Lacey Act: Part II

In our previous post, I introduced you to the Lacey Act, the history of the Act and what importers and Customs brokers are presently doing to be in compliance with the law.

The Act was implemented in phases, each covering different parts of the HTS.

The responsibility of the importer of record (as defined by CBP) is to file the declaration, either electronically as part of the Customs entry transaction, or separately to PPQ in Baltimore, Maryland, using a PPQ 505 form.  Either the importer or their broker may file but ultimately the responsibility is borne by the importer.

However, it has proven complex and the question of what “is” and “isn’t” included in the Act has been left open to interpretation by importers, USDA and their Customs brokers.  And getting a definitive answer has been a challenge and one that unfortunately leaves the importer exposed to penalties.

The penalties are both civil and criminal in nature.

  • The goods are forfeited to the government.
  • A misdemeanor conviction is punishable by up to a year in prison and a fine of $100,000 for an individual or $200,000 for corporations.
  • A felony conviction is punishable by up to five years in prison and a $250,000 fine for an individual or $500,000 for corporations.

The burden of proof to demonstrate the violation rests on the US government who has to prove this in a jury trial.  At trial, evidence is based on facts, not the documents.  Because it is fact-based, the government will seek and employ evidence they collect from a range of sources, including, but not limited to, foreign governments, NGO’s, private citizens, anonymous tips, data analysis, border agents and industry members such as whistleblowers and competitors.

One of the most famous cases that the government has prosecuted a company for under the Lacey Act is Gibson Guitars.  Gibson settled for $300,000 and agreed to deferred prosecution with the federal government for illegally importing wood from Madagascar and India.  Their CEO was a little upset at his press conference a day after their Tennessee manufacturing facility was raided by agents from Fish & Wildlife and Immigration & Customs Enforcement.

In the end, the Lacey Act is something that importers of plant and plant products should concern themselves with.  At Nelson International, we spend our days consumed with the regulations that govern the products our customers import and export and encourage our clients and interested clients to speak with us before they plan to ship goods internationally to help review the products for classification, duty assessment and compliance with governing regulations.