Lacey Act Compliance and Beyond

Transcription

1 Lacey Act Compliance and Beyond 8 June 2010 Tanahmas Hotel, Sibu Paper Jointly Prepared by: Nicholas Andrew Lissem Abu Kassim Jibri Sarawak Timber Industry Development Corporation Wisma Sumber Alam, Jalan Stadium, Petra Jaya, Kuching

2 PRESENTATION AGENDA Lacey Act Background Must Do Requirements How investigations are initiated? What to do when government agency contacts you? The Flipside Conclusion

3 PRESENTATION AGENDA Lacey Act Background Must Do Requirements What happens during an investigation? What to do when government agency contacts you? The Flipside Conclusion

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5 Lacey Act - Background Oldest wildlife protection statute in the United States First enacted in 1900 to combats trafficking in illegal wildlife, fish and plants Amended in 2008 under the Food, Conservation and Energy Act of 2008 As of 22 nd May 2008, the Lacey Act makes it unlawful to import, export, transport, sell, receive, acquire, or purchase in interstate or foreign commerce any plant, with some limited exceptions, taken, possessed, transported or sold in violation of the laws of the United States, a State, an Indian tribe, or any foreign law that protects the plant [Source : Docket No. APHIS ]

6 Lacey Act - Background The Lacey Act also makes it unlawful : to make or submit any false record, account or label for, or any false identification of, any plant covered by the Act [Source : Docket No. APHIS ] w.e.f 15 December 2008, to import certain plants and plants products without an import declaration [Source : Docket No. APHIS ] w.e.f 15 December 2008, importers are required to submit a declaration for certain plants and plant products [Source : Docket No. APHIS ]

7 Lacey Act - Background The Lacey Act also requires : the declaration must contain, among other things, the scientific name of the plant, value of the importation, quantity of the plant, and name of the country from which the plant was harvested if the plant species from which they are made varies and are unknown, importers will be required to declare the name of each species that may have been used to produce the product [Source : Docket No. APHIS ]

8 Lacey Act - Background The Lacey Act also requires : if a plant product is made of plant species commonly harvested in more than one country and the country is unknown, the importer will be required to declare the name of each country from which the plant may have been harvested For paper and paperboard products with recycled plant content, the importer will not be required to specify the species or country or harvest with respect to the recycled plant product component, but will be required to provide the average percent recycled content [Source : Docket No. APHIS ]

9 Lacey Act - Background Products affected : 1. HTS Ch. 44 Wood and articles of wood; 2. HTS Ch.47 Wood pulp 3. HTS Ch. 48 Paper and articles of 4. HTS Ch. 94 Furniture, etc [Source : Docket No. APHIS ] Note : HTS Harmonized Tariff Schedule

10 Lacey Act - Background Violations of the Lacey Act provisions may be prosecuted in three basic ways : 1. Civil monetary penalties; or 2. Criminal fines and penalties and potential incarceration; or 3. Forfeiture dispossession of the plant, fish, or wildlife in question [Source : Docket No. APHIS ]

11 Phase-In Schedule of Enforcement of the Declaration Requirement Phase I- Up to March 2008 Phase II-1 Apr 30 Sept 2009 Phase III -1 Oct Mac 2010 Phase IV- 1 Apri-30 Sept 2010 HTS Chapters : HTS Chapters: HTS Chapters: Plant input declaration form will be available and accepted after 15 Dec 2008 Ch 44 Headings (Wood & articles of wood) Ch 44 -Headings (wood & articles of wood) Ch 44 Headings(wood & articles of wood) 4401 Fuel wood 4402-Wood charcoal 4420-Artciles of wood,nesoi Domestic and international outreach 4403-Wood in the rough 4405-Wood wool Ch 48-Headings(paper & articles of) 4404-Hoopwood poles, piles, stakes 4410-Particle board 4801-Newsprint 4406-Railway or tramway sleepers 4411-Fibreboard of wood 4802 Uncoated writing paper 4407-Wood sawn or chipped lengthwise 4412-Plywood, veneered panels 4803-Toilet or facial tissue stock 4408-Sheets for veneering 4413-Densified wood 4804-Uncoated kraft paper 4409-Wood continuously shaped 4414-Wooden frames 4805-Other uncoated paper and board 4417-Tools, tool handles, broom handles 4415-Packaging cases, crates, boxes, drums 4806-Vegetable parchment, etc 4418-Builders, joinery and carpentry of wood 4416-Casks, barrels, vats, tabs 4807-Composite paper and board 4419-Tablewares and kitchenware of wood 4420-Wood, marquetry, caskets, statuettes Ch 47-Headings (wood pulp) 4701-Chemical wood pulp 4702-Chemical wood pulp, dissolving 4703-Chemical wood pulp, sulfate 4704-Chemicaal wood pulp, sulfite 4705-Combination mechanical and chemical 4808-Corrugated paper 4809-Carbon paper 4810-Coated paper and board 4811-paper coated, other than 4803,4809 & 4810 Ch 94-Headings(furniture, etc) Seats with wood frames Wooden office furniture Wooden kitchen furniture Wooden bedroom furniture Other wooden furniture wooden furniture parts Plus Phase II Plus Phases II & III

12 PRESENTATION AGENDA Lacey Act Background Must Do Requirements What happens during an investigation? What to do when government agency contacts you? The Flipside Conclusion

13 Lacey Act Must Do Requirements What option??? Comply - Fill Plant and Plant Product Declaration Form accurately all the time Comply - Provide correct scientific name of the plant, value of the importation, quantity of the plant, and name of the country from which the plant was harvested

14 Lacey Act Must Do Requirements What option??? Comply - Don t trade in illegal or tainted plants and plant based products such as harvesting it illegally, trading it without proper duties or other fees being paid, or smuggling/stealing it Comply - Don t lie to the government!

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25 PRESENTATION AGENDA Lacey Act Background Must Do Requirements How investigations are initiated? What to do when government agency contacts you? The Flipside Conclusion

26 How investigations are initiated? Tips NGO-supplied information Declarations Direct inquiries i.e., request for information or documents from USFWS agent Information gathered as part of other inquiry, such as audit, e.g., importer compliance assessment on country of origin, Request for information (CF 28) Foreign Government

27 How investigations are initiated? DALIAN HUAFENG BABY CRIBS - A CASE STUDY Investigation Techniques Used by Environmental Investigation Agency (EIA) to Establish Linkages ILLEGAL LOGGERS FOREIGN MANUFACTURES US IMPORTER/RETAILS

28 How investigations are initiated? DALIAN HUAFENG BABY CRIBS - A CASE STUDY LOGGING EIA identified suspect logging company in Sulfenhe (Longjiang Shanghlian & Russia Chunguevskaya LPK) Conduct ducted hidden camera interview using fake names and identities Company official stated they had to pay protection money to buy lumber in Russia (mostly poplar and birch)

29 How investigations are initiated? DALIAN HUAFENG BABY CRIBS - A CASE STUDY MANUFACTURER At the same time, EIA examines 900 wood products at Wal-Mart, including furniture EIA worked backwards from information on Wal- Mart packaging, using ship manifest data available through PIERS. EIA identified manufacturer of wood furniture, Dalian Huafeng EIA then visited Huafeng

30 How investigations are initiated? DALIAN HUAFENG BABY CRIBS - A CASE STUDY CONVICTION: LACEY ACT & ANTIDUMPING CASE 12 individual and companies in the US and Vietnam convicted of Lacey Act violation (false labeling) in scheme to avoid high antidumping duties on catfish from Vietnam This criminal conspiracy was designed to avoid federal tariffs and flood our markets with illegally imported fish. Maintaining a level playing field for those who obey the law is essential (Ronald J. Tenpas, Assistant Attorney General for the Justice Department s Environment and Natural Resources Division)

31 How investigation are initiated? DALIAN HUAFENG BABY CRIBS - A CASE STUDY LESSONS FROM GIBSON RAID Keep a close eye not just on your suppliers but on the overall political environment in which they operate Monitor respected NGOs for assistance in identifying early warning signs of environmental issues Stay alert to the politics surrounding Lacey Connection with third-party certifier or collaboration with NGO does not relieve a company of remaining vigilant and exercising due care

32 ALERT!!! Possible sign you re being investigated Contact by unknown suppliers Potential cover buyers [Axion Trading] Contacted NGOs [ EIA, Media Bliz, etc ] Visit of US Government officials/agent like CUSTOM, ALPHIS, etc

33 PRESENTATION AGENDA Lacey Act Background Must Do Requirements What happens during an investigation? What to do when government agency contacts you? The Flipside Conclusion

34 What to do when government agency contacts you? On-Site-Contacts: Manage all activities related to government on-site contact with company personnel Instruct all employees and officials that they must: i. Immediately report any on-site contact with any government agent directly to their management; ii. Follow company procedures in responding to such contacts

35 What to do when government agency contacts you? On-Site-Contacts: Assign responsible official for: i. No matter how informal, the responsible company officer should act for the company, both when interfacing with the company personnel and with the government agents; ii. The official should be or should be closely advised by company legal counsels

36 What to do when government agency contacts you? Searches when government agents appear at company: Request for a copy of the warrant and identity of supervising agent Agents should not be obstructed or interrupted Because a warrant only covers places and things, it does not require anyone from the company to enage in an interview Agents may request gaining access to electronic data via company computers, assistance should be given with counsel advice

37 What to do when government agency contacts you? Searches when government agents appear at company: Search and seizure should be closely observed by company representatives Company official should request for a detail inventory of any seized items

38 What to do when government agency contacts you? Off-Site-Contacts: Government agents may call on employees and officials off-site to avoid Company knowledge and involvement While the company cannot require employees of officials to take any action in response to such off-site contacts, it can advise the individuals of their rights and of the company s request to be notified of any government contacts related to company matters Personnel requests for legal advice of counsel fees should be considered

39 PRESENTATION AGENDA Lacey Act Background Must Do Requirements What happens during an investigation? What to do when government agency contacts you? The Flipside Conclusion

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41 STIDC raise similar issue pertaining to tropical timber during the IWPA Convention with the hope that it would be considered in future Lacey Act revision

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44 EXPORT VOLUME (m3)of TIMBER PRODUCTS TO USA PRODUCT PLYWOOD 214, , ,531 64,783 52,635 MOULDING 1,670 1,821 1,532 1, DOWELS 1,980 2,245 1, FIBERBOARD 4, LAMINATED 10,580 13,399 13,227 6,870 4,413 BOARD/FLOORING FINGER JOINT BLOCKBOARD 900 1, ,532 - PARQUET PANELS/ 1, FLOORING SAWNTIMBER OTHER TIMBER ,205 PRODUCTS TOTAL 235, , ,332 75,245 62,363

45 EXPORT VALUE (RM 000) OF TIMBER PRODUCTS TO USA PRODUCT PLYWOOD 290, , , ,297 95,839 MOULDING 3,609 4,152 4,431 2,917 2,978 DOWELS 5, ,452 2,899 2,811 FIBERBOARD 4,374 LAMINATED 34,276 53,533 38,480 21,362 13,119 BOARD/FLOORING FINGER JOINT BLOCKBOARD 832 2, ,173 - PARQUET PANELS/ 3, FLOORING SAWNTIMBER OTHER TIMBER ,303 PRODUCTS TOTAL 343, , , , ,423

46 PRESENTATION AGENDA Lacey Act Background Must Do Requirements What happens during an investigation? What to do when government agency contacts you? The Flipside Conclusion

47 Conclusion Lacey Act makes it unlawful to import, export, transport, sell, receive, acquire, or purchase in interstate or foreign commerce any plant, with some limitation exceptions, taken or trade in violation of laws of United States and foreign laws Only one option to comply with Lacey Act requirements Correct declarations don t lie and self-regulated Adequate mechanism implemented in Sarawak to assist the industry to comply with Lacey Act

48 Conclusion Always be on alert for tipsters Continuous monitoring and updating on Lacey Act development US market makes-up about 2 per cent of total export value; small but equally important