November 01, 2011

Curbing Illegal Trafficking in Timber and Other Plant Products

There is international consensus on few things, but the need to curb illegal logging is one of them. Illegal logging destroys forests, watersheds, and habitats and negatively impacts biodiversity, agriculture, fisheries, and global climate change. The scope of illegal logging worldwide is enormous. The World Bank estimated in 2006 that timber harvested illegally on public lands worldwide results in lost assets and revenue in excess of $10 billion dollars annually in developing countries. See Strengthening Forest Law Enforcement and Governance, Report No. 36638-GLB (2006). This illicit trade hurts both those in developing and developed countries. Money that could otherwise be used in developing countries to meet the basic needs of their people, better manage their forests and other natural resources, and reduce their international debt is diverted by such trade. The trade in lower-priced illegal timber and the products made from it also injures those in developed countries, such as American wood products companies that operate legally and, therefore, pay full price for imported timber.

Congress enacted supplemental legislation, effective May 22, 2008, that now allows prosecutors to act against trade in such illegal timber and other plants. The new law that amends the century-old Lacey Act, 16 U.S.C. §§ 3371–3378, represents one of the most significant pieces of environmental legislation enacted since the 1970s and is changing the way the international wood products industry conducts business.


The Lacey Act as amended

The Lacey Act has been the most powerful tool in the arsenal of the prosecutor of fish and wildlife crimes for over a century. However, prior to the 2008 amendments, the statute defined “plant” to exclude the majority of known species. Almost all tropical timber and the majority of other plants were not covered by the Lacey Act prohibitions. For those species that were covered, prohibitions were more limited than for fish and wildlife. For example, trafficking in plants that had been taken in violation of an underlying foreign law, rather than a state or federal law, was not prohibited as it was for fish and wildlife. That has now changed.

Congress amended the Lacey Act to provide three primary new components relevant to combating international trafficking in plants. First, the amendments changed the definition of the term “plant” to expand the application of the Lacey Act. “Plant” is now defined broadly to mean “[a]ny wild member of the plant kingdom, including roots, seeds, parts, or products thereof, and including trees from either natural or planted forest stands.” 16 U.S.C. § 3371(f) (2010). However, three categories of plants remain exempt from the provisions of the act: (1) common cultivars, except trees, and common food crops, (2) scientific specimens of plant genetic material that are to be used only for laboratory or field research, and (3) plants that are to remain planted or to be planted or replanted (e.g., live plants in the nursery trade). Id. (It is unclear why legislators felt that trade in trees or other plants cut in violation of foreign law should be prohibited while trade in trees or other plants uprooted in violation of foreign law and later replanted should be allowed.) However, plants in the last two categories—scientific specimens and “planted” plants—are not exempt if they are listed in an appendix to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (International Convention), if they are listed as an endangered or threatened species under the Endangered Species Act of 1973 (ESA), 16 U.S.C. §§ 1531–1544 (2011), or if they are similarly listed pursuant to a state law. Id.              

Second, the 2008 amendments expanded the scope of prohibitions related to plants. The Lacey Act now makes it unlawful to import, export, transport, sell, receive, acquire, or purchase in interstate or foreign commerce any plant taken, possessed, transported, or sold in violation of any federal, state, tribal, or foreign law that protects plants. Id. § 3372(a)(2). Thus, the act prohibits a person from bringing into the United States any plant or plant product taken in violation of a foreign law that protects plants or that regulates a variety of plant-related offenses. Id. § 3372(a). In addition, the Lacey Act includes enforcement provisions if a person makes or submits any false record of any plant or plant product that is imported into the United States. Id. § 3372(d).

Third, the amendments added a new import declaration requirement for plants and plant products. See id. § 3372(f). The amendments make it unlawful to import certain plants or plant products without an import declaration. The declaration must include, among other things, the scientific name of the plant materials, the country of harvest, the value of the importation, and the quantity of the plant materials. Enforcement of this declaration requirement is being phased in by tariff code to allow for a smoother implementation process. See 74 Fed. Reg. 45,415 (Sept. 2, 2009).

The plant declaration requirement is a keystone of the 2008 amendments. The law now holds importers responsible for knowing the type of wood or other plant product they are importing and where it was harvested. This means that the supply chain becomes more transparent, thus deterring trade in illegally sourced plants and plant products. Moreover, industries that never concerned themselves with tracking the provenance of their source materials are rethinking their practices and asking questions they never before considered. The requirement also provides basic information about plant materials coming into the United States, allowing the efficient allocation of enforcement resources. Agencies responsible for collecting the large volumes of import declarations have been required to create a mechanism for receiving those declarations from importers in a manner that does not hinder legal trade. The Animal and Plant Health Inspection Service's website provides information on the Lacey Act, relevant Federal Register notices, and guidance to industry on these new requirements.

The penalties for Lacey Act violations were largely unchanged by the 2008 amendments, except that penalties for violations of the new declaration requirement were specified. Violations of the Lacey Act may be addressed in three basic ways: (1) through forfeiture of the goods in question, (2) through the imposition of civil administrative monetary penalties, and/or (3) through the imposition of criminal penalties, ranging from misdemeanors to Class D felonies. See 16 U.S.C. §§ 3373, 3374 (2010).


Implementation and enforcement

A federal government interagency group began meeting in the summer of 2008 to cooperatively address issues relating to implementation of the Lacey Act Amendments. The interagency implementation group’s primary tasks have been: (1) to advise the Secretaries of Agriculture and the Interior on development of statutorily required definitions of common food crop and common cultivar, (2) to implement the import declaration requirement under the amendments, (3) to conduct the statutorily required review and assist the Secretary of Agriculture with preparation of the required report to Congress regarding the implementation of the plant declaration requirement, and (4) to work on initial enforcement efforts. The Department of Agriculture published a proposed regulation defining common food crop and common cultivar on August 4, 2010, but a final regulation has not yet been issued. 75 Fed. Reg. 46,859 (Aug. 4, 2010). The proposed regulation is drafted to effectively exclude from this exemption plants listed in an appendix to the International Convention, under the ESA, or in a similar state list. The rationale behind this exclusion is that any plant considered threatened or endangered cannot be common. The plant declaration requirement continues to be phased in, and work on the required report to Congress is ongoing.

To date, the Department of Justice has utilized only the forfeiture provisions of the Lacey Act. In United States v. Three Pallets of Tropical Hardwood, Inv. No. 2009403072 (June 22, 2010), the Department of the Interior denied a petition for remission filed by an importer seeking the return of a shipment of tropical hardwood imported from Peru for which a Lacey Act declaration was not filed upon importation and which was declared under an improper tariff code. The shipment, valued at just over $7,000, was declared under tariff code 4421 that covers finished wood products such as clothes hangers, blinds, toothpicks, and clothespins, even though the shipment actually contained raw, sawn wood that should have been declared under tariff code 4407. At the time, the declaration requirement was not being enforced for goods in tariff code 4421 but was being enforced for goods in 4407. Prior imports of similar goods by this importer had used the proper tariff code of 4407.

The denial of the petition for remission noted the history of use of correct tariff codes and the importer’s lack of diligence in handling the transaction, including his failure to request the required information on genus and species, his failure to contact the Peruvian government to determine if he was dealing with a legitimate company, and his failure to follow up on information that indicated that the shipment was questionable. This last failure includes the fact that the importer was asked to make payment directly to an individual rather than the exporting company because the company had gone out of business.

A second civil forfeiture action is being handled judicially and remains ongoing. The action involves ebony wood seized from the premises of Gibson Guitars in Nashville, Tennessee. According to the affidavit of a U.S. Fish and Wildlife Service Special Agent in support of that forfeiture, on September 28, 2009, Customs and Border Protection reported the import of a shipment of Madagascar ebony wood at the Port of Newark, New Jersey, with a total value of approximately $76,400. Nagel GMBH and Company KG (Nagel) of Hamburg, Germany, exported the ebony wood for its customer, Gibson Guitars of Nashville. Since at least April 2000, the Republic of Madagascar has had various laws that restrict the harvest and export of ebony wood, which is slow growing and increasingly rare. Gibson Guitars has filed a claim in this forfeiture proceeding and moved to dismiss the forfeiture complaint, but no decision has yet been rendered.          

The passage of the Lacey Act Amendments catapulted the United States into a global leadership role in the ongoing multilateral effort to combat illegal logging and associated trade. Since the enactment of the amendments, other nations are now considering laws to help stem this damaging international trade. It is anticipated that this change in the legal landscape will contribute to a significant reduction in the current global illegal trade in plants and its related social, economic, and environmental damages.

Trends, Vol. 43, No. 2, November/December 2011, Section of Environment, Energy, and Resources, American Bar Association.