The Lacey Act Amendments and United States' policing of international trade.

• Author: Eberhardt, Stephanie

1. INTRODUCTION II. THE LACEY ACT AMENDMENTS A. The History of the Lacey Act B. The 2008 Amendments C. "Prohibited Acts" Under the 2008 Amendments D. The Labeling Requirement and the Import Declaration E. Penalties and Sanctions III. ILLEGAL LOGGING--A GLOBAL PROBLEM A. What is Illegal Logging and Why Was the Lacey Act Amended? B. Environmental Protection Impacts: Deforestation and Conservation C. The Role of Organized Crime and Government Corruption D. The Impact of Illegal Logging on U.S. Industry E. Past International Efforts to Combat Illegal Logging IV. ANALYSIS A. The Need for a De Minimis Exception B. The Future of Compliance C. An International Agreement to Address Illegal Logging V. CONCLUSION I. INTRODUCTION

   The issue of the illegal logging trade has stayed quietly out of the public eye for the past several years. (1) Forests have become crowded out of public consciousness by bigger, more immediate global issues, such as the economy, terrorism, and global-warming. (2) When a little known United States law called the Lacey Act was amended in 2008 to address illegal logging, few outside the logging industry took note. (3) That changed in August 2011, when the famous Gibson Guitar company was raided for the second time by federal agents for "fraudulently labeled" ebony that was illegally exported from India. (4)

   When the United States amended the Lacey Act, it became the first country to adopt a law making it illegal to import plants or plant products that are acquired in violation of another country's laws. (5) The amended law aims to control the demand side of the illegal timber trade, and as the United States is one of the largest consumers of wood and wood products in the world, (6) it follows that it fuels demand for illegal timber. In 2006, the estimated value of U.S. consumption of potentially illegally-sourced timber was $3.8 billion. (7) By closing off the largest market for timber, the Lacey Act Amendments are expected to have a substantial effect on the illegal logging trade. (8)

   For domestic and foreign industries, the raid on Gibson Guitar brings into focus the potentially over-burdensome compliance costs that the Lacey Act Amendments carry with them. (9) As other countries consider adopting similar laws to the Lacey Act, questions concerning the overall global effectiveness of laws like the Lacey Act are raised. First, these laws only target the demand-side of the illegal logging equation, without touching the supply-side factors that make illegal logging profitable. (10) Second, a patchwork of such laws in all major import countries would create huge compliance burdens for the companies making legal imports. (11)

   In Part II, this Comment describes the Lacey Act and how the 2008 Amendments modified the pre-existing statute. Part III discusses the illegal logging trade and the reasons behind amending the Lacey Act, including the environmental impacts and organized crime, as well as the impacts of illegal logging on the United States' domestic industry and prior international efforts to stop illegal logging. Part IV analyzes some of the implementation issues within the Lacey Act Amendments, specifically the lack of a de minimis exception provision in the statute, as well as the inadequacies inherent in the model of Lacey Act as a solution for ultimately stamping out illegal logging. Part IV also examines steps that the international community should take as a part of a multilateral agreement that fully addresses the problem of illegal logging.

2. THE LACEY ACT AMENDMENTS

   1. The History of the Lacey Act

      The Lacey Act of 1900 represents one of the United States' earliest attempts at wildlife protection and targeted trafficking in '"illegal' wildlife, fish, and plants." (12) The word "plant" in earlier versions of the statute only encompassed endangered plants and non-timber plant species. (13) Industry and environmental groups lobbied for the 2008 Amendments. The American wood-products industry argued that illegal timber "resulted in unfairly low prices for imported wood" which consequently hurt U.S. jobs. (14) Prior to the passage of the 2008 Lacey Act Amendments, no U.S. law to prevent the importation or sale of illegal wood in the United States. (15) Numerous calls for laws prohibiting the sale of illegally sourced timber have been made, (16) and the United States statute is one of the first of its kind internationally. (17)

      As a part of the 2008 Amendments, Congress expanded the Laeey Act's definition of "plant." (18) The 2008 Amendments also made it illegal for a person or organization to "import, export ... or purchase in interstate or foreign commerce any plant ... taken in violation of any Federal, State, tribal, or foreign law that protects plants" and "to make or submit any false record, account, or label for, or any false identification of, any plant covered by the Act." (19) Importers now must also file an import declaration form for certain plants and plant products, and the form must accompany all shipments into the United States. (20)

   2. The 2008 Amendments

      The biggest change in the Lacey Act is the new definition of the word "plant." (21) Under the prior version of the statute, a "plant" was (a) "any wild member of the plant kingdom, including roots, seeds, and other parts thereof (but excluding common food crops and cultivars) which is indigenous to any State[,]" and (b) endangered according to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) (22) or state law. (23) Now, a plant is defined as "any wild member of the plant kingdom, including roots, seeds, parts, and products thereof, and including trees from either natural or planted forest stands." (24) Three categories of plants are exempt --common cultivators other than trees and common food crops, scientific specimens used only for research or laboratory work, and plants that are or are going to be planted or replanted. (25)

   3. "Prohibited Acts" Under the 2008 Amendments

      This Comment focuses on the sections of the Lacey Act involving foreign law violations. (26) Under section 3372(a)(2)(B), the Lacey Act now makes a person criminally liable if they: "import, export, transport, sell, receive, acquire, or purchase in interstate or foreign commerce--any plant

      (i) taken, possessed, transported, or sold in violation of ... any foreign law ... that protects plants or that regulates--(I)the

      (I) theft of plants;

      (II) the taking of plants from a park, forest reserve, or other officially protected area;

      (III) the taking of plants from an officially designated area; or

      (IV) the taking of plants without, or contrary to, required authorization;

      (ii) taken, possessed, transported, or sold without the payment of appropriate royalties, taxes, or stumpage fees required for the plant by any law or regulation ... any foreign law; or

      (iii) taken, possessed, transported, or sold in violation of any limitation ... under any foreign law, governing the export or transshipment of plants." (27)

      The unusual feature of the 2008 Amendments is that a violation of U.S. law occurs through a violation of foreign law. (28) Essentially, the mechanism for violating this section of the Lacey Act is solely based on foreign law. This means, for instance, that a U.S. company that imports a shipment of wood that was illegally cut down, say, from a nature preserve in Indonesia, but otherwise has complied with all import regulations that pertain to U.S. law, is now criminally and civilly liable in the United States.

   4. The Labeling Requirement and the Import Declaration

      Another addition to the Lacey Act is the import declaration requirement for plant products. (29) Section 3372(f) requires that each plant shipment be accompanied by a declaration form in order to be imported into the United States. (30) The declaration must contain the scientific name of the plant (including the genus and species), the value of the importation, the quantity of the plant, and the name of the country from which the plant was taken. (31) The Secretary of Agriculture and the Secretary of the Interior are responsible for delineating the regulations to carry out this section of the act. (32)

   5. Penalties and Sanctions

      There are three basic types of penalties under the Lacey Act --civil, criminal, and forfeiture. (33) Civil penalties may be assessed for a sum up to $10,000 "against a party who in the exercise of due care should have known of the illegal nature of the plant ... or who knowingly commits a false labeling offense or knowingly violates the declaration requirements." (34) An unknowing violation of the import declaration has a penalty of up to $250. (35)

      Criminal penalties range from misdemeanor charges to felony charges. (36) The degree of a criminal penalty under the Lacey Act hinges on a defendant's knowledge and the illegality of the defendant's conduct. (37) A felony under the Lacey Act occurs when the defendant, knowing the timber involved is illegally acquired, then "knowingly imports or exports" in violation of the Lacey Act or "knowingly engag[es]" in conduct that involves (a) the sale or purchase of, (b) the offer of sale or purchase of, or (c) the intent to sell or purchase plants with a market value in excess of $350. (38) A felony carries a fine of up to $250,000 for individuals and $500,000 for organizations or twice the gross gain or loss, and up to five years in prison, or both per violation. (39)

      A misdemeanor under the Lacey Act occurs when a person "knowingly engages in conduct prohibited by" the Lacey Act and should have known in the exercise of due care that the plant was illegal. (40) A misdemeanor carries a fine of up to $100,000 for individuals and $200,000 for organizations, or up to one year in prison, or both for each violation. (41)

      Finally, all illegally obtained timber is subject to strict-liability forfeiture to the United States Government "notwithstanding any culpability requirements for civil...