### United States Department of Agriculture
Animal and Plant Health Inspection Service January 2012 Regulatory Impact Analysis & Analysis in Support of Certification that the Rule will not have a Significant Economic Impact on a Substantial Number of Small Entities Proposed Rule APHIS

- 2007

- 0086 RIN 0579

- AD50 Forfeiture Procedures under the Endangered Species Act and the Lacey Act Amendments

Policy & Program Development Policy Analysis & Developmenti 

### Summary
APHIS is amending the regulations that set forth its f orfeiture p rocedures with respect to enforcement of the Endangered Species Act, the Lacey Act, and the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) . A PHIS and the Department of Homeland Security’s Bureau of Customs and Border Protection are responsible for initiating seizures of unlawfully imported plants and plant products at U.S. ports of entry. Among other amendments , the proposed rule would change t he basis for appraising the value of seized property, increase the monetary threshold of seized items requiring judicial forfeiture from $10,000 to $15,000, provide for the assessment and recovery of the costs of transferring, storing, caring for and maint aining seized plants and plant products, and prohibit a violator from attempting to buy the unlawfully imported item if it is sold at auction by APHIS. The proposed forfeiture provisions would be easier to understand by importers and the general public. A pprais al of seized property would be streamlined to simply using the value shown on the imported item’s invoice. The increase in the threshold value for judicial forfeiture would allow for more efficient use of U.S. Attorney resources. APHIS and U.S. tax payers would
be relieved of the financial burden associated with the transfer, storage, care, and maintenance of seized property by requiring the person whose act or omission of required information was the
basis for the seizure to bear these costs

. Costs of the proposed rule would be minimal. Because the threshold for a case proceeding through judicial forfeiture would be raised from $10,000 to $15,000, there would be more cases proceeding through administrative forfeiture. However, any additional demand s on administrative resources are expected to be manageable, and would not represent a net increaseii in costs for the Federal government. Costs incurred with regard to the transfer, storage, care, and maintenance costs of seized property would be appropria tely directed from the Federal government to persons responsible for violating the Endangered Species Act or Lacey Act.
Most of the establishments that may be affected by the proposed rule are considered small. However, the only entities affected would be those that violate the Endangered Species Act or the Lacey Act, such as by attempting to import illegal plants or submitting false records for plant or plant product s that fall under the purview of the ES or Lacey acts . Based on this information, the Adm inistrator of the Animal and Pl ant Health Inspection Service has
determined that this action will not have a significant economic impact on a substantial number
of small entities.iii 

### Table of Contents Summary

................................ ................................ ................................ .............................. i
Introduction

................................ ................................ ................................ ......................... 1
Benefits of the Rule

................................ ................................ ................................ ............ 2
Costs of the Rule

................................ ................................ ................................ ................. 3
Alternatives to the Rule

................................ ................................ ................................ ...... 4 Potential Impact on Small Entities

................................ ................................ ...................... 41 

### Introduction
The Animal and Plant Health Inspection Service (APHIS) administers the provisions of the Endangered Species Act of 1973 , as amended , and the Lacey Ac t Amendments of 1981 , as amended, pertain ing to plants and plant products. 1 APHIS enforces these statutes and implement s the Convention o n International Trade in Endangered Species (CITES) of Wild
Fauna and Flora , by initiating s eizures of unlawfully imported live plants and plant products at U.S. ports of entry.
W hen a CITES

- regulated species is presented for import into the United States, it must be accompanied by the required permit or certificate. If it is not, the commodity is subject to seizure by, and forfeiture to, the United States. APHIS and the Department of Homeland Security’s Bureau of Customs and Border Protection ( CBP ) initiate approximately 100 seizures each year for plants and plant products import ed into th e U.S. without the proper CIT ES
documentation. Wood, wood products, medicinal items, and live plants constitute the bulk of property that has been seized in the past. In 2000, t he Civil Asset Forfeiture Reform Act (CAFRA) was enacted to provi de a more just and uniform procedure for Federal civil forfeitures. APHIS is proposing to update its regulations regarding f orfeiture p rocedures under the Endangered Species Act and the Lacey Act
in accordance with CAFRA.
This rule would amend APHIS’ forfeiture regulations to increase the monetary threshold
of seized items requiring judicial forfeiture from $10,000 to $15,000 . This means that s eized

1 The Lacey Act makes i t unlawful to import, export, transport, sell, receive, acquire, or purchase in interstate or foreign commerce certain plants taken in violation of the laws of a U.S. State or any foreign law that protects plants. The Lacey Act also makes it unlawful to m ake or submit any false record, account, or label for, or any false identification of any plant. In addition, certain plants and plant products must be accompanied at importation with a declaration providing, in part, the scientific name of the plant and where the plant was harvested.2 imported property with an estimated value of $15,000 or more would proceed through judicial
forfeiture , while that valued at less than $15,000 would proceed through administrative
forfeiture

. APHIS is also proposing to amend its forfeiture regulations to provide for the assessment and recovery of the costs of transferring, storing, caring for and maintain ing seized imported plants and plant products

. The proposed rule would also prohibit a violator from attempting to buy the unlawfully imported and seized item if it is sold at auction by APHIS.
B enefits and costs of the rule are examined in accordance with Executive Order 12866 , and the benefits are expected to exceed the costs overall . Possible impacts on small entities are considered in accordance with the Regulatory Flexibility Act. 

### Benefits of the Rule

The expected bene fits of this proposed rule would be several

. The proposed forfeiture provisions would be easier to understand by importers and the general public . An example is the proposed revision of the procedure used to appraise the value of seized property. The c u rrent regulations state that if the property can be legally sold in the United States, its value will be determined by ascertaining the price at which the property or similar property in the ordinary course of trade is freely offered for sale at the time o f appraisement. The regulations further state
that i f the property may not lawfully be sold in the United States, its value shall be determined by
other reasonable means. The proposed rule would streamline the appraisal process to simply using the value

s hown on the imported item’s invoice. In the uncommon event that an invoice is unavailable, the value of the property would be determined by ascertaining the price at which si milar property is offered for sale at or as near as possible to the time and plac e of seizure.3 Another b enefit of the proposed rule would be an increase in the threshold at which a
case is referred to a U.S. Attorney ’s Office for institution of judicial forfeiture. Currently, property having a retail value over $10,000 proceed s through judicial forfeiture. Under the proposed rule, that threshold value would be increased to $15,000, to account for inflation and to
allow for more efficient use of U.S. Attorney resources. APHIS anticipates that more cases will fall below the $15 ,000 threshold and, consequently, proceed through administrative forfeiture.
Another benefit of the proposed rule would be the savings to APHIS from assessing the
cost of transfer, stor age, care, and maintenance of a seized imported plant or plant product directly to the person whose act or omission was the basis for the seizure

. That person would be

sent an itemized invoice for the amount of the expenses and instructions on the time and manner of payment.
T he proposed rule would also set fo rth requirements for the disposal of seized property. The provisions would prohibit the person responsible for the violation from receiving a benefit from the disposal, such as by attempting to buy the unlawfully imported item if it is auctioned by
APHIS. 

### Costs of the Rule

Costs of the proposed rule would be minimal. Because the threshold for a case proceeding through judicial forfeiture would be raised from $10,000 to $15,000, there would be more cases proceeding through administrative forfeiture , which is less costly

. A ny additional demands on administrative resources are expected to be manageable, and would not represent a net increase in costs for the Federal government. Costs incurred with regard to the transfer, storage, care, and maintenance of sei zed propert ies would be appropriately directed from the Federal government to persons responsible4 for violat ing the Endangered Species Act or Lacey Act

. Historically, these kinds of costs vary from year to year (see table 1) . They depend upon the number and the kind of the illegal shipments that have been seized rather than their value . APHIS ’s appropriated funds are currently used to cover expenditures for transfer, storage and maintenance of seized goods.
APHIS asks for the violators to be responsible for these expenses. Table 1. APHIS expenses for transfer, storage and maintenance of seized illegal shipments (2005

- 10) 2005 2006 2007 2008 2009 2010 $180,000 $94,000 $64,000 $40,000 $40,000 $42,000 Source: APHIS, PPQ, RIPPS, PSB 

### Alternative s to the Rule
This rulemaking is required in order that APHIS’ forfeiture regulations are in compliance with The Civil Asset Forfeiture Reform Act of 2000. Alternatives to the proposed rule would be to not include one or more of its provisions. However, each of the rule’s revisions is expected to benefit the Agency and general public, including the change in how the value of seized property
would be determined , the increas e in the monetary threshold for cases proceeding through judicial forfeiture, and th e assessment of the costs of transfer, storage, care, and maintenance of seized property to the person responsible for the violation

. 

### Potential Impact on Small Entities

This section provides the basis, as required by the Regulatory Flexibility Act, for certification by the APHIS Administrator that the proposed rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. The Small Business Administration (SBA) has established guidelines for determining
which entities are considered small. Plants and plant products such as fruits, vegetables, and nursery stock are imported into this country for commercial purposes, for research, for education,5 and by hobbyists and collectors

. Therefore, t he importers potenti ally affected by the proposed rule represent a broad cross

- section of businesses, government and university research institutions, non

- profit operations, and individuals. The Regulatory Flexibility Act does not address the activities of private individual s. Establishments that i mport plants and plant products are primarily categorized according

to the North American Industrial Classification System (NAICS) within subsector 424, Merchant Wholesalers, Nondurable Goods . Importers either sell goods on t heir own account (import merchants) or arrange for the sale of goods owned by others (import agents and brokers). Examples of industries that may be affected by the proposed rule are Fresh Fruit and Vegetable Merchant Wholesalers (NAICS 424480 ) , Packaged Frozen Food Merchant Wholesalers (NAICS
424420 ) , Flower, Nursery Stock, and Florists’ Supplies Merchant Wholesalers (NAICS 424930 ) and, as importers of seeds , Farm Supplies Merchant Wholesalers (NAICS 424910 )

. B usinesses with in these industries are considered small if they have 100 or fewer employees. Table 1 shows the prevalence of small entities within these industries.

Table 2

. Prevalence of small entities among industries that include importers that may be affected by the proposed rule, 2007

Industry Number of Establishments Number of Establishments that o perated the e ntire Year Number of Establishments with fewer than

100 employees that operated the e ntire Year Small

- entity Establishments as a percentage of those that operated the

e n tire Year Fresh Fruit and Vegetable Merchant Wholesalers 5,074 4,437 4,207 94.8%
Packaged Frozen Food Merchant Wholesalers 3,502 3,204 2,988 93.3%6 Flower, Nursery Stock, and Florists’ Supplies Merchant Wholesalers 4,218 3,601 3,534 98.1%

Farm Supplies Merchant Wholesalers 7,738 7,199 7,138 99.2% Source: U.S. Census Bureau, 2007 Economic Census, http://factfinder.ce nsus.gov/servlet/IBQTable?_bm=y&

- geo_id=&

- fds_name=EC0700A1&

- _skip=3600&

- ds_name=EC0742SSSZ2&

- _lang=en Note: The Small Business Administration’s small

- entity standard is 100 or fewer employees

. Entities conducting research and experimental development on plants and plant products may also be affected by the proposed rule . Many of these entities are classified within Research and Development in Biotechnology (NAICS 541711) or Research and Development in the Physical, Engineering, and Life Sciences (exce pt Biotechnology) (NAICS 541712 ) . For both industry categories, the small

- entity standard is 500 or fewer employees

. According to the 2007 Economic Census, small entities comprised 91 percent (1 , 9 77 of 2,167 establishments) and 92 percent ( 9,700 of 10,55 1 establishments) , respectively, of all entities within these industries that operated for th e entire year. 2
P lants and plant products are also imported by entities classified as Museums (NAICS 712110) or Zoos and B otanical G ardens ( NAICS 712130 )

. For both industries, the small

- entity standard is annual revenue of not more than $7 million. In 2007, the average revenue of museums was about $2.0 million, and the average revenue of zoos and botanical gardens was about $4.9 million, well below the small

- en tity standard in both cases

. 3

2 U.S. Census Bureau, 2007 Economic Census, http://factfinder.census.gov/servlet/IBQTable?_bm=y&

- geo_id=&

- fds_name=EC0700A1&

- _skip=900&

- ds_name=EC0754SSSZ2&

- _lang=en 3 U.S. Census Bureau, 2007 Economic Census, http://factfi nder.census.gov/servlet/IBQTable?_bm=y&

- geo_id=&

- fds_name=EC0700A1&

- _skip=900&

- ds_name=EC0754SSSZ2&

- _lang=en7 It is clear that most entities covered by the proposed rule are considered small , as most importers are considered small. However, the only entities affected would be ones that violate the Endangered Species Act or the Lacey Act, such as by attempting to import illegal plants or submitting false records for plant or plant product imports. The majority of the imports are
consistent with these Acts. Based on this information, t he Administrator of the Animal and Pl ant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number of small entities.