Implementation of Revised Lacey Act Provisions

(USDA/APHIS via World Trade Interactive)

Declaration Enforcement Postponed for Numerous Products

The U.S. Department of Agriculture, Animal and Plant Health Inspection Service, has issued a notice modifying the schedule of enforcement of the import declaration requirement under the Lacey Act amendments. This modification postpones enforcement for numerous products. Comments on this action are due by Nov. 2 (refer to APHIS-2008-0119 for contact details).

Under the Lacey Act amendments included in the 2008 Farm Bill, imports of certain plants and plant products must be accompanied by an import declaration that contains, among other things, the scientific name of the plant, the value of the importation, the quantity of the plant and the name of the country from where the plant was harvested. For paper and paperboard products containing recycled content, the declaration also must include the average percent of recycled content without regard for species or country of harvest. USDA began phasing in its enforcement of this requirement in December 2008.

After a review of comments received, further internal consideration and experience with implementation of the first phase of enforcement of the declaration requirement, the USDA has revised the phase-in schedule as follows. USDA emphasizes, however, that Lacey Act amendment provisions other than the import declaration are already effective and that actions to enforce those provisions may be taken at any time.

Revised List for Phase III

Phase III, which is scheduled to begin Oct. 1, now covers only items classified in the following HTSUS headings.

• 4402 (wood charcoal)
• 4412 (plywood, veneered panels), except 4412.99.06 and 4412.99.57
• 4414 (wooden frames)
• 4419 (tableware and kitchenware)
• 4420 (wood marquetry, caskets, statuettes)

Revised List for Phase IV

Phase IV, scheduled to begin April 1, 2010, has been substantially revised and now covers the following HTSUS headings.

• 4421 (other articles of wood)
• 6602 (walking sticks, whips, crops)
• 8201 (hand tools)
• 9201 (pianos)
• 9202 (other stringed instruments)
• 9302 (revolvers and pistols)
• 9305.10.20 (parts and accessories for revolvers and pistols)
• 9401.69 (seats with wood frames)
• 9504.20 (articles and accessories for billiards)
• 9703 (sculptures)

Future Changes

USDA states that there will be no further additions to phases III or IV and that it intends to provide at least six months’ notice to persons and industries affected by any future changes to facilitate compliance with the new requirements.

In addition, USDA is seeking comments on the following HTSUS headings currently under consideration for subsequent enforcement phases that would be scheduled to begin on or after Sept. 1, 2010.

• 4405 (wood wool [excelsior])
• 4410 (particle board)
• 4411 (fiberboard of wood)
• 4412 (plywood, including 4412.99.06 and 4412.99.57)
• 4413 (densified wood)
• 4415 (packing cases, boxes, crates, drums)
• 4416 (casks, barrels, vats, tubs)
• 4701 (mechanical wood pulp)
• 4702 (chemical wood pulp, dissolving)
• 4703 (chemical wood pulp, sulfate)
• 4704 (chemical wood pulp, sulfite)
• 4705 (combination mechanical and chemical)
• 4801 (newsprint)
• 4802 (uncoated writing paper)
• 4803 (toilet or facial tissue stock)
• 4804 (uncoated kraft paper)
• 4805 (other uncoated paper and board)
• 4806 (vegetable parchment, etc.)
• 4807 (composite paper and board)
• 4808 (corrugated paper and board)
• 4809 (carbon paper)
• 4810 (coated paper and board)
• 4811 (paper coated, etc.)
• 6601 (umbrellas)
• 6603 (umbrella parts)
• 9205 (wind musical instruments)
• 9401 (seats)
• 9403.30 (wooden office furniture)
• 9403.40 (wooden kitchen furniture)
• 9403.50 (wooden bedroom furniture)
• 9403.60 (other wooden furniture)
• 9403.81 (furniture of cane, osier, bamboo, rattan or similar materials)
• 9504 (articles for arcade, table or parlor games)


Finally, USDA continues to consider the applicability of the import declaration requirement to other products not included in the revised phase-in schedule or listed above and seeks comment on how this requirement should be enforced as to additional goods classified under the following HTSUS chapters.

• chapter 48 (paper and articles of)
• chapter 82 (tools, implements)
• chapter 89 (ships, boats and floating structures)
• chapter 93 (arms and ammunition)
• chapter 94 (furniture, etc.)
• chapter 95 (toys, games and sporting equipment)
• chapter 96 (brooms, pencils, buttons)

Enforcement Delayed for Composite, Recycled, Reused Materials

Several commenters contended that identifying composite and recycled or reused materials (e.g., medium density fiberboard, particleboard and scrap wood) to the genus and/or species level would be difficult and in some cases impossible. In response to those comments, USDA has decided to further delay enforcement of the declaration requirement for these products so that it would begin no earlier than Sept. 1, 2010.

Use of Spp. to Identify Species of Imported Plants

Several commenters proposed that USDA allow for importers to provide only the genus name in circumstances where the individual species would be difficult to identify. USDA has responded by stating that in circumstances where the list of possible species in a particular product includes all species in a genus, it is acceptable to use “spp.” following the genus name on the import declaration form. However, when reference to all possible species in a genus is not accurate (based on geographical or other factors), importers are expected to provide either the single genus and species or a specific list on the import declaration form of all possible species that may have been used to produce the plant product.

Federal Register Reference: Implementation of Revised Lacey Act Provisions, September 2, 2009 available here (PDF).

USDA Proposes Rule to Implement Assessment on Dairy Imports

(World Trade Interactive)

The Department of Agriculture’s Agricultural Marketing Service is seeking comments by June 18 on proposed amendments to the Dairy Promotion and Research Order that would implement an assessment on imported dairy products. The 2002 Farm Bill requires the imposition of such an assessment to fund promotion and research, while the 2008 Farm Bill specifies a mandatory import assessment rate of 7.5 cents per hundredweight of milk or equivalent thereof.

According to AMS, the assessments on imported dairy products would be collected by U.S. Customs and Border Protection from importers at the time the entry summary documents are filed. If the importer has adequate documentation concerning the milk solids content of the imported dairy product, the assessment would be based on that; otherwise, a default assessment rate for each HTSUS number would be applied. The assessments collected would be transferred to the Dairy Board to fund the national dairy promotion and research program. The Dairy Board would establish a compliance program and procedures to verify, as necessary, that correct assessments have been paid by importers.

Government of Canada Responds to U.S. Country-of-Origin Labelling Measures

(Minister of International Trade)

The Government of the United States of America today published its final regulations for U.S. country-of-origin labelling (COOL). The Government of Canada recognizes provisions in the final rule that will help to level the playing field for Canadian producers and will strengthen the integrated North American livestock industry.

“I am pleased that key issues raised by Canada are addressed in these measures,” said the Honourable Stockwell Day, Minister of International Trade and Minister for the Asia-Pacific Gateway. “Together with the provinces and industry, we will continue to assess the trade and market impact of this legislation. We have built a strong and durable trade relationship over the years with the United States and we must more than ever aggressively pursue this already robust relationship during these difficult economic times.”

“This government always stands up for Canadian livestock producers and that hard work is paying off as we protect and expand opportunities for our producers within the integrated North American beef industry,” said the Honourable Gerry Ritz, Minister of Agriculture and Agri-Food. “These final regulations will help to address the concerns we’ve consistently raised with our American counterparts, and we will continue to work with the U.S. to prevent any unfair harm to our industry.”

“The bottom line is that the changes to the final rule will help to keep livestock trade moving throughout the integrated North American market and will benefit producers, consumers and processors,” added Minister Day.

The final regulations will allow for more flexibility on labelling requirements in the U.S. for meat from animals of American and Canadian origin that are brought together during a production run. Canada has repeatedly raised concerns that COOL could impose unfair costs, especially on Canadian livestock producers, by requiring the segregation of Canadian animals.

Most recently, Canada and the U.S. held formal consultations under the World Trade Organization regarding the adverse impact of the interim regulatory measures on Canadian livestock and meat producers. Canada will continue to monitor the situation and defend Canadian producers through discussions and representations to the U.S. at all levels.

The U.S. and Canada are each other’s largest agricultural trading partners. In 2007, bilateral agricultural trade totalled $32.3 billion.

U.S. Releases Details on Country-Of-Origin Labeling

(Journal of Commerce Online)

The Department of Agriculture today [Monday] announced details of the final regulation for the mandatory country of origin labeling (COOL) program required by the 2002 and 2008 farm bills.

The full text of the final rule will be published in the January 15 Federal Register and become effective on March 16.

The rule covers muscle cuts and ground beef, lamb, chicken, goat and pork; wild and farm-raised fish and shellfish; perishable agricultural commodities (fresh and frozen fruits and vegetables); macadamia nuts; pecans; ginseng, and peanuts.

The rule prescribes specific criteria that must be met for a covered commodity to bear a “United States country of origin” declaration.

The rule also contains provisions for labeling covered commodities of foreign origin; meat products from multiple origins; ground meat products, as well as commingled covered commodities.

Fish and shellfish must carry labels specifying their method of production, “wild” or “farm-raised.” Read more here and click here to read the text of the final rule.

ITC Investigation Will Examine Use of First Sale Rule

(World Trade Interactive)

The International Trade Commission has launched an investigation on the use of the First Sale Rule with respect to the customs valuation of imported goods.

The 2008 Farm Bill requires the ITC to submit to the House Ways and Means and Senate Finance committees a report that includes the following information.

• the aggregate number of importers declaring that the transaction value of the imported merchandise is determined on the basis of the First Sale Rule, including a description of the frequency of the use of that method

• the tariff classification of such merchandise on an aggregate basis, including an analysis by sector

• the aggregate transaction value of such merchandise, including an analysis by sector

• the aggregate transaction value of all merchandise imported into the U.S. during the specified one-year period

The ITC does not plan to hold a public hearing in the course of this investigation. However, interested parties are invited to submit written comments no later than April 30. The ITC anticipates that it will transmit its final report to Congress by February 10, 2010.

To assist the ITC in preparing its report, the Farm Bill requires U.S. Customs and Border Protection to provide monthly reports for the period August 20, 2008, through August 19, 2009, that include (a) the number of importers declaring that the transaction value of the imported merchandise is determined on the basis of the first or earlier sale, (b) the tariff classification of such merchandise and (c) the transaction value of such merchandise.

New Declaration Requirement for Imported Goods of Wood or Plants to be Delayed

(World Trade Interactive)

Congressional staff said this week that enforcement of a sweeping new requirement for importers of plants or plant products, including wood and wood products, to bring their goods into the U.S. will be delayed past the statutory December 15 deadline. Under provisions in the 2008 Farm Bill that amended the Lacey Act, such importers must submit upon entry a declaration that includes the genus and species of the plant(s) used, the value and quantity of the importation, and the country of origin of the imported product. Industry representatives as well as federal agencies have expressed concern about the scope and implementation of this new requirement, and there have been numerous discussions and meetings in recent weeks in an effort to determine the details.

Delayed Enforcement. At a September 17 meeting with industry and environmental groups that followed a September 15 meeting with the affected federal agencies, congressional staff indicated that Congress appears to have given its blessing to the delayed implementation of the declaration requirement. As a result, while the statutory enforcement date is December 15, neither U.S. Customs and Border Protection nor the Department of Justice will enforce the requirement until April 1, 2009. The interim period will be considered an “education period,” and CBP is contemplating the use of a voluntary paper declaration during this time, but details of this provision still need to be worked out.

There also appears to be an agreement that implementation of the declaration requirement will be phased in, but it remains in draft form. The concept is that CBP will begin requiring declarations for core timber products first, then over time work its way out to other plant and wood products. There is still discussion about whether the phases will go HTSUS chapter by chapter or line by line. In addition, the schedule of the phased-in implementation has not been determined, nor is there agreement on the list of products and when/if they will be phased in. Click here for the complete article.

The Lacey Act Amendments: An Approaching Catastrophe At the Border

(NCBFAA: The National Customs Brokers & Forwarders Association of America)

Included in the recently enacted Farm Bill is a provision to expand the scope of plants covered by the Lacey Act, a law that prohibits trade in wildlife, fish and plants that have been illegally taken, possessed, transported or sold. The Lacey Act Amendments are designed to prevent illegal logging and illegal harvesting of protected plants and trees.

One feature of the Lacey Act Amendments is a new import declaration requirement for plants and plant products beginning December 15, 2008. The declaration must contain precise sourcing information, including the scientific name of any and all plant/wood (including the genus and species) contained in the product and the name of the country from which the plant/wood was taken, among other things.

This seemingly simple requirement raises significant concerns:

• The sheer scope of products that will be subject to the import declaration is extraordinary. “Plants and plant products” is defined to include such widely disparate products as furniture, wine with corks, umbrellas, boats, cars, chewing gum, rayon, books, pots and pans with wood handles, maple syrup. In fact, CBP reports that the import declaration requirement will impact 85 out of the 97 chapters in the Harmonized Tariff Schedules.

• The import declaration will have to be collected manually, since CBP lacks the programming funds to collect this data electronically. Moreover, there is not sufficient time to develop the needed substantive programming changes before the deadline, even if funding were not an issue. This will remove an estimated 50% of import transactions from CBP’s electronic processing system, with profound repercussions on the supply chain. This means millions of pieces of paper injected into a process that is now essentially paperless.

• CBP and USDA have no electronic interface so the data will be manually shared and reviewed. This is absurdly inefficient and, given the volume of trade, it will be a futile exercise yielding little environmental benefit.

• The required scientific information for the import declaration is often unobtainable for products that incorporate many types of plant/wood species. In situations in which the original tree or plant source is not known, the law requires the filing of even more detailed certifications – the name of each species of plant/wood that mighthave been used to produce the product or the name of each country from which the plant/wood might have been taken. How meaningful is this expanded list of speculative possibilities to anyone?

The Lacey Amendments were passed with the best of intentions but without a complete understanding of the far-reaching and disruptive impact on the supply chain and, in turn, the economy, which is so dependent on the smooth flow of commerce. Implementation of a paper-intensive requirement for nearly half the 30 million annual import transactions moving in a fast-paced, fully automated trade environment is unthinkable. We urge Congress to roll back the implementation of the import declaration requirement for two years while a review is conducted by an independent agency, such as the Government Accountability Office, to suggest ways that the proposal can be more focused, realistic and enforceable.

New U.S. Law to Require Reporting of all Trees and Tree Products (Including Species & Genus)

(GHY International)

A new law will go into effect on December 15 and will have far-reaching consequences for international trade and will require an enormous amount of resources for CBP to implement.

Sec. 8204 of the Farm Bill broadens the definition of "plant" under the Lacey Act to include trees and products that come from trees, and requires additional reporting (detailed below) for imports of these products. CPB is working with USDA to determine what products will be subject to this new law. Exclusions include common food crops and common cultivars (yet to be fully defined; it is not clear if cotton will be exempted). Outside of these and some other specific exclusions identified in Sec. 8204, CBP says the new law does not provide them with much wiggle room.

What products will be subject to this law?

The question at hand is: what products will be covered by this new law? The answer will almost certainly surprise you (hint: it’s just about everything).

Here is a small part of a very long list of items (aside from obvious examples such as furniture, paper and wood flooring that are likely to be covered by this law:

• Wine with corks;
• Pots and pans with wooden handles;
• Musical instruments, such as violins;
• Pharmaceutical products;
• Textiles;
• Lipstick (made in part from wax from carob tree);
• Dried soup (that contains cellulose, which is a major component of wood);
• Hairspray (that is made in part from tree resins); and
• Anything that comes with an instruction booklet (even if the product itself contains no wood or wood by-product).

Example of how far reaching this could be: Country Time lemonade that is contained in a plastic bottle, with a plastic cap and covered with a plastic wrapper contains, among other things, glycerol ester of wood rosin. Glycerol ester of wood rosin is a common food additive and is prepared from resin acids of wood rosin harvested from the stumps of the longleaf pine. It would be covered by this law.

Reporting Requirements:

Sec. 8204 requires that import declarations state the scientific name of any plant (including genus and species) used to produce the plant product and the country of origin of the plant. If the genus and species is not known, then the declaration must contain the name of every species of plant that may have been used to produce the plant product; and if the country from which the plant was taken and used to produce the imported plant product is unknown, the name of every country from which the plant may have been taken must be stated. Packaging material that supports, protects, or carries another item is exempted, unless the packaging material itself is the item being imported.

Sec. 8204 makes commerce in products made from illegally harvested or traded plants and plant products, including wood, a federal crime and is going to be enforced by the US Department of Justice. CBP has managed to get Congress to agree to a phased-in implementation schedule, but Congress has not approved the actual schedule.

Lobbying efforts to minimize impact to trade community:

Efforts are getting underway to lobby Congress to make changes to Sec. 8204, or at the very least, delay implementation

Another Softwood Lumber Crisis Looming?

(Embassy – Teresa Hille)

Two American senators managed to sneak controversial amendments into that country’s Farm Aid bill before it was approved by Congress on May 7. Now U.S. importers will have to certify that tariffs and duties have been added to the price of lumber before it is exported.

The move has prompted concern Canada is facing another softwood lumber war less than two years after the Conservative government proudly said it had resolved the conflict. While a clerical error means the bill has to be voted on again, Embassy asked:

“What do you make of the fact that two American senators inserted into this month’s U.S. Farm Bill a requirement that will force U.S. importers of Canadian lumber to certify that the appropriate tariffs and duties have been added to the lumber’s price before it is exported?”

David Emerson, minister of international trade – “Well, it’s something that we’re strongly opposed to. We actually think that it’s counter to the softwood lumber agreement. The U.S. trade representative was opposed to it as well. This is something that Congress is doing and the president has vetoed. We’ll see what happens next week when it goes back for a revote in Congress.”

Brenda Swick, Ottawa-based lawyer with McCarthy Tétrault – “These new requirements are illegal under the 2006 agreement, which gives Canada the sole authority to impose and administer export taxes on shipments to the U.S. They give the U.S. the unilateral authority to expand the scope of the products covered under the agreement. They impose costs unforeseen under the agreement on Canadian exporters. And if imposed, they ought to be immediately challenged by Canada under the dispute settlement provisions in the agreement.”

Debra Steger, University of Ottawa professor of international trade – “I think it’s adding another barrier to exports of softwood lumber into the U.S. that is not a necessary barrier. It shows a lack of trust on the part of the U.S. Congress and certainly in the administration of the softwood lumber agreement. It’s not one of the criteria set out in the softwood lumber agreement.”

Elliot Feldman, Washington-based lawyer at Baker and Hostetler – “Now this act I believe...probably violates NAFTA the same way the Byrd Amendment did. I don’t believe there was notice. I don’t believe there were consultations. I don’t believe therefore that the passage of [the Farm Bill] conforms with the NAFTA requirements. And I haven’t heard any Canadian protest – it should have come from the government.”

More responses in the complete article. Additional information on the Import Declaration amendments in the Farm Bill is available here.