Lacey Act Amendments Characterized as Both Crucial and Burdensome at House Hearing

“We think we have implemented and follow a due care process that will assure us of receiving only raw materials which comply with the Lacey Act’s requirements,” said Steve McCreary, general manager of Texas-based Collings Guitars, who was also testifying on behalf of the National Association of Music Manufacturers. Yet because of Lacey’s broad reach over a still undefined variety of foreign laws, “it could still be possible for our company to come into possession of material with questionable provenance,” McCreary said.

About 40 percent of the wood Collings uses comes from outside the U.S., and customs brokers assist with every transaction; a cost that is passed on to customers, McCreary said. The new declaration requirement also costs the Animal Plant and Health Inspection Service, which processes tens of thousands of declarations a month, he said. He advocated for an on-demand declaration system, where importers of covered products should be required to maintain records, and the documents would be available on request, but not required to be filed with every shipment.

An on-demand import requirement would also be consistent with other U.S. agencies -- such as CBP’s paperless system -- said Erik Autor, a former retail industry representative who was involved in the 2008 debate over the amendments. He is now president of communications firm Total Spectrum.

The amendment’s transnational declaration requirements are also burdensome to U.S. trading partners, said Birgit Matthiesen, special advisor to the CEO at Canadian Manufacturers and Exports. “In a time when governments on both sides of our border are reducing their operational budgets, it is important that agencies be able to target high-risk shipments and to act quickly,” Matthiesen said. “If those same agencies are buried in paper import declarations -- mostly from Canada -- they have fewer resources to go after the much higher or unknown risk elements.” Instead of the transnational approach, the U.S. should have a “Blanket Plant” declarations, similar to existing regulations covering imported chemical substances, she said.

Witnesses also echoed McCreary’s confusion about the scope of international laws Lacey covers. “When a speeding ticket for a truck transporting logs, an overweight vehicle, or a customs issue between two governments are all considered Lacey Act violations … from my perspective as a certifier, that is unreasonable and unachievable,” said Travis Snapp, managing director of Benchmark International, a wood products certification company. “It causes uncertainty for American businesses that attempt to operate legally and in compliance with the Lacey Act’s intent.”

Snapp said his company created a Lacey Compliance Verification Program, a third-party certification importers could use to ensure they met the Lacey standard of “due care.” Benchmark had 33 companies interested in the program, yet had to turn away 29. This was due to the complexity of the supply chain -- which for many companies spans foreign and domestic operations -- and the vast scope of foreign laws Lacey covers, Snapp said. Congress should narrow the scope of Lacey, or compile a list of foreign laws applicable under the Act, or both, he said.

Snapp also advocated for a deletion of the “contraband” designation the 2008 amendments placed on confiscated wood. Such a designation places illegally logged wood in the same category as cocaine, and prevents companies -- oftentimes just trying to do their due diligence -- from regaining the product. “Ethical companies that have demonstrated their attempt to comply as best they can with the Lacey Act should be accorded a day in court to contest the seizure, demonstrate the due care they took, and have an avenue of recompense,” said Snapp, who was also testifying on behalf of the International Wood Products Association. “Designating wood as contraband effectively severs this route, and does not allow the right to a fair trial.”

Yet such an act goes against U.S. property rights, said Marcus Asner, partner at Arnold and Porter, in written testimony. Allowing an innocent owner defense means that people in possession of stolen wood would have a right to keep it, despite the illegality of its procurement, he said. Asner compared it to a thief stealing his autographed baseball, then selling it to a collector. Their innocence “does not change the fact that it is still my baseball and I have a right to get it back.”

Intervening illegal activity does not diminish property rights, and importers should be responsible for knowing their suppliers and products are legal, he said. Asner also argued against allowing for a pre-2008 exception to the Lacey amendments (as proposed in the House last year, see 12060817); an exception other witnesses argued for. Asner said the exception would “have the unintended effect of excusing illegal activity” because of the difficulties of dating wood.

Jameson French, president of Northland Forest Products said the Lacey Act has actually benefited the U.S. hardwood industry. The growing global emphasis on combating illicit wood reduces supplies from countries where there is a significant risk of illegal logging, which is “providing a real opportunity for legal operators in the United States,” he said in written testimony. Hardwood lumber exports were at their highest level ever last year, and the overall trade has increased steadily since the Lacey Act amendments took effect, he said. Like Asner, French urged Congress not to lessen any aspect of Lacey, and to fully fund the implementing agencies so they can complete the Act’s requirements.

“It is important to note that delivering on Lacey Act objectives is not a process without growing pains as the private sector and the government learns from each other about implementation realities,” he said.