FCI Addresses Lacey Act Trade Concerns

St. Louis, MO, Sept. 4,2009—The Floor Covering Institute has addressed international trade concerns regarding the Lacey Act in a new paper "Continuing Wood Trade Under the Lacey Act Amendments."

In May 2008, the U.S. passed the world's most punitive and far reaching "ban" on illegally harvested forest products; declaring this country would no longer traffic in "illegally logged wood".

It placed the burden of compliance on the wood products supply chain and made failure to comply a crime. The law provides no guidance on what actions may satisfy the standard of "due care" set by congress.

The supply chain is left to determine that for itself. Consequently, some international suppliers continue to believe the Lacey Act is a tool to limit competition in the world's largest wood market while some members of the domestic channel are too complacent.

Concern, confusion and even anger were evident over the newly implemented act at this year's Sino-US- Europe Wood Flooring Summit held in Shanghai at Domotex Asia China Floor, Asia's largest floor covering exhibition. This is due in part to a lack of understanding of the act's history and intent as well as how to continue trade under the specter of Lacey, the institute said.

The Lacey Act Amendments are intended to prevent illegal wood products from entering the U.S., making it a crime to receive, transport or sell timber products harvested in a manner contrary to the laws of the country from which the timber originated.

Once illegal wood enters the U.S. supply chain, whether on domestic or international soil, a Lacey Act violation is triggered placing everyone in the downstream supply chain at risk of prosecution, fines and seizure.

Anyone who knows or should have known that the wood was illegal is guilty of a crime.

Essentially, the most punitive law against illegal logging ever aligns the risk-benefit assessment along the supply chain by holding the entire chain accountable for timber it chooses to cut, sell or buy.

The key to avoiding or minimizing penalties is exercising due diligence in buying wood products. The law sets a standard of "due care" to be used during the import and buying process for all stakeholders.

During its investigations, the U.S. Department of Justice will evaluate the standard of care taken by parties and may hold some to a higher standard than others, depending upon the circumstances.