agreement after-the-fact only adds enormous expense and inefficiency. It also provides little value to the shipping public, as customers seldom review the tariff.
      The National Customs Brokers and Forwarders Association of America, Inc., (NCBFAA) has filed a petition to exempt ocean transportation intermediaries from this onerous requirement, an exemption that has already been provided to ocean carriers.
      I would appreciate your taking note of my support for the NCBFAA petition by incorporating this letter in the record.

Member of Congress