June 7, 2013

The Lacey Act's Legal Regime for Plants and Plant Products: "Dripping with Due Process" or Raining on the Industry's Parade?

Consumer Advertising Law Blog

The Subcommittee on Fisheries, Wildlife, Oceans and Insular Affairs (of the House Committee on Natural Resources) held an oversight hearing on May 16, 2013 regarding the 2008 amendments to the Lacey Act. As we noted in our lead-up post, the Lacey Act prohibits, among other things, trade in plants and plant products that have been taken, transported, or sold in violation of law, including the law of other countries. The Lacey Act also requires importers to file with the government certain forms—"declarations"—containing specific information about the imported products, including the country of harvest and the plant's scientific name. The Lacey Act's requirements help ensure that the plants and plant products on the market are legal and that there is a level playing field for legitimate American businesses.

The May 16 hearing was led by Subcommittee Chairman John Fleming (R-La.), who honed in on the burdens that corporations face in complying with the Lacey Act and whether changes to the Act might be necessary to alleviate those burdens. A lot of the talk focused on: (1) whether the upfront declaration requirement was necessary; (2) the feasibility of complying with foreign laws when operating in foreign countries absent an official U.S. database of foreign laws; and (3) whether parties whose products have been seized as illegal under the Lacey Act have recourse to seek the return of products they believe were mistakenly seized.

The hearing kicked off with testimony by two government officials: Rebecca Bech from the USDA Animal and Plant Health Inspection Service (APHIS) and Stephen D. Guertin from the US Fish and Wildlife Service (FWS). They explained the progress that the government is making in implementing the 2008 amendments to the Lacey Act and how the declarations are useful. Both witnesses claimed that the Act was working and did not require any further legislative changes. Bech said that APHIS is phasing in the declaration requirements and is creating a web-based system to streamline the declaration filing process. APHIS has forwarded approximately 3,000 declarations to FWS, Customs and Border Control, and the U.S. Department of Justice for further review. Guertin reported that FWS has worked on six investigations—three of which are ongoing—that were at least partially informed by information obtained from the declarations. APHIS promised it would publish its long-delayed report regarding the declaration requirements by the end of the following week. (This report has since been published and provides further information about the progress made and challenges faced by APHIS and the industry in implementing and enforcing the declaration requirement.) Both witnesses also requested additional funding for their respective agencies to aid their implementation and enforcement efforts.

Six witnesses from the private sector stepped up next. The majority called four of the witnesses: Steve McCreary from Collings Guitars, Inc.; Travis R. Snapp from International Wood Products Association; Birgit Matthiesen from Canadian Manufacturers & Exporters; and Erik O. Autor from Autor Global Strategies LLC/Total Spectrum LLC. These witnesses complained about the costs of compliance, which they feel is harming American jobs and small businesses. They also argued that the cost of completing and filing declaration forms is monumental, that compliance with foreign laws is prohibitively expensive when those laws are not explicitly identified by the government, and that "innocent owners" should be allowed to retain illegal plant products. All of the witnesses agreed that the goals of the Lacey Act are important, and McCreary acknowledged that his company is "in a better corporate position because of the 2008 amendments" as the law led the company to review its supply chain and to work with only those suppliers who were committed to "legal and responsible procurement."

The minority called the two remaining witnesses: James S. French from Northland Forest Products and our own Marcus Asner. These witnesses largely supported the Lacey Act as it currently stands, noting the progress that has been made since the 2008 Amendments in reducing the impact of illegal logging, the harm illegal trade causes to American businesses and the environment, and the benefits to honest American companies when competitors can no longer import illegal wood. Asner addressed claims that companies have no options to contest the seizure of plant products, noting that the Lacey Act and the related seizure and forfeiture procedures are "dripping with due process." (For further information regarding these procedures, see here.) Asner also emphasized that the Lacey Act and the related forfeiture procedures help protect the rights of the victims of illegal logging, including the landowner or the country from which wood was illegally harvested.

Congressman Fleming announced at the end that he wants to hold another hearing on the 2008 Amendments in coming months. Watch for further updates here. For links to the written testimony of all the witnesses—as well as a video of the hearing—go here. For summaries of the statements of Congressman Fleming and the majority's witnesses, take a look at the Subcommittee's Press Release.

© Arnold & Porter Kaye Scholer LLP 2013 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.

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