Will Your Wood Trade Business Meet the Lacey Act Due Care Standards?

Floor Covering Institute explains how the Department of Justice May Apply the Lacey Act Standard of "Due Care" to the flooring and furniture industries. The following is an extract of FCI's research article on the Lace Act Amendments and Due Care.
By: Susan Negley; Jim Gould Floor Covering Institute
Oct. 20, 2009 - PRLog -- St. Louis, MO  -- The floor covering industry is still learning what the 2008 Lacey Act Amendments mean to everyone in the supply chain.  That is why the Floor Covering Institute researched and wrote an article suggesting what steps are important in the exercise of "due care" and how the Department of Justice may apply the standard during investigations of illegal logging.  Our conclusions are based in part on what the Department of Justice has done in the past and what they have said about conducting illegal wood investigations in the future.  

The research article is now the basis of training by members of the wood products channel in several countries. The staff at FindAnyFloors.com wrote" For those flooring professionals that deal in wood flooring, this is a must read". The Managing Editor of Timber Forestry E-News Australia wrote: "It would be good to see practical information such as this appearing in the Australian timber and wood-processing trade news, as so many businesses, particularly those down-stream (furniture, kitchen manufacturers, etc), still don't think that the illegal logging laws will affect them – or worse, don't even know about it."

The full research article is available on the Floor Covering Institute Website at [http://floorcoveringinstitute.com].  The following extract contains nine important conclusions.

Extract ----
The world’s most far reaching and punitive law of its kind holds the entire wood products supply chain responsible for avoiding illegal wood and imposes a standard of “due care” on every person in the chain. Yet, as the law is phased in, confusions persists about who is responsible and what it takes to comply.

Initially, some international suppliers cried foul making accusations of restraint of trade. This was evident as Asia’s largest floor covering exhibition, the Sino-US-Europe Wood Flooring Summit, held at Domotex Asia China Floor in Shanghai earlier this year. Five months later these sentiments are not resolved due in part to a lack of understanding of the act’s history and intent as well as how to comply with the law. At the same time, we see some domestic channel partners remain too complacent.

The law is intentionally void of guidelines about what actions satisfy the standard of “due care” imposed by Congress.  Instead, it holds the trade responsible for figuring that out.  The Floor Covering Institute  has researched how the Department of Justice (“DOJ”) applied the standard of due care in past Lacey investigations  and looked to the DOJ’s internal briefings for comments on how they might apply the law to timber investigations in the future.  In the research, which is discussed in the full version of  Continuing Wood Trade Under the Lacey Act Amendments,  we found information that leads to these conclusions:

1.   Certifications are evidence of “due care” not proof that wood is legal;
2.   The standard of “due care” may be applied differently to different people;  
3.   There is no “innocent owner” defense and illegal flooring can be seized at any point in the chain;
4.   Relying solely upon others to comply may be insufficient in the face of investigations;  
5.   Certain facts should trigger a heightened degree of care;
6.   A Lacey violation can also lead to prosecution under other laws;
7.   The Act is violated as soon as illegal wood enters the supply chain, whether on domestic or foreign soil;
8.   To be in violation of the Lacey Act one only needs to have particiapted in the supply chain that received, transported or sold it;
9.   Developing procedures that demonstrate due care well beyond the mandatory “import declaration” is prudent.

Eventually the DOJ will prosecute a timber based violation. They won't have to start from scratch. Illegal logging has been investigated for years by NGOs that have traced illegal logs from stump to products on shelves of major U.S. retailers. The key to avoiding or minimizing penalties is to exercise due diligence in buying products. This is true for everyone in the chain from manufacturers to retailers.

The institute's full research article is posted on its website. That article goes into these nine points in more detail.   To learn more about how the DOJ may apply the standard, the role third party certifications, what the DOJ expects to trigger a higher degree of care, what constitutes “illegally logged wood”, penalties, compliance, enforcement, the PPQ 505 Plant Product Declaration, countries known to conduct illegal logging and the evolution of the Lacey Act, launch full version of Continuing Wood Trade Under the Lacey Act Amendments at this link [http://floorcoveringinstitute.com]  where a full version of the research article with resources is available or contact http://www.info@floorcoveringinstitute.com

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The Floor Covering Institute is an independent consulting group focused on creating business opportunities and solutions for the global flooring industry.
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Tags:Lacey Act Amendments, Importing, Compliance, Due Care, Floor Covering Institute
Industry:Importing, Floor covering, Furniture
Location:Missouri - United States
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