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[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]

 
                         OVERSIGHT HEARING ON 
                          THE 2008 LACEY ACT 
                        AMENDMENTS PART 1 AND 2 

=======================================================================

                           OVERSIGHT HEARING

                               before the

                  SUBCOMMITTEE ON FISHERIES, WILDLIFE,
                       OCEANS AND INSULAR AFFAIRS

                                 of the

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                    Thursday, May 16, 2013 (Part 1)
                   Wednesday, July 17, 2013 (Part 2)

                               __________

                           Serial No. 113-16

                               __________

       Printed for the use of the Committee on Natural Resources

         Available via the World Wide Web: http://www.fdsys.gov
                                   or
          Committee address: http://naturalresources.house.gov
      
                               ----------
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                      Washington, DC 20402-0001

                     COMMITTEE ON NATURAL RESOURCES

                       DOC HASTINGS, WA, Chairman
            EDWARD J. MARKEY, MA, Ranking Democratic Member

Don Young, AK                        Peter A. DeFazio, OR
Louie Gohmert, TX                    Eni F. H. Faleomavaega, AS
Rob Bishop, UT                       Frank Pallone, Jr., NJ
Doug Lamborn, CO                     Grace F. Napolitano, CA
Robert J. Wittman, VA                Rush Holt, NJ
Paul C. Broun, GA                    Raul M. Grijalva, AZ
John Fleming, LA                     Madeleine Z. Bordallo, GU
Tom McClintock, CA                   Jim Costa, CA
Glenn Thompson, PA                   Gregorio Kilili Camacho Sablan, 
Cynthia M. Lummis, WY                    CNMI
Dan Benishek, MI                     Niki Tsongas, MA
Jeff Duncan, SC                      Pedro R. Pierluisi, PR
Scott R. Tipton, CO                  Colleen W. Hanabusa, HI
Paul A. Gosar, AZ                    Tony Cardenas, CA
Raul R. Labrador, ID                 Steven A. Horsford, NV
Steve Southerland, II, FL            Jared Huffman, CA
Bill Flores, TX                      Raul Ruiz, CA
Jon Runyan, NJ                       Carol Shea-Porter, NH
Mark E. Amodei, NV                   Alan S. Lowenthal, CA
Markwayne Mullin, OK                 Joe Garcia, FL
Chris Stewart, UT                    Matt Cartwright, PA
Steve Daines, MT
Kevin Cramer, ND
Doug LaMalfa, CA
Vacancy

                       Todd Young, Chief of Staff
                Lisa Pittman, Chief Legislative Counsel
               Jeffrey Duncan, Democratic Staff Director
                David Watkins, Democratic Chief Counsel
                                 ------                                

              SUBCOMMITTEE ON FISHERIES, WILDLIFE, OCEANS
                          AND INSULAR AFFAIRS

                       JOHN FLEMING, LA, Chairman
    GREGORIO KILILI CAMACHO SABLAN, CNMI, Ranking Democratic Member

Don Young, AK                        Eni F. H. Faleomavaega, AS
Robert J. Wittman, VA                Frank Pallone, Jr., NJ
Glenn Thompson, PA                   Madeleine Z. Bordallo, GU
Jeff Duncan, SC                      Pedro R. Pierluisi, PR
Steve Southerland, II, FL            Carol Shea-Porter, NH
Bill Flores, TX                      Alan S. Lowenthal, CA
Jon Runyan, NJ                       Joe Garcia, FL
 Vacancy                             Edward J. Markey, MA, ex officio
Doc Hastings, WA, ex officio

                                ---------                              
                                CONTENTS
                                ----------                              
                                                                   Page

Hearing held on Thursday, May 16, 2013...........................     1

Statement of Members:
    Fleming, Hon. John, a Representative in Congress from the 
      State of Louisiana.........................................     1
        Prepared statement of....................................     2
    Sablan, Hon. Gregorio Kilili Camacho, Delegate in Congress 
      from the Territory of the Northern Mariana Islands.........     3
        Prepared statement of....................................     4

Statement of Witnesses:
    Asner, Marcus A., Partner, Arnold and Porter LLP.............    56
        Prepared statement of....................................    57
    Autor, Erik O., Esq., President and CEO, Total Spectrum LLC 
      and 
      Autor Global Strategies LLC................................    66
        Prepared statement of....................................    67
    Bech, Rebecca, Deputy Administrator, Animal and Plant Health 
      Inspection Service, U.S. Department of Agriculture.........     5
        Prepared statement of....................................     7
    French, Jameson S. ``Jamey'', President and CEO, 
      Northland Forest Products..................................    52
        Prepared statement of....................................    54
    Guertin, Stephen D., Deputy Director, U.S. Fish and Wildlife 
      Service, Department of the Interior........................    10
        Prepared statement of....................................    12
    Matthiesen, Birgit, Special Advisor to the President and CEO, 
      Canadian Manufactures and Exporters (CME)..................    47
        Prepared statement of....................................    49
    McCreary, Steve, General Manager, Collings Guitars, 
      Incorporated, National Association of Music Merchants......    40
        Prepared statement of....................................    42
    Snapp, Travis Reed, Managing Director, Benchmark 
      International, Chief Operating Officer, Benchmark Holdings, 
      International Wood Products Association....................    43
        Prepared statement of....................................    45

Additional materials supplied:
    American Forest and Paper Association, Statement submitted 
      for the record by Dr. Fleming..............................    78
    Environmental groups supporting the Lacey Act, Letter 
      submitted for the record by Mr. Lowenthal..................    22
    List of documents retained in the Committee's official files.    89
    National Wildlife Federation, Statement submitted for the 
      record.....................................................    86
    Truth Takes a Back Seat in Lacey Act Hearing, Huffington 
      Post, by Rep. Earl Blumenauer, Article submitted for the 
      record by Ms. Shea-Porter..................................    77
    U.S. Forest Products Industry, Letter submitted for the 
      record by Mr. Lowenthal....................................    21
    With Gibson Settlement, `Due Care' is Slightly More Clear, 
      Hardwood Floors Magazine, October/November 2012, by Marcus 
      Asner, Samuel Witten and Katherine Ghilain, Article 
      submitted for the record...................................    87
    World Wildlife Fund, Statement submitted for the record by 
      Dr. Fleming................................................    81
                                CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Wednesday, July 17, 2013.........................    91

Statement of Members:
    Fleming, Hon. John, a Representative in Congress from the 
      State of Louisiana.........................................    91
        Prepared statement of....................................    92
    Sablan, Hon. Gregorio Kilili Camacho, a Delegate in Congress 
      from the Territory of the Northern Mariana Islands.........    93
        Prepared statement of....................................    95

Statement of Witnesses:
    Alexander, Kristina, Legislative Attorney, American Law 
      Division, Congressional Research Service, Library of 
      Congress...................................................    96
        Prepared statement of....................................    98
    Asner, Marcus A., Arnold and Porter, LLP.....................   110
        Prepared statement of....................................   112
    Kamenar, Paul D., Esq., Attorney at Law......................   138
        Prepared statement of....................................   140
    Larkin, Paul J., Jr..........................................   128
        Prepared statement of....................................   130
    Rubinstein, Reed D., Esq., Partner, Dinsmore & Shohl, LLP, 
      for the U.S. Chamber of Commerce Institute for Legal Reform   120
        Prepared statement of....................................   122
    von Bismarck, Alexander, Executive Director, Environmental 
      Investigation Agency.......................................   100
        Prepared statement of....................................   102

Additional materials supplied:
    List of documents retained in the Committee's official files.   166
                                     

     OVERSIGHT HEARING ON ``THE 2008 LACEY ACT AMENDMENTS.'' PART 1

                              ----------                              

                         Thursday, May 16, 2013

                     U.S. House of Representatives

    Subcommittee on Fisheries, Wildlife, Oceans, and Insular Affairs

                     Committee on Natural Resources

                            Washington, D.C.

                              ----------                              

    The Subcommittee met, pursuant to notice, at 10:03 a.m., in 
Room 1324, Longworth House Office Building, Hon. John Fleming 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Fleming, Wittman, Thompson, 
Duncan, Sablan, Shea-Porter, Lowenthal, and Garcia.
    Also Present: Representative Harris.
    Dr. Fleming. The Subcommittee will come to order. The 
Chairman notes the presence of a quorum.

    STATEMENT OF THE HON. JOHN FLEMING, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF LOUISIANA

    Dr. Fleming. Good morning. Today I am holding what I hope 
will be the first in a series of hearings on various provisions 
of the Lacey Act. It is appropriate to start this oversight by 
closely examining the most significant--and some would say 
contentious--changes to this Act in almost 40 years.
    The expansion of the Lacey Act, to include all plant and 
plant products, was signed into law on May 22, 2008. The full 
House was never given the opportunity to debate or amend the 
2008 Lacey Act amendments. The language was added in the Senate 
as a fore-amendment to the 700-page 2008 farm bill. These 
provisions are costing millions of dollars in compliance costs 
and subjecting Americans to literally thousands of foreign 
laws, regulations, and decrees.
    It is now 5 years later, and it is time to examine whether 
this law has had its intended effect of reducing, if not 
stopping, the importation of illegally harvested timber and 
products made from such wood. It is also time to ask what is 
the benefit of having U.S. importers and small businesses fill 
out tens of thousands of plant and plant product declaration 
forms at a cost of hundreds of millions of dollars, when these 
forms are not shared, have not been used to initiate a single 
investigation, and not even being reviewed? There must be a 
better way to collect this information in a more effective 
manner.
    On panel one we have representatives from the Animal and 
Plant Health Inspection Service and the Fish and Wildlife 
Service. I am interested in finding out the status of the 
Section 8204 report on the cost of legal plant imports and the 
extent of illegal logging and trafficking, which was to be 
submitted to the Congress no later than November 22, 2010; 
whether the agencies plan to issue regulations affecting 
products manufactured prior to May 22, 2008, or containing a de 
minimis amount of Lacey Act products; and whether there are any 
ongoing efforts to establish and maintain a data base of 
foreign laws.
    On panel two I am looking forward for specific evidence--
not anecdotal examples, hearsay comments, or rumors--but proof 
that these amendments have stopped or at least reduced the 
amount of illegal wood entering the international market. In 
addition, I would like to find out about alternative 
information collection methods besides the declaration form 
which may be more cost-effective; whether the Federal 
Government should be required to establish and maintain a 
comprehensive list of foreign laws; what problems are created 
by an innocent owner defense; and what changes this Congress 
should consider to the 2008 amendments.
    At this time I am happy to welcome back to the Subcommittee 
the Ranking Minority Member from the Commonwealth of Northern 
Mariana Islands, Congressman Sablan, for any opening remarks or 
statements that he would like to make.
    [The prepared statement of Dr. Fleming follows:]

  Statement of The Honorable John Fleming, Chairman, Subcommittee on 
            Fisheries, Wildlife, Oceans and Insular Affairs

    Good morning, Today, I am holding what I hope will be the first in 
a series of hearings on various provisions of the Lacey Act. It is 
appropriate to start this oversight by closely examining the most 
significant and some would say contentious changes to this Act in 
almost forty years.
    The expansion of the Lacey Act to include all plant and plant 
products was signed into law on May 22, 2008. The full House was never 
given the opportunity to debate or amend the 2008 Lacey Act Amendments. 
The language was added in the Senate as a floor amendment to the 700-
page 2008 Farm Bill. These provisions are costing millions of dollars 
in compliance costs and subjecting Americans to literally thousands of 
foreign laws, regulations and decrees.
    It is now five years later and it is time to examine whether this 
law has had its intended effect of reducing, if not stopping, the 
importation of illegally harvested timber and products made from such 
wood.
    It is also time to ask what is the benefit of having U. S. 
importers and small businesses fill-out tens of thousands of Plant and 
Plant Product Declaration Forms at a cost of hundreds of millions of 
dollars, when these forms are not shared, have not been used to 
initiate a single investigation and not even being reviewed. There must 
a better way to collect this information in a more effective manner.
    On Panel 1, we have representatives from the Animal and Plant 
Health Inspection Service and the Fish and Wildlife Service. I am 
interested in finding out the status of the Section 8204 Report on the 
cost of legal plant imports and the extent of illegal logging and 
trafficking, which was to be submitted to the Congress no later than 
November 22, 2010; whether the agencies plan to issue regulations 
affecting products; manufactured prior to May 22, 2008 or containing a 
``de minimis'' amount of Lacey Act products and whether there are any 
ongoing efforts to establish and maintain a database of foreign laws.
    On Panel 2, I am looking for specific evidence--not anecdotal 
examples, hearsay comments or rumors--but proof that these amendments 
have stopped or at least reduced the amount of illegal wood entering 
the international market. In addition, I would like to find out about 
alternative information collection methods besides the declaration form 
which may be more cost effective; whether the federal government should 
be required to establish and maintain a comprehensive list of foreign 
laws; what problems are created by an innocent owner defense; and what 
changes this Congress consider to the 2008 Amendments.
    At this time, I am happy to welcome back to the Subcommittee, the 
Ranking Minority Member from the Commonwealth of the Northern Marina 
Island, Congressman Sablan for any opening statement he would like to 
make.
                                 ______
                                 

    STATEMENT OF THE HON. GREGORIO KILILI CAMACHO SABLAN, A 
DELEGATE IN CONGRESS FROM THE TERRITORY OF THE NORTHERN MARIANA 
                            ISLANDS

    Mr. Sablan. Well, thank you very much, Mr. Chairman. And I 
would like to welcome all of our witnesses and our guests this 
morning. Today we will discuss the Lacey Act, our most 
comprehensive Federal law to combat natural resources crime.
    The 112-year-old law is one of the most powerful 
protections we have for natural resources in the United States, 
and the most effective tool that we have for conserving 
important wildlife and habitat abroad. Majestic species like 
tigers, rhinos, elephants, and apes captivate the human 
imagination. Yet they face multiple threats around the world. 
Although these animals are not native to the United States, 
Americans have consistently supported measures protecting these 
iconic animals in their natural habitat.
    For example, grants from the multi-national Species 
Conservation Funds supplements the efforts of developing 
countries to control illegal poaching, reduce human-wildlife 
conflict, and protect essential habitat. While these grants 
play an integral part in species protection, the global trade 
in illegal wildlife is still estimated to be worth between $20 
and $25 billion, annually.
    Last Congress the Natural Resource Committee Majority 
pushed ill-conceived legislation that would have lowered Lacey 
Act penalties and taken firearms out of the hands of 
conservation police officers, clearing a path for organized 
crime syndicates to increase wildlife poaching and trafficking 
on the black market. The Committee's Majority also promoted a 
bill last Congress to roll back the important 2008 Lacey Act 
amendments that deal with plants and plant products. 
Fortunately, that legislation failed.
    I hope that today's hearing does not mark the beginning of 
another such effort to weaken this important law. Rather, this 
Subcommittee should be taking an honest look at the successes 
of the law and areas that need to be improved, including 
whether or not the Federal agencies with responsibility for the 
Lacey Act are getting the resources they need.
    It is clear that vulnerable wildlife species will not 
recover as long as their habitats continue to be destroyed. The 
2008 amendments to the Lacey Act address this deficiency by 
cracking down on the importation of illegally logged wood, 
where many of these species live.
    These provisions also protect people and their livelihoods. 
The loss of foreign resources have been found to directly 
affect the livelihood of 90 percent of the 1.2 billion people 
living in extreme poverty, worldwide.
    It is estimated that between 50 to 90 percent of all 
logging in key-producing tropical countries is illegal. 
Importantly, the Lacey Act helped reduce illegal logging by at 
least 22 percent globally, with reductions as high as 50 to 70 
percent in some key countries.
    Illegal logging also affects domestic jobs. Prior to 
passage of the 2008 amendments, timber industries in the United 
States were forced to compete with countries that illegally log 
in national parks, avoided duties and taxes, and paid little or 
nothing for raw materials. These unfair practices caused a 
domestic timber industry $1 billion a year, which directly 
translates to a decrease in American jobs. For that reason, a 
broad coalition of U.S. timber harvesters, manufacturers, 
retailers, musicians, and conservation groups combined their 
efforts to defend the Lacey Act last year.
    It is telling that the Lacey Act has been examined and 
unanimously agreed-upon by Congress on a bipartisan basis 
multiple times over the last 112 years. The Lacey Act is 
working to invigorate U.S. businesses and protect human rights 
and the environment around the world. The 2008 amendments level 
the playing field for U.S. timber, protect the private property 
rights of crime victims, and respect the laws of countries that 
have an interest in ensuring responsible and beneficial use of 
their natural resources, and they should remain part of the 
Lacey Act.
    Thank you very much, and I look forward to hearing from our 
witnesses.
    [The prepared statement of Mr. Sablan follows:]

  Statement of The Honorable Gregorio Kilili Camacho Sablan, Ranking 
Member, Subcommittee on Fisheries, Wildlife, Oceans and Insular Affairs

    Thank you, Mr. Chairman and welcome to all our guests.
    Today we will discuss the Lacey Act, our most comprehensive federal 
law to combat natural resources crime. This 112-year-old law is one of 
the most powerful protections we have for natural resources in the 
United States, and the most effective tool we have for conserving 
important wildlife and habitat abroad.
    Majestic species like tigers, rhinos, elephants and apes captivate 
the human imagination, yet they face multiple threats around the world. 
Although these animals are not native to the United States, Americans 
have consistently supported measures to invest in protecting these 
iconic animals in their natural habitat. For example, grants from the 
Multinational Species Conservation Funds supplements the efforts of 
developing countries to control illegal poaching, reduce human-wildlife 
conflict, and protect essential habitat. While these grants play an 
integral part in species protection, the global trade in illegal 
wildlife is still estimated to be worth between $5 and $20 billion 
annually.
    Last Congress, the Natural Resources Committee Majority pushed ill-
conceived legislation that would have lowered Lacey Act penalties and 
taken firearms out of the hands of conservation police officers, 
clearing a path for organized crime syndicates to increase wildlife 
poaching and trafficking on the black market. This Committee's Majority 
also promoted a bill last Congress to roll back the important 2008 
Lacey Act amendments that deal with plants and plant products. 
Fortunately that legislation failed. I hope that today's hearing does 
not mark the beginning of another such effort to weaken this important 
law. Rather, this subcommittee should be taking an honest look at the 
successes of the law and areas that need to be improved, including 
whether or not the federal agencies with responsibility for the Lacey 
Act are getting the resources they need.
    It is clear that vulnerable wildlife species will not recover as 
long as their habitats continue to be destroyed. The 2008 amendments to 
the Lacey Act addressed this deficiency by cracking down on the 
importation of illegally logged wood, thus protecting the forest 
ecosystems where many of these species live. These provisions also 
protect people and their livelihoods. The loss of forest resources has 
been found to directly affect the livelihood of 90 percent of the 1.2 
billion people living in extreme poverty worldwide. It is estimated 
that between 50 and 90 percent of all logging in key producing tropical 
countries is illegal. Importantly, the Lacey Act has helped reduce 
illegal logging by at least 22 percent globally, with reductions as 
high as 50 to 70 percent in some key countries.
    Illegal logging also affects domestic jobs. Prior to passage of the 
2008 amendments, timber interests in the United States were forced to 
compete with countries that illegally logged in national parks, avoided 
duties and taxes, and paid little or nothing for raw materials. These 
unfair practices cost the domestic timber industry a billion dollars a 
year, which directly translates into a decrease in American jobs. For 
that reason, a broad coalition of U.S. timber harvesters, 
manufacturers, retailers, musicians, and conservation groups combined 
their efforts to defend the Lacey Act last year.
    It is telling that the Lacey Act has been examined and unanimously 
agreed upon by Congress on a bipartisan basis multiple times over the 
last 112 years. The Lacey Act is working to invigorate U.S. businesses 
and protect human rights and the environment around the world. The 2008 
amendments level the playing field for U.S. timber, protect the private 
property rights of crime victims, and respect the laws of countries 
that have an interest in ensuring responsible and beneficial use of 
their natural resources, and they should remain part of the Lacey Act.
    Thank you and I look forward to hearing from our witnesses.
                                 ______
                                 
    Dr. Fleming. The gentleman yields his time. Thank you. 
Before we go to the panel, the Chairman asks unanimous consent 
that the gentleman from Maryland, Dr. Harris, be allowed to sit 
with the Subcommittee and participate in the hearing.
    [No response.]
    Dr. Fleming. Hearing no objection, so ordered.
    We will now hear from our first panel of witnesses, which 
includes Ms. Rebecca Bech, Deputy Administrator, Plant 
Protection Quarantine, Animal and Plant Health Inspection 
Service; and Mr. Stephen Guertin, Deputy Director of the U.S. 
Fish and Wildlife Service.
    Your testimony will appear in full in the hearing record, 
so I ask that you keep your oral statements to 5 minutes, as 
outlined in our invitation letter to you, and under Committee 
Rule 4(a).
    Our microphones are not automatic, so please press the 
button when you are ready to begin, and make sure that the tip 
is close to you so we can hear.
    Timing lights are very simple. You have 5 minutes. You are 
on the green light for 4 minutes. You will be under yellow 
light, caution light, for the last minute. And when it turns 
red, we ask that you please conclude your remarks.
    Ms. Bech, you are now recognized for 5 minutes to present 
your testimony of the Animal and Plant Health Inspection 
Service.

    STATEMENT OF REBECCA BECH, DEPUTY ADMINISTRATOR, PLANT 
 PROTECTION AND QUARANTINE, ANIMAL AND PLANT HEALTH INSPECTION 
            SERVICE, U.S. DEPARTMENT OF AGRICULTURE

    Ms. Bech. Yes, thank you. Dear Mr. Chairman and members of 
the Subcommittee, thank you for the opportunity to testify at 
today's hearing on implementation of the 2008 farm bill 
amendments of the Lacey Act. I am Rebecca Bech, Deputy 
Administrator of Plant Protection and Quarantine, a program 
within USDA's Animal and Plant Health Inspection Services.
    APHIS has a broad mission that includes protecting U.S. 
animal and plant health, administering the Animal Welfare Act, 
and carrying out wildlife damage management activities. APHIS's 
responsibilities were further broadened with the passage of the 
2008 farm bill, which amended the Lacey Act by expanding its 
protections to a broader range of plant and plant products.
    Over the past 5 years, our agency has focused on 
implementing our piece of the Lacey Act amendments, the 
Declaration Requirement, while continuously working with our 
stakeholders to carry out Congress's direction in a common-
sense way.
    Since we last testified before this Subcommittee 1 year 
ago, we have made progress on several regulatory and 
administrative fronts to further refine the requirements of the 
Act and ease the burden on industry, while enhancing our 
ability to collect and analyze declaration data. Our goal 
remains to implement the declaration requirement in a way which 
is consistent with the statutory requirements protective of the 
environment and natural resources, and manageable for the 
regulated community.
    Now, since 2009, APHIS has received approximately 1.8 
million import declarations, or about 40,000 per month. 
Estimates indicate the full enforcement of the Act would result 
in over 1 million import declarations per month. Given the 
scope, the inter-agency group has decided to phase in the 
enforcement of the declaration requirements, gradually adding 
categories of products to give affected industries and agencies 
time to comply and help ensure the legal trade would not be 
unintentionally or unnecessarily disrupted.
    To date we have implemented four phases for plant 
declarations, and will provide a minimum of 6 months' notice to 
the public before any other phases are implemented. APHIS has 
implemented the Lacey Act amendments and we have been faced 
with a number of challenges, particularly in regard to the 
scope of the provisions. We found that we can use existing 
regulatory and administrative flexibilities to deal with a 
number of these challenges.
    For example, APHIS has drafted a final rule defining common 
food crop and common cultivar, and intends to publish it in the 
near future. This will clarify the existing statutory exclusion 
and eliminate approximately 500,000 imports per month. 
Additionally, APHIS has initiated a rulemaking process to 
develop de minimis exclusions which would provide industry cost 
and time savings by eliminating the need for declarations of 
products comprised of minimal plant material. We published an 
advance notice of proposed rulemaking in June 2011, and we are 
using this feedback received through this process to move 
forward with rulemaking.
    To address the concerns raised regarding goods manufactured 
to the effective date of 2008, APHIS published guidance on 
declaring pre-amendment wood. And under this guidance, if 
importers of items manufactured entirely before the effective 
date are unable, through the exercise of due care, to determine 
the genus of the species of the plant materials contained in 
the item, the importer can then use a special designation pre-
amendment. We have also implemented other special use 
designations, and will continue to provide a way for the public 
to propose other special use designations.
    A new development I would like to mention is a web-based 
solution we call our LAWGS. It is the Lacey Act Web Government 
System. We are developing LAWGS to help eliminate the need for 
the paper-based declaration, and provide an electronic 
alternative for collecting and maintaining declarations. Having 
this IT structure will help the Agency analyze and monitor the 
declarations for compliance. To fund our Agency's 
implementation of the Act, we received $775,000 in 2012, the 
first time the Agency received appropriated funds. And in 2013, 
$716,000. We are requesting $1.445 million for 2014.
    Mr. Chairman, thank you for the opportunity to testify 
today. I assure you that APHIS will continue to implement the 
2008 amendments, balancing the legitimate needs of industry 
with the requirements of the Act. For this to be a successful 
effort, APHIS will continue its commitment to listening to the 
public, business, and industry, seeking their input, and 
implementing the Act in a way that addresses their concern in 
the best possible way, while still following the direction of 
Congress.
    I would be happy to answer any questions. Thank you.
    [The prepared statement of Ms. Bech follows:]

   Statement of Rebecca Bech, Deputy Administrator, Animal and Plant 
       Health Inspection Service, U.S. Department of Agriculture

    Dear Mr. Chairman and Members of the Subcommittee:
    Thank you for the opportunity to testify at today's hearing on 
implementation of the 2008 Farm Bill amendments to the Lacey Act. I am 
Rebecca Bech, Deputy Administrator of the Plant Protection and 
Quarantine Program within USDA's Animal and Plant Health Inspection 
Service (APHIS).
    APHIS has a broad mission that includes protecting U.S. animal and 
plant health, administering the Animal Welfare Act, and carrying out 
wildlife damage management activities. These efforts support the 
overall mission of USDA: to protect and promote food, agriculture, and 
natural resources. The Food, Conservation, and Energy Act of 2008, more 
commonly known as the 2008 Farm Bill, amended the Lacey Act (16 U.S.C. 
3371 et seq.) by expanding its protections to a broader range of plants 
and plant products (Section 8204, Prevention of Illegal Logging 
Practices) and requiring APHIS to implement the import declaration 
requirement for those products.
    The Administration is fully supportive of the 2008 amendments. Over 
the past five years, our Agency has focused on implementing our piece 
of the Lacey Act amendments--the declaration requirement--while 
continuously working with our stakeholders to carry out Congress' 
direction in a common sense way. Since we last testified before this 
Subcommittee one year ago, we have made progress on several regulatory 
and administrative fronts to further refine the requirements of the Act 
and to ease the potential burden on industry, while enhancing our 
ability to collect and analyze declaration data, all of which I will 
discuss in more detail. While our focus is on the declaration 
requirement, we are part of the broader Lacey Act interagency group 
tasked with implementing the provisions of the Act, which includes 
representatives from the U.S. Forest Service, U.S. Department of 
Homeland Security's Customs and Border Protection (CBP), U.S. Trade 
Representative, U.S. Department of Justice (DOJ), U.S. Department of 
State, U.S. Fish and Wildlife Service (FWS), the Council on 
Environmental Quality, and the U.S. Department of Commerce.
APHIS' Implementation of the Declaration Requirement--A Phased-In 
        Approach
    In implementing the amendments, it was important that we take into 
account the large and diverse quantity and value of imported products 
that require a declaration under the Lacey Act; goods containing plant 
material are included in at least 59 of the 99 chapters of the 
Harmonized Tariff Schedule of the United States (HTS), encompassing an 
estimated 5,000 types of goods. Additionally, estimates indicate that 
full enforcement of the Act would result in over 1 million import 
declarations per month. Given this scope, the interagency group decided 
to phase in enforcement of the declaration requirement, gradually 
adding categories of products that require a declaration, to give 
affected industries and agencies time to comply and to help ensure that 
legal trade would not be unintentionally or unnecessarily disrupted.
    To date, APHIS has implemented four phases for plant declarations, 
encompassing 447 HTS codes. The interagency group identified categories 
of goods to be included in each of these phases that were relatively 
less complex goods for which the required declaration information 
should be more readily available.
    APHIS introduced the latest phase of the implementation schedule in 
April 2010. Since that time, the Agency has focused on soliciting input 
from the public on ways to improve the administration of the 2008 
amendments, development of the common food crop and common cultivar 
rule, the analysis and working towards the completion of the required 
report to Congress, as well as discussions on how to deal with the 
administrative challenges of implementing the Act. While APHIS has not 
yet announced additional phases as part of the implementation process, 
the Agency has had interdepartmental discussions about what types of 
additional products and corresponding HTS codes could be included in 
the next phase of enforcement that meet the goals of the Act while 
presenting the least potential burden on legitimate trade and the 
Agency. Consistent with a Notice APHIS published on February 3, 2009 in 
the Federal Register, the Agency still commits to provide a minimum of 
six months' notice before further phases are implemented.
Using Regulatory and Administrative Flexibilities to Refine the 
        Requirements
    As APHIS has implemented the Lacey Act amendments, we have been 
faced with a number of challenges, particularly in regard to the scope 
of the provisions. While the Act directs us to provide legislative 
recommendations to Congress to assist in the identification of plants 
imported in violation of the amendments, we have found that we can use 
existing regulatory and administrative flexibilities to deal with a 
number of the challenges we have encountered.
    On the regulatory front, APHIS is moving forward with two 
regulations to further refine the requirements of the Lacey Act 
amendments. First, the Agency plans to complete the rule defining 
``common food crop'' and ``common cultivar,'' which will greatly 
benefit industry, by clarifying the existing statutory exclusions and 
excluding large numbers of products from the declaration requirement. 
Common food crops would include plant material, such as fruits, 
vegetables, and grains. Common cultivars would include plant material, 
such as cotton. Any plant material imported into the United States that 
falls under either definition would not be considered a ``plant'' under 
the Lacey Act, and would not be subject to the requirements of the Act. 
On August 4, 2010, APHIS published a proposed rule in the Federal 
Register to establish definitions for these terms, and later extended 
the comment period at the request of stakeholders. Under the proposed 
rule, these exclusions would cover approximately 500,000 imports per 
month. APHIS has drafted a final rule and intends to publish it in the 
near future to provide greater clarity to regulated entities.
    Second, APHIS has initiated the rulemaking process to develop de 
minimis exclusions, which would provide industry cost and time savings 
by eliminating the need for declarations of products comprising of 
minimal plant material. In June 2011, the Agency published an Advance 
Notice of Proposed Rulemaking soliciting input on such an exception, 
particularly in regard to developing a de minimis standard for the 
amount of plant material that must be present in a product for the 
declaration requirement to apply. We are using the feedback received 
through this process as we move forward with rulemaking.
    Administratively, APHIS has been able to streamline data 
requirements for the declaration form and address concerns about the 
resulting costs to industry to provide that information. The Agency has 
implemented Special Use Designations (SUD) to help importers expedite 
their reporting of various wood products. For example, APHIS has made a 
SUD available for one type of common trade grouping, Spruce Pine Fir 
(SPF), an acceptable industry short-hand that signifies a larger group 
of species that may otherwise be difficult to differentiate from one 
another. Additionally, we have developed SUDs for importers of other 
plant products, such as products containing composite, recycled, or 
reused plant materials. Given the positive feedback we have received on 
this initiative, APHIS has now implemented a formal process for 
stakeholders to propose special use designations for other species 
groupings, and is currently reviewing recommended suggestions for 
possible inclusion.
    Another area of interest has been goods manufactured prior to the 
effective date of the 2008 amendments. APHIS has published guidance on 
these goods, consistent with comments received through the June 30, 
2011, Advance Notice of Proposed Rulemaking that included a section on 
declaring pre-Amendment wood. Under this guidance, if importers of 
items manufactured entirely prior to May 22, 2008, are unable through 
the exercise of due care to determine the genus or species of the plant 
materials contained in that item, the importer can use the SUD 
``PreAmendment.'' In addition, we are working with other interagency 
group members to explore other possible policies to address such plant 
products manufactured prior to 2008.
Improving Data Collection and Use
    Since 2009, APHIS has received approximately 1.8 million import 
declarations. Of this total, approximately 40,000 declarations are 
filed per month, and approximately 15 percent of these declarations are 
submitted on paper forms that require significant resources to analyze 
and store securely. Prior to fiscal year 2012, APHIS had not received 
funding specific to the implementation of the Lacey Act; however, we 
are now able to dedicate resources to address the administrative 
challenge of paper declarations. The Agency is developing a web-based 
solution to help eliminate the need for paper-based declarations and 
provide an easier electronic alternative for collecting and maintaining 
declarations. The system, Lacey Act Web Governance System, or LAWGS, 
will provide another alternative to importers for filing declarations 
(as importers currently go through a licensed customs broker or fill 
out a paper declaration) and allow APHIS to be more responsive to 
importers' needs. In addition, an information technology infrastructure 
will help the agency to analyze and monitor these declarations for 
compliance with the Act. We have completed Phase 1 development of LAWGS 
and conducted our first webinar for industry on its use in March 2013. 
We anticipate piloting the system this summer before full 
implementation this fall.
    Additionally, APHIS continues to work with U.S. Customs and Border 
Protection (CBP) on improvements to data transmission by importers into 
CBP systems. APHIS and CBP are collaborating to strengthen the guidance 
and streamline the process importers need to file Lacey Act declaration 
information in CBP's electronic system for Participating Government 
Agencies (PGA's). The PGA Message Set is a single, harmonized set of 
importer information collected by CBP as part of Customs and Trade 
Automated Interface Requirements.
    APHIS has also acquired new software to improve the Agency's 
ability to monitor and analyze Lacey Act data from the import 
declarations. When the system is fully operational, the Agency will be 
able to create sets of reports to aid in accountability and to perform 
regular compliance checks of the data. It will allow the Agency to 
easily target problem shipments and repeat offenders, helping to ensure 
compliance with the 2008 amendments. It is important to clarify that 
APHIS' enforcement role only pertains to the declaration requirement. 
When we notice errors or discrepancies on the declaration forms, we 
work with importers to educate them about how to comply with the Act. 
However, APHIS makes declaration forms available to the enforcement 
agencies should they be needed for investigations. DOJ requested and 
APHIS provided full electronic declaration data available during 2009-
2011. More recently, DOJ, FWS, and CBP enforcement officials requested 
and APHIS coordinated the delivery of information related to almost 
3,000 electronic Lacey Act declarations in support of their 
investigations.
Outreach and Collaboration
    Since the enactment of the 2008 amendments, the U.S. Government has 
undertaken substantial public outreach efforts, both domestically and 
internationally, to inform and educate importers, producers, suppliers, 
and foreign governments on the requirements of the Lacey Act. APHIS 
leads Lacey Act outreach efforts in the United States. Serving as the 
public's primary point of contact on the Lacey Act, APHIS:

      Maintains a dedicated Web site (http://
www.aphis.usda.gov/plant_health/lacey_act/), which contains extensive 
Lacey Act materials and updated guidance on how to comply.
      Answers dozens of telephone and email inquiries monthly 
from members of the public seeking guidance on the Lacey Act.
      Along with its federal partners, meets with and educates 
industry trade groups, professional forestry organizations, non-
governmental organizations, legal professionals, companies, other U.S. 
Government agencies, and foreign government officials and industry 
officials.
      Developed a Lacey Act primer to educate importers on 
APHIS' role in implementation of the Act, and provided it to industry 
and on our Web site.

    We also recognize the critical role that the public and industry 
have in informing the process as we continue implementation of the 
Lacey Act amendments. Throughout implementation, APHIS has actively 
solicited comments from the public on how best to administer the 
program to balance the needs of businesses and industry with the need 
to meet the goals of the Act and implement the statutory requirements. 
For example, several times, APHIS adjusted the phased enforcement 
schedule to address concerns raised by businesses and industry 
associations. Beyond that, APHIS, in its Federal Register notices, has 
solicited comments on other issues related to Lacey Act implementation. 
For example, the special use designations discussed above resulted in 
part from a recommendation that APHIS develop a list of shorthand 
designations that would satisfy the genus and species requirement. Many 
stakeholders also raised the need for a de minimis exemption to the 
declaration requirement, which, as was previously mentioned, we are 
addressing. APHIS has also heard regularly from luthiers who 
manufacture artisan stringed instruments using stores of tropical 
hardwoods that were imported before the 2008 amendments, and we have 
provided guidance to clarify requirements and address their concerns.
    APHIS again sought public comment through a notice in the Federal 
Register on February 28, 2011, consistent with the requirement in the 
2008 amendments that the Secretary provide public notice and an 
opportunity for comment before conducting a review of implementation of 
the amendments. The comments received in response to that notice, as 
well as comments received in response to earlier Federal Register 
notices relating to the implementation of the 2008 amendments, have 
been taken into account in the preparation of the Act's required report 
to Congress. I apologize for the delays in completing this report and 
providing it to your Committee. As we have developed the report, we 
felt it was important that it reflect input received from stakeholders 
and the other Federal agencies interested in the 2008 amendments, and 
that process has taken some time.
Cost of Implementation
    As part of the rulemaking process for the common food crop and 
common cultivar rule, the Agency developed an economic analysis that 
included the estimated cost of compliance of the declaration 
requirement. Our economic analysis estimates that these exemptions 
could save industry and the government between $900,000 and $2.8 
million per year just for the five percent of products that is 
excluded.
    To fund our Agency's implementation of the Lacey Act, APHIS 
received $775,000 in FY 2012--the first time the Agency received 
appropriated money for the program. In FY 2013, the Agency received 
$716,000 and we are requesting $1.445 million for FY 2014. This funding 
has been and will be used for full-time staff, recordkeeping and secure 
storage for paper declarations, education and outreach, and continued 
development of the LAWGS database and other tools.
    Mr. Chairman, thank you for the opportunity to testify today. I 
assure you that APHIS will continue to implement the 2008 amendments 
balancing the legitimate needs of industry with the requirements of the 
Act. For this to be a successful effort, APHIS will continue its 
commitment to listening to the public, business and industry, seeking 
their input and implementing the Act in a way that addresses their 
concerns in the best possible way, while still following the direction 
of Congress.
                                 ______
                                 
    Dr. Fleming. Thank you, Ms. Bech.
    And now, Mr. Guertin, you have 5 minutes.

STATEMENT OF STEPHEN D. GUERTIN, DEPUTY DIRECTOR, U.S. FISH AND 
                        WILDLIFE SERVICE

    Mr. Guertin. Good morning, Chairman Fleming, Ranking Member 
Sablan, and members of the Subcommittee. I am Steve Guertin, 
Deputy Director of the U.S. Fish and Wildlife Service. Thank 
you for the opportunity to testify before the Subcommittee 
today.
    The Lacey Act prohibits trafficking in illegally taken 
fish, wildlife, and plants. Its premise is simple, but 
effective. People who take wildlife in violation of a State, 
Federal, tribal, or foreign law, and then engage in interstate 
commerce with the wildlife, are violating Federal law.
    The Lacey Act provides a deterrent to wildlife trafficking 
through criminal penalties. It gives law enforcement officers 
the tools to conduct investigations, make arrests, and protect 
themselves from criminals. The service is one of the lead 
Federal agencies for enforcing the Lacey Act. Our law 
enforcement agents' efforts to stop wildlife smuggling put them 
against organized criminal networks conducting high-profile, 
black-market----
    Dr. Fleming. Mr. Guertin, would you suspend for a moment? 
Would you pull that microphone closer? We have some bagpipes in 
the background, which I really enjoy, but unfortunately, I 
can't fully hear what you are saying.
    Thank you. Go ahead.
    Mr. Guertin. Thank you, Chairman. I never testified with 
theme music before, either.
    However, the Service's 216 special agents work on over 
13,000 investigations each year involving complex crimes that 
target highly endangered species such as elephants, rhinos, 
tigers, and sea turtles, as well as domestic species managed by 
States, such as bears, turtles, and paddlefish. We also have 
136 wildlife inspectors who are our front-line defenders in 
combating illegal trade in wildlife and wildlife products.
    Congress has amended the Lacey Act many times since 1900. 
In 2008, stronger protections were added for plants, notably 
timber. Simply put, the plant amendments will bring plants 
under the same standards as all wildlife species that have been 
protected by the Lacey Act for over the last 100 years. The 
2008 plant amendments were supported by a broad coalition of 
trade associations, environmental organizations, and unions. 
The Service is working with our Federal partners to implement 
the 2008 plant amendments. These amendments provide relatively 
new statutory authority, and agencies are working on their 
implementation.
    The declaration requirement is being implemented in phases, 
in order to minimize any undue effects on trade in illegal wood 
products. The Service is currently working with APHIS to 
finalize a rule to define the terms ``common cultivar'' and 
``common food crop,'' which are exempt from Lacey Act plant 
requirements.
    Providing clear definitions for these terms will facilitate 
continued legal trade in these plant species. The 
Administration is exploring other possible policies to address 
plant products manufactured prior to 2008. APHIS has provided 
almost 3,000 declarations to the Service, Customs, and Border 
Protection, and the Department of Justice, in support of 
enforcement Agency investigations.
    Service special agencies are currently pursuing three 
investigations of potential violations of the 2008 plant 
amendments. A recent case involving a domestic guitar 
manufacturer ended last August with a criminal enforcement 
agreement in which the firm accepted responsibility for illegal 
actions.
    Congress can improve the 2008 plant amendments by making 
sure that the agencies tasked to enforce them have the 
resources to do so. The Service cannot fully allocate the 
resources needed to pursue the international organized crime we 
know to exist in this arena without pulling resources from 
other enforcement responsibilities. The number of Service law 
enforcement officers has remained essentially the same since 
1978. Due to sequestration, we are not able to hire a new class 
of 24 law enforcement officers in Fiscal Year 2013.
    In contrast, illegal trade has grown in sophistication. The 
global economy for wildlife products has expanded. And new law 
enforcement mandates have been enacted. Congress can also 
strengthen the Service's position to address trans-national 
wildlife and timber trafficking by supporting our plans to 
station senior special agent international attaches in key 
regions overseas, including Asia, Africa, and South America.
    Wildlife trafficking is increasing, becoming a 
transnational crime involving illicit activities in two or more 
countries and often two or more global regions. Cooperation 
between nations is essential to combat this crime. The 2008 
Lacey Act amendments were a significant environmental 
accomplishment.
    We appreciate your Subcommittee holding this hearing to 
learn about the progress being made to implement the plant 
amendments and to evaluate their effectiveness. We look forward 
to continuing to work with the Subcommittee on this issue, and 
we would be pleased to answer any further questions you or the 
Members may have. Thank you.
    [The prepared statement of Mr. Guertin follows:]

    Statement of Stephen D. Guertin, Deputy Director, U.S. Fish and 
              Wildlife Service, Department of the Interior

    Good morning Chairman Fleming, Ranking Member Sablan, and Members 
of the Subcommittee. I am Stephen Guertin, Deputy Director for the U.S. 
Fish and Wildlife Service (Service), in the Department of the Interior 
(Department). I appreciate the opportunity to testify before you today 
to provide an update on implementation of the 2008 plant amendments to 
the Lacey Act. Simply put, the plant amendments bring plants under the 
same standards as all wildlife species that have been protected by the 
Lacey Act for the last hundred years.
    The Service is one of the lead federal agencies for enforcing the 
Lacey Act (16 U.S.C. Sec. Sec. 3371-3378), a long-standing law that 
prohibits trafficking in illegally taken fish, wildlife, and plants. 
The Service also enforces many other U.S. laws that protect wildlife, 
including the Endangered Species Act, the Marine Mammal Protection Act, 
and the Migratory Bird Treaty Act. The Lacey Act complements and 
strengthens our ability to enforce these and other statutes. The Lacey 
Act also strengthens our ability to enforce the provisions of the 
Convention on International Trade in Endangered Species of Wild Fauna 
and Flora (CITES), an international treaty signed by 178 countries, 
including the United States, to prevent species from becoming 
endangered or extinct because of unregulated international trade.
    The Service's 216 special agents work on some 13,000 investigations 
each year involving complex, high-impact wildlife crimes. These 
wildlife crimes include highly endangered species such as elephants, 
rhinos, tigers, and sea turtles; rainforests in the tropics; wildlife 
habitat in the United States; and native species like bears, ginseng, 
turtles, and paddlefish that are poached in violation of state laws. 
Our agents' efforts to stop wildlife smuggling pit them against 
transnational organized networks and criminals conducting high-profit, 
black market trade valued in the billions of dollars. Our agents are 
responsible for covering the nearly four million square miles of land 
that make up this country. They are an extraordinary group of public 
servants focused on combating illegal taking and trafficking of 
wildlife, plants and wildlife and plant products in the United States.
    We have 136 wildlife inspectors stationed at 38 of the more than 
400 U.S. Customs ports of entry throughout the country. Last year they 
processed approximately 187,000 declared shipments of wildlife and 
wildlife products worth more than $4.4 billion, supporting jobs and 
economic development for businesses large and small. Wildlife 
inspectors are also our front line defenders in combating illegal trade 
in wildlife and wildlife products. They utilize the Lacey Act to help 
stop the import of injurious species that could devastate our native 
ecosystems and industries if illegally imported or smuggled into the 
country.
    The Service also employs 393 Federal Wildlife Officers who serve as 
the uniformed police force and conservation officers for the 561 
National Wildlife Refuges and 38 Wetland Management Districts in the 
United States and territories, comprising approximately 150 million 
acres of the National Wildlife Refuge System (NWRS). They also 
regularly conduct enforcement operations off of NWRS lands enforcing 
the provisions of the Migratory Bird Treaty Act. These officers perform 
the full range of law enforcement duties, including patrols, 
surveillance, investigations, apprehensions, participation in raids, 
detentions, seizures and arrests, and interaction with the judicial 
system. In addition to the Service, each of the land managing agencies 
within the Department including the National Park Service, Bureau of 
Land Management, Bureau of Reclamation and the Bureau of Indian Affairs 
enforce the Lacey Act across hundreds of millions of acres of public 
and tribal lands.
    These agents and officers depend on the Lacey Act to do their work. 
The Lacey Act is the single most effective law to protect wildlife and 
plants available in the United States. Its prohibitions protect animal 
and plant resources from rapacious exploitation here and around the 
world. Its penalties make prison sentences and significant fines a real 
possibility for hard-core profiteers; reduce financial incentives for 
wildlife and plant trafficking; and provide real deterrents for 
wildlife crime. Notably, the Lacey Act also supports those businesses 
that engage in legitimate wildlife and plant trade here and abroad by 
ensuring a level playing field and helping to secure the continued 
commercial availability of natural resources needed by U.S. businesses 
by supporting domestic and foreign conservation laws. The Lacey Act 
shows that our Nation's commitment to wildlife and plant conservation 
goes beyond words to encompass action. This law equips law enforcement 
officers with the tools they need to conduct investigations and bring 
criminals to justice, while leveling the playing field for businesses 
that follow the rules.
Historical Background
    The Lacey Act was the Nation's first federal wildlife protection 
law. Its passage in 1900 was prompted by growing concern about 
interstate profiteering in illegally taken game species and the impact 
of that trafficking on states and their wildlife resources.
    The original law made it illegal to transport from one state or 
territory to another wild animals or birds killed in violation of state 
or territorial law. According to the House Committee Report from the 
56th Congress, its ``most important purpose'' was ``to supplement the 
state laws for the protection of game and birds.'' It also banned the 
importation of injurious wildlife that threatened crop production and 
horticulture in this country. In its original version, the Lacey Act 
focused on helping states protect their resident wildlife.
    Congress expanded the Lacey Act through amendments several times 
during the law's first century. One of the most significant of these 
amendments occurred in 1935, when Congress extended the Lacey Act's 
prohibitions on interstate commerce to include wildlife and birds taken 
in violation of federal or foreign law.
    Amendments enacted in 1981 expanded the scope of the statute to: 
include certain unlawfully harvested fish; increase penalties for 
trafficking; strengthen tools for enforcement; apply prohibitions on 
interstate and international trafficking to any type of wild animal; 
and extend protection to certain wild plants. The 1981 amendments also 
added tribal laws and U.S. treaties to the list of underlying laws 
upheld; incorporated strict liability forfeiture provisions consistent 
with other resource laws; and established criminal felony liability for 
those buying or selling protected specimens of fish or wildlife that 
they knew had been taken and transported in violation of an underlying 
law.
2008 Plant Amendments
    The most recent amendments to the Lacey Act were passed by Congress 
and signed into law on June 18, 2008, as part of the Food, 
Conservation, and Energy Act of 2008 (Pub. L. 110-246). They expanded 
the definition of plants covered by the Act, and similarly expanded and 
clarified the predicate violations that could trigger the Lacey Act.
    Under the 2008 amendments, it is unlawful to import, export, sell, 
receive, acquire or purchase in interstate or foreign commerce any 
plant that was taken in violation of a federal, state, tribal or 
foreign conservation law. The statute specifies that the underlying 
laws that trigger a plant trafficking violation include laws and 
regulations that:

      Protect the plant;
      Regulate the (i) theft of plants, (ii) taking of plants 
from a park, forest reserve, or other officially protected area, (iii) 
taking of plants from an officially designated area, or (iv) the taking 
of plants without, or contrary to, required authorization;
      Require the payment of royalties, taxes or stumpage fees 
for the taking, possession, transportation or sale of any plant; and
      Govern the export or transshipment of plants.

    The amendments were supported by the Bush Administration as part of 
its Presidential Initiative against Illegal Logging. The initiative 
responded to widespread concerns about the environmental and economic 
impacts of illegal logging. Both Republicans and Democrats supported 
the amendments as a way to protect jobs from unfair and illegal logging 
practices.
    The Lacey Act plant amendments were supported by more than 50 trade 
associations, non-profits, and unions, representing the entire range of 
stakeholders, as well as members of both parties in Congress. This 
broad support was driven by concerns that illegal logging has a 
negative impact on biodiversity, indigenous peoples, the global 
climate, and on U.S. businesses that operate by the rules.
    In particular, the law received strong support from the U.S. forest 
products industry. The 2008 amendments help ensure that all businesses, 
including foreign companies that send their goods into this country, 
are operating on a level playing field.
    The amendments equipped the United States with tools for addressing 
timber trafficking and discouraging illegal logging. They provided a 
new definition of the term ``plant'' making it clear that (with some 
limited exceptions) the prohibitions apply to plant products as well as 
whole plants. Specifically, the term ``plant'' was defined as ``any 
wild member of a plant kingdom, including roots, seeds, parts, or 
products thereof, and including trees from either natural or planted 
forest stands.'' The inclusion of ``products'' parallels wildlife 
provisions in the Lacey Act, which cover not only live fish and 
wildlife, but also products made from them.
    The amendments also added a declaration requirement for plant 
products. This mandate is similar to the requirement for the 
declaration of wildlife imports and exports established by the 
Endangered Species Act, which also applies to all wildlife and wildlife 
products, whether protected under a specific conservation law or not.
    The U.S. Department of Agriculture's Animal and Plant Health 
Inspection Service (APHIS), operating within available funding, has 
implemented and enforced the amendments with respect to the declaration 
process. As in the past, the Fish and Wildlife Service remains 
responsible for conducting criminal investigations of Lacey Act 
violations, including those authorized by the plant amendments. While 
APHIS has long had a role in implementing CITES requirements for plant 
trade, the agency was assigned new responsibilities with respect to 
developing and implementing a declaration system and collecting and 
maintaining the resulting plant import data.
Importance of the Lacey Act
    Today the Lacey Act makes it unlawful to traffic in fish, wildlife, 
or plants taken, possessed, transported, or sold in violation of 
federal, state, foreign, or tribal conservation law, treaty, or 
regulation. It allows the United States to help states, Tribes, and 
countries worldwide protect their natural resources by discouraging a 
U.S. market and U.S. demand for illegally obtained plants and wildlife. 
The law is a critical cornerstone for resource protection and 
conservation law enforcement.
    Under the Lacey Act, Service law enforcement agents expose illegal 
guiding operations (i.e., guided hunting trips) profiteering in state, 
tribal, and federally protected species and pursue cases involving the 
illegal large-scale commercial exploitation of wildlife and plant 
resources in violation of state, tribal, or federal law. The Lacey Act 
provides a unique mechanism for states and Tribes to address crimes 
within their borders by out-of-state or non-tribal guides and hunters 
as well as the interstate sale or international export of unlawfully 
acquired U.S. wildlife or plants. Such sales fuel the market for 
certain species, putting domestic wildlife and plant populations 
increasingly at risk. Illegal commercialization of wildlife is a real 
and present threat to conservation.
    On the international front, the Lacey Act provides an essential 
tool for combating large-scale exploitation of natural resources in 
developing nations and the subsequent smuggling and interstate commerce 
in foreign and shared species protected and regulated under federal 
laws, international treaties such as CITES, and the conservation laws 
of other countries. Its provisions give the Justice Department access 
to powerful enforcement tools which enable the Department to bring 
charges against international organized crime rings and criminals who 
knowingly and deliberately traffic in the world's most imperiled 
species and in its most important natural resources, such as fisheries 
and timber. Trafficking in illegally harvested wood, for example, is 
estimated to generate proceeds of approximately $10 billion to $15 
billion annually worldwide, according to a 2012 report by the World 
Bank.
    The existence and enforcement of the Lacey Act's foreign law 
provisions have made the United States a leader and role model for 
countries around the world--particularly those that, like the United 
States, have long been major markets for wildlife and plant resources 
illegally taken in developing countries that struggle to feed their 
people, let alone protect their wildlife, plants, and forests. Through 
these provisions, our Nation holds itself accountable for stopping 
illegal trade in natural resources involving interests in our country, 
and recognizes and supports the efforts of other countries to level the 
playing field for legitimate businesses who manage their natural 
resources responsibly.
Implementation of the 2008 Plant Amendments
    In terms of implementing the 2008 plant amendments, the declaration 
requirement is being enforced in phases so as to minimize any potential 
undue effects on trade in legal wood products. The Service is currently 
working with APHIS to finalize a rule to define the terms ``common 
cultivar'' and ``common food crop'', which are excluded from Lacey Act 
plant requirements. Providing clear definitions of these terms will 
facilitate continued legal trade in these plant species. The Service is 
also working with other interagency group members to explore other 
possible policies to address plant products manufactured prior to 2008.
    APHIS makes Lacey Act plant import declarations available to the 
Service, Customs and Border Protection, and the Department of Justice, 
upon written request, should they be needed for investigations. APHIS 
has provided almost 3,000 declarations pursuant to the 2008 plant 
amendments to the Service, Customs and Border Protection, and the 
Department of Justice in support of the enforcement agencies' 
investigations.
    Service special agents are currently pursuing three investigations 
of potential violations of the 2008 plant amendments. A recent case 
involving the Gibson Guitar Company ended last July with a criminal 
enforcement agreement. In the agreement, the firm accepted 
responsibility for continuing to purchase rare wood from Madgascar 
after Madagascar had banned the sale and export of such wood. Gibson 
agreed to over $600,000 in penalties including the forfeiture of wood 
imported after implementation of the ban.
    The Service has not conducted a comprehensive review of the effect 
of the 2008 plant amendments; however, we strongly support this law, 
which, in 2011, has been cited by United Nations Agencies and the World 
Future Council as one of the world's top three forest conservation laws 
in 2011. Congress can improve the 2008 plant amendments by making sure 
that the agencies tasked to enforce them have the resources to do so. 
The Service cannot fully allocate the resources needed to pursue the 
transnational organized crime we know to exist in this arena without 
pulling resources from other enforcement responsibilities. The number 
of Service law enforcement officers has remained essentially the same 
since 1978. Due to sequestration, the Service was not able to hire a 
new class of 24 law enforcement officers in fiscal year 2013. In 
contrast, illegal trade has grown in sophistication, the global economy 
for wildlife products has expanded, and new law enforcement mandates 
have been enacted.
    Congress can also strengthen the Service's position to address 
transnational wildlife and timber trafficking by supporting our plans, 
as identified in the President's fiscal year 2014 Budget, to station 
senior special agent international attaches in key regions overseas 
(including Africa, Asia, and South America) and by working with the 
Service to make needed adjustments in laws so that it can be fully 
utilized in the investigation and prosecution of international criminal 
syndicates. The Service budget request for fiscal year 2014 provides 
$68.3 million for the law enforcement program to investigate wildlife 
crimes and enforce the laws that govern the Nation's wildlife trade. 
Wildlife trafficking is increasingly a transnational crime involving 
illicit activities in two or more countries and often two or more 
global regions. Cooperation between nations is essential to combat this 
crime. Investigations of transnational crime are inherently difficult, 
and they become even more so without organizational structures to 
facilitate this cooperation. This request of $6.1 million above the 
2012 appropriation also includes funding to foster these needed 
partnerships to address technical challenges in the science of wildlife 
forensics.
    The 2008 Lacey Act plant amendments were a significant 
environmental accomplishment. We urge Congress to support continued 
implementation of this law and to ensure that the United States remains 
a leader in the global effort to save forests and protect the planet 
and its people.
Conclusion
    I would like to thank the Subcommittee for your continued support 
for the conservation and protection of fish, wildlife, and plants 
throughout the world. Thank you for the opportunity to present 
testimony on the 2008 plant amendments to the Lacey Act. I would be 
pleased to answer any questions that you may have.
                                 ______
                                 
    Dr. Fleming. OK. Thank you, Mr. Guertin. At this point we 
will begin Member questioning of the witnesses. To allow all 
Members to participate, and to ensure we can hear from all our 
witnesses today, Members are limited to 5 minutes for their 
questions. However, if Members have additional questions, we 
can have more than one round of questioning. I now recognize 
myself for 5 minutes.
    My first question--and this is for both panel members--is 
what is your definition of legal logging? Yes, go ahead, Mr. 
Guertin.
    Mr. Guertin. Mr. Chairman, your question is what is my 
definition of legal and----
    Dr. Fleming. Yes.
    Mr. Guertin. And I assume you relate this to legal and 
lawful take of wildlife, plant, or animal species, as we are 
talking about here today?
    Dr. Fleming. Yes.
    Mr. Guertin. Yes. It would be in accordance with the rules 
and regulations and the laws enforced here in the U.S., and 
also those of the international community.
    Dr. Fleming. OK. Ms. Bech?
    Ms. Bech. I would defer to the definition that he just 
gave. We concur with that.
    Dr. Fleming. OK. Again, for the panel, can a wood product 
be sustainable and illegal?
    Mr. Guertin. Mr. Chairman, your question was can a wood 
product be sustainable and legal?
    Dr. Fleming. Yes.
    Mr. Guertin. Yes, sir. It can.
    Dr. Fleming. OK. You agree with that, Ms. Bech?
    Ms. Bech. Yes, sir.
    Dr. Fleming. OK. All right. It is now 2\1/2\ years since 
the Animal and Plant Health Inspection Service was required to 
submit a report to the Congress characterizing the cost of 
legal plant imports and the extent of illegal logging practices 
and trafficking. Can you tell me what is the status of this?
    Ms. Bech. Yes, sir. I apologize for the delay in completing 
this report and providing it to your Committee. We felt like, 
in developing the report, it was important to reflect input 
received from the stakeholders and the other Federal agencies, 
and this has taken some time. We were hoping to have the report 
ready today, but I am happy to say that we will be providing 
the report to you within the next week.
    Dr. Fleming. OK, thank you. Since APHIS has finished its 
analysis, what can you share with us in terms of illegal 
logging practices and trafficking?
    Ms. Bech. Well, our piece of the responsibility in 
implementing the Lacey Act is focused on just the declarations. 
And we have done some monitoring of the declarations and looked 
at the errors in that. The report, however, focuses on the work 
that we have done to complete the declarations. And I would 
defer, then, to my colleague to see if he has any comment on 
the illegal practice of logging.
    Dr. Fleming. When you review the declarations, are you just 
reviewing them to ensure accuracy, or to see if it complies 
with the law?
    Ms. Bech. Yes, sir. We are looking at them for any errors, 
and to ensure that they are complying with the declaration. We 
have referred some declarations that we found to be problematic 
to DOJ and the Fish and Wildlife Service. To date, though, we 
have done very minimal monitoring. We have had limited 
resources. And so we focused initially on helping to educate 
and provide outreach, so that people can comply with the 
declaration, and that has been our focus.
    Dr. Fleming. OK. So the focus--and I am not saying this is 
inappropriate--is on accuracy. If you come across issues that 
may suggest problems, you refer that.
    Ms. Bech. Yes, sir. That is correct.
    Dr. Fleming. OK. What is the status of regulations 
exempting plant products manufactured prior to May 22, 2008, 
and those products containing a de minimis amount of Lacey Act 
material?
    Ms. Bech. We have implemented what we call a special use 
designation pre-amendment. So, for importers who, through due 
diligence, have tried to determine the genus and the species, 
but they are unable to do that for products that pre-date 2008, 
then we allow them to use the special use designation on the 
declaration, and then they are in compliance with the 
declaration.
    As far as de minimis, we are moving forward. We published 
an advance notice of proposed rulemaking in 2011 to determine 
what the standard would be for de minimis, and we are moving 
forward on rulemaking for that now.
    Dr. Fleming. Wouldn't it be simpler just to exempt, prior 
to May 22nd, things that--it seems problematic to try to make 
that difference and deal with that. It is such a gray area. Why 
not just exempt those prior to May 22nd?
    Ms. Bech. Well, currently, the way the Lacey Act states the 
requirement is that there must be a declaration. And so, for us 
to exempt something or to say that you don't have to require 
the declaration, we don't have the authority, currently, to do 
that.
    Dr. Fleming. So you would require action from this 
Committee, perhaps--Congress itself, then--to fix that problem?
    Ms. Bech. Yes, sir. We don't have the authority, currently.
    Dr. Fleming. OK, thank you. All right. My time is up. I 
yield to Mr. Sablan for 5 minutes for questions.
    Mr. Sablan. Well, thank you very much, Mr. Chairman. Let me 
start.
    Ms. Bech, I share Chairman Fleming's concern on the long-
overdue report the 2008 Lacey Act amendments require. So we 
look forward to next week's submission. And we are going to 
sort of hold you to your word.
    But many wood product importers have applauded your 
agency's phasing implementations of goods to be declared. And 
your agency took smart steps toward facilitating the 
declaration process by phasing in products based on their 
degree of processing and complexity of their composition. What 
other actions have you taken to facilitate compliance with the 
2008 amendments?
    Ms. Bech. Well, I mentioned these in my testimony. We, 
again, have some special use designations. So this is where 
people can look at things that are common, such as fir and 
hemlock and Western Cedar, and they can group those together 
underneath the special use designation. It is also used for the 
pre-amendment, those things that they can't tell genus and 
species of products that were done before 2008.
    We have done a lot of outreach and education. As we have 
reviewed the declaration and we have looked at the errors, we 
have gone back to the importers, working with them to correct 
these errors. And we are also developing our LAWGS data base, 
which is a web-based system. We are hoping that will really 
streamline, in particular, the paper declaration process. 
Looking at the errors that we have seen, we are developing 
drop-down menus to make it easier for people to classify the 
plant units and the common names and scientific names.
    So, we are providing a lot of these kind of efforts and, 
again, a lot of outreach and education.
    Mr. Sablan. Thank you. Mr. Guertin from Fish and Wildlife. 
From where I am from, it has been sometimes reported that the 
United States authority has been, a lot of the time, charging 
people with poaching of the Marianas fruit bat. And there is 
some truth to that also, because we were concerned that all she 
was doing was bringing fruit bat cases to the court. But I must 
compliment Fish and Wildlife for doing that, because it is an 
endangered species in the Northern Marianas. But we are talking 
about logging here now.
    So, let me say that the World Bank estimates that illegal 
logging accounts for 50 to 90 percent of the volume of forestry 
activities in key producer tropical countries, and 10 to 30 
percent of all wood traded globally. This tragedy is occurring 
even in formerly protected forests.
    So, how are the 2008 Lacey Act amendments essential in 
reducing global trade in illegal timber? And have they set an 
example for other countries? I flew into the island of 
Hispanola, and I see that half of the island is large with 
forest and the other half is barren because of logging, over-
logging.
    Mr. Guertin. Thank you, Congressman. We think that the 
amendments are very important, because they tell the world that 
the United States will not allow importation of illegally 
harvested timber. U.S. businesses dealing in commercial timber 
scale imports are responsible for knowing where their timber 
comes from, as are other businesses operating in other 
environments. The United Nations has cited this law as one of 
its foremost forest conservation laws enacted in recent years, 
and both the EU and Australia have recently enacted laws that 
are very similar to the 2008 amendments to the Lacey Act.
    Mr. Sablan. All right. And again, after pushing for 
legislation in Congress last year to change the Lacey Act, 
while still under investigation by the U.S. Department of 
Justice, the Gibson Guitar Corporation signed a criminal 
enforcement agreement to avoid further prosecution.
    In addition to admitting to knowingly and intentionally 
importing wood taken illegally from Madagascar, and agreeing to 
fines and forfeitures in excess of $600,000, Gibson was 
required to develop a Lacey Act compliance program. Can this 
program serve as a model for other wood imports?
    Mr. Guertin. Congressman, we think this is a great case 
that illustrates why education and outreach to both the timber 
and music industries is critical for the Service and all the 
Federal partners. Certainly the case and the precedent set by 
the Gibson case sent everyone a strong message that the U.S. is 
serious about enforcing this law. But we want to focus our 
efforts rather on outreach, education, and a proactive 
engagement with industry to, rather, tell the good story and 
get allies to enlist to work on a common cause toward achieving 
the larger policy objective.
    Mr. Sablan. Yes, because we need to work together. 
Otherwise, from where I come from, we don't have bagpipes that 
we just heard earlier, but we have guitars and ukeleles 
strumming.
    So, Mr. Chairman, my time is up, I yield back.
    Dr. Fleming. Thank you. The Chair now recognizes Mr. 
Wittman for 5 minutes.
    Dr. Wittman. Thank you, Mr. Chairman. Ms. Bech, Mr. 
Guertin, thank you so much for joining us today. I want to 
begin by getting both of your perspectives on the Lacey Act. 
Specifically, can you give me what you believe are the pros and 
cons of having the Lacey Act focus on just laws involving 
conservation?
    Mr. Guertin. Congressman, we are a conservation 
organization, so my testimony will be largely focused on that. 
But the Lacey Act, in many ways, is where it all began. This 
goes back to the 1850s and the whole development of the common 
law doctrine that wildlife, fisheries resources, and plants are 
there for all American citizens and future citizens to enjoy. 
And over the last 150 years, our country has formulated the 
North American model of conservation, which puts that premise 
at the forefront, that these natural resources are for all 
citizens to enjoy now and in the future for future generations, 
as well.
    And so, these plant amendments have now brought up the take 
of plants and timber products and other things like that under 
that purview, as well. But it is our guiding principle, as a 
conservation organization, to manage for now and future 
generations for all citizens to benefit from these natural 
resources.
    Dr. Wittman. OK. Ms. Bech?
    Ms. Bech. USDA supports the aim of the Lacey Act in 
protecting natural resources from illegal logging and 
harvesting, as well as the role in eliminating unfair 
competition. And so we support the amendments and our role in 
that in implementing the declaration. Thank you.
    Dr. Wittman. OK. Let me ask this. I know that there has 
been a number of stories and real-life instances where people 
are dealing with the 2008 amendments to the Lacey Act, and 
really has a lot of people scratching their heads to say, ``How 
in the world are those folks in the regulated community going 
to deal with this?''
    Can you tell me? What are both of your agencies doing to 
help the regulated community deal with these changes to the 
Lacey Act in 2008? As you know, for many of them, they have 
scratched their heads, they have monumental amounts of 
paperwork that they have to go through. And, even then, they 
are frustrated to say, ``I have no idea what I need to do to 
comply.''
    Can you give me your perspective on what you are doing, or 
what you need to do, to assist the regulated community?
    Ms. Bech. Well, I think first we tried to take an approach 
of a phased-in approach, so that we dealt with things that were 
very clear that could fall underneath the declaration 
requirements, and those that were more complex and more 
difficult have come in further phases. And so we are still 
continuing with that process.
    And we have looked at a lot of the issues initially, and 
maybe some of the head-scratching that was going on with how to 
comply. That is how we geared our outreach and education. We 
have done several things, again, to help with that, and address 
these problems. And we have actually found that initially it 
took, we estimated, about an hour-and-a-half to fill out the 
declaration because it was so new and difficult. And what we 
are finding today is we are estimating it is down to about 30 
minutes to file the declaration, due to the outreach efforts 
that we have done.
    And also, I think that the creation of our new data base, 
the LAWGS, that is going to be very, very helpful for those 
that are still struggling with paper declarations. And so it is 
numerous steps like this included in my testimony.
    Dr. Wittman. Thank you. Mr. Guertin?
    Mr. Guertin. Thank you, Congressman. We are trying to focus 
our efforts largely on education and outreach and partnering 
with the commercial sector, sending our personnel to trade 
organizations and conferences and meetings, outreach seminars, 
talking about what the requirements are and how we are trying 
to streamline compliance. We are focusing less of our effort on 
going after prosecution of individual violations, but rather, 
focusing our limited law enforcement, if we need to, on 
criminal-level commercial exploitation of these wood products 
overseas.
    Dr. Wittman. Let me ask you all a couple of questions I 
want to try to get in before my time is up. Just simple yes-or-
no answers.
    Do you believe that the 2008 amendments to the Lacey Act 
are reasonable? Ms. Bech?
    Ms. Bech. Yes.
    Dr. Wittman. Mr. Guertin?
    Mr. Guertin. Yes, Congressman, from our perspective.
    Dr. Wittman. Do you believe that there are any changes that 
are needed to those amendments in any future reauthorizations? 
Ms. Bech?
    Ms. Bech. Well, we believe we have the regulatory authority 
and flexibility now, with our current administrative processes, 
to deal with the challenges.
    Dr. Wittman. OK. Mr. Guertin?
    Mr. Guertin. We would concur, Congressman. The legislation 
could stand, and we could work with the Federal family to 
streamline some of the procedural requirements.
    Dr. Wittman. So you believe, then, the statutory authority 
could be refined in order to make sure that the process is 
streamlined?
    Mr. Guertin. I don't think we would need to amend the 
legislation, Congressman. We could work within the existing 
legislation to streamline the processes.
    Dr. Wittman. Do you believe that you have achieved that 
now, currently, Ms. Bech?
    Ms. Bech. I believe that we still have some work to do, and 
that as we continue to develop the data base and continue 
focusing on some of the issues and challenges we face, we have 
other means and flexibility in working with our inter-agency 
partners to address those in administrative ways.
    Dr. Wittman. Mr. Guertin, quickly, yes or no?
    Mr. Guertin. Yes.
    Dr. Wittman. OK. Thank you. Mr. Chairman, I yield back.
    Dr. Fleming. The gentleman yields back. The Chair now 
recognizes Mr. Lowenthal for 5 minutes.
    Dr. Lowenthal. Thank you, Mr. Chairman, for holding this 
hearing. And thank you to the witnesses for attending today. I 
admit, as a new Member, and like many Americans, I was not 
familiar with the Lacey Act before coming to Congress. But 
after learning about this landmark wildlife protection law, it 
quickly became apparent that the Act has broad public support, 
from industry to environmental NGO's, because of the effective 
job that it has done in protecting American jobs threatened by 
the illegal wildlife trade, and in reducing the harvesting of 
threatened fauna and flora throughout the world.
    For example, I have a letter here that was signed by 55 
U.S. forest products companies supporting the Lacey Act. In the 
letter from the forest companies it says, ``Our organizations 
stand in strong support of the Lacey Act and all that it has 
accomplished in addressing the issue of illegal logging 
worldwide since its passage in 2008.'' I am talking about the 
recent amendments. ``Illegal logging and the threat posed to 
the United States in terms of jobs and forest resources by 
illegally sourced products throughout the world is being 
addressed by the Lacey Act, allowing our industry to compete 
fairly in the international market.''
    I ask, then, for unanimous consent to place this letter 
into the record, Mr. Chair.
    Also, the U.S. forest products industry supports the Act 
because it helps to create a level playing field for U.S. 
forest product companies, preventing them from being undermined 
by illegal loggers. This has contributed to a 70 percent 
increase in U.S. forest products over the past few years, while 
most other global exporters have remained flat, or have 
declined, according to the Hardwood Federation. This translates 
into more jobs and a stronger U.S. economy.
    So, therefore, the Lacey Act has also had a significant 
role in reducing illegal global deforestation, which has 
contributed to a 22 percent decline in illegal logging, 
according to the non-partisan think tank, The Chatham House. 
This reduction in illegal logging has helped to combat climate 
change by eliminating an estimated one billion tons of 
greenhouses gases, an amount nearly equivalent to the annual 
emissions from Japan.
    I also then ask for unanimous consent to place into the 
record a letter supporting the Lacey Act from over 30 
environmental groups to the record. These numerous and 
substantial benefits explained why the law has such broad-based 
support from environmental groups, unions, and industry.
    [The letters submitted for the record by Mr. Lowenthal 
follows:]
         Letter Submitted by the U.S. Forest Products Industry 
                                                       June 4, 2012
Dear U.S. House of Representatives:
    Our organizations stand in strong support of the Lacey Act and all 
that it has accomplished in addressing the issue of illegal logging 
worldwide since its passage in 2008. We strongly oppose legislation 
such as H.R. 3210, The Retailers and Entertainers Lacey Implementation 
and Enforcement Fairness Act, H.R. 4171, the Freedom from Over-
Criminalization and Unjust Seizures Act (FOCUS) Act of 2012 which 
weaken this important law, and/or the amendments being offered by 
Subcommittee Chairman Fleming.
    The U.S. forest products industry produces about $175 billion in 
products annually and employs nearly 900,000 men and women in good 
paying jobs. The industry meets a payroll of approximately $50 billion 
annually and is among the top 10 manufacturing sector employers in 47 
states. An industry study prior to passage of the 2008 Lacey Act 
amendments estimated that illegal logging cost the U.S. forest products 
industry some $1 billion annually in lost export opportunities and 
depressed U.S. wood prices.
    Because of the seriousness of this issue, our industry has worked 
within a unique coalition that also includes environmental groups, 
labor organizations, retailers and others to amend the Lacey Act, and 
to encourage full and timely implementation. The coalition has 
continued consensus talks in the U.S. Senate.
    The U.S. forest products industry has a proud tradition of 
providing sustainable and legal resources to our customers both 
domestically and around the world. Illegal logging and the threat posed 
to U.S. jobs and forest resources by illegally sourced products 
throughout the world is being addressed by the Lacey Act, allowing our 
industry to compete fairly in the international market. Please oppose 
H.R. 3210 (The RELIEF Act), H.R. 4171 (The FOCUS Act), the Fleming 
amendment to H.R. 3210, and other amendments that weaken and undermine 
the Lacey Act. We stand ready to work with you and your colleagues on 
finding alternative approaches.

    Sincerely,

    Please See Attached for Full List of Signatures
 Action Floor Systems Alabama          Missouri Forest Products Assoc.
Forestry Assoc. American Forest &     National Alliance of Forest Owners
 Paper Assoc.
American Forest Resource Council      National Hardwood Lumber Assoc.
American Forest Foundation            National Wood Flooring Association
American Hardwood Export Council      NewPage Corp.
Anderson Hardwood Floors              Northeastern Loggers Assoc.
Appalachian Hardwood Manufacturers    Northern Hardwoods
 Inc.
Associated Oregon Loggers, Inc.       Northland Forest Products
Atlanta Hardwood Corp.                Oregon Forest Industries Council
California Redwood Assoc.             Oregon Women in Timber
Columbia Forest Products              Pennsylvania Lumbermens Mutual
                                       Insurance Co.
Domtar                                Penn-York Lumbermen's Club
Empire State Forest Products Assoc.   Plum Creek Timber Co.
Emporium Hardwoods                    Resolute Forest Products
Graphic Packaging International       Rock-Tenn Co.
Hardwood Federation                   The Rossi Group
Hardwood Manufacturers Assoc.         Scotland Hardwoods
Hardwood Plywood & Veneer Assoc.      The Shannon Lumber Group
Highland Hardwood Sales               Shannon Plank Flooring
International Paper Co.               Shaw Industries Group
Kentucky Forest Industries Assoc.     Tennessee Forestry Assoc.
Lake States Lumber Assoc.             Texas Forestry Assoc.
Mallery Lumber Co.                    Timber Products Co.
Maple Flooring Manufacturers Assoc.   Treated Wood Council
Maxwell Hardwood Flooring             Virginia Forestry Assoc.
Minnesota Forest Industries           Western Hardwood Assoc.
Minnesota Timber Products Assoc.      Wood Component Manufacturers
                                       Assoc.
                                 ______
                                 
   Letter Submitted for the Record by: 350.org; Blue Green Alliance; 
Center for Biological Diversity; Center for International Environmental 
    Law; Clean Air Task Force; Dogwood Alliance; Earth Day Network; 
 Environmental Investigation Agency; Forest Stewardship Council-United 
     States; Forest Trends; Friends of the Earth; Global Witness; 
     Greenpeace; International Fund for Animal Welfare; League of 
 Conservation Voters; National Wildlife Federation; Natural Resources 
 Defense Council; Olympic Forest Coalition; Rainforest Action Network; 
Rainforest Alliance Reverb; Saint Louis Zoo; Sierra Club; Sound & Fair; 
 Sustainable Furnishings Council; The Field Museum; The Lands Council; 
The Madagascar Fauna Group; The Nature Conservancy; Union of Concerned 
 Scientists; United States Green Building Council; United Steel, Paper 
  and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and 
   Service Workers International Union (USW); Wildlife Conservation 
                      Society; World Wildlife Fund
                                                       June 6, 2012
    Dear Representative:
    On behalf of our millions of members and supporters, we urge you to 
oppose H.R. 4171: The Freedom from Over-Criminalization and Unjust 
Seizures Act of 2012 (FOCUS Act), and H.R. 3210: The Retailers and 
Entertainers Lacey Implementation and Enforcement Fairness Act (RELIEF 
Act), as well as any other amendments under consideration that would 
undermine the Lacey Act. The RELIEF and FOCUS Acts will hurt American 
businesses and severely undermine longstanding U.S. leadership in 
global conservation and curbing illegal logging. The Fleming Amendment 
to H.R. 3210 would be equally damaging and would do nothing to address 
the concerns outlined below.
    Responding to the economic and environmental costs of illegally 
traded timber, the Lacey Act was amended in 2008 with overwhelming 
bipartisan support from Congress, industry, labor and environmental 
organizations to make it unlawful to trade timber and wood products or 
other plants taken in violation of the laws of either a U.S. state or a 
foreign country.
    With illegal logging costs to the U.S. timber and wood products 
industry estimated at approximately $1 billion per year, the 
consequences of undercutting this law are significant. In an October 
11, 2011 letter to Congress more than 15 U.S. trade associations 
underscored that ``Illegal logging threatens U.S. jobs by allowing 
unfair competition in wood commodities throughout the world and 
destroys the world's forests.'' When the U.S. government combats 
illegal logging, this promotes the use of sustainably and legally 
sourced U.S. forest products. This ensures that the U.S. forest 
products industry can compete on a level playing field, thereby 
boosting its strength and supporting U.S. jobs.\1\
---------------------------------------------------------------------------
    \1\ The U.S. forest products industry produces about $175 billion 
in products annually and employs nearly 900,000 men and women in good 
paying jobs. The industry meets a payroll of approximately $50 billion 
annually and is among the top 10 manufacturing sector employers in 47 
states.
---------------------------------------------------------------------------
    After four years, the 2008 amendments are already showing 
impressive results. Illegal logging is on the decline, as much as 25% 
worldwide, with reductions as high as 50-70% in some key countries. 
Companies around the globe are changing the way they make sourcing 
decisions and monitor their supply chains. Consistent enforcement over 
time is essential to solidify these new behaviors so they become common 
practice. Signatories to the October 11th letter urged, ``that no 
legislative action be taken to diminish the contributions of the Lacey 
Act to these important objectives.''
H.R. 3210, the Retailers and Entertainers Lacey Implementation and 
        Enforcement Fairness Act (RELIEF) Act, would destroy the 
        effectiveness of three key provisions of the Lacey Act 
        responsible for driving positive change:
      Import Declaration. H.R. 3210 would remove the 
requirement for manufacturers and retailers of all non-solid wood 
products to know what kind of wood they are trading. Knowing the type 
and source of wood is essential to ensuring legality, one of the 
centerpieces of the Lacey Act. Among the multitude of products this 
would exempt, this measure would explicitly exclude pulp and paper from 
any future requirement to document its wood source. Pulp, paper, 
paperboard, and the products made from them are by far the largest 
segment of imports covered by the Lacey Act amendments. Excluding pulp 
and paper alone risks killing good paying manufacturing jobs in an 
industry that employs almost 400,000 people in forty-two states with a 
combined $30 billion in annual compensation.\2\
---------------------------------------------------------------------------
    \2\ United States Department of Labor, Occupational Safety and 
Health Administration: http://www.osha.gov/SLTC/pulppaper/index.html & 
American Forests and Paper Association: http://www.afandpa.org/
PulpAndPaper.aspx.

       The agencies of jurisdiction have already decided to implement 
the declaration requirement in a phased manner to allow industry time 
to prepare. In addition, leading retailers, importers, producers, labor 
and environmental groups have developed a careful consensus on 
recommendations to improve implementation of the declaration. This 
measure would ignore that consensus.\3\
---------------------------------------------------------------------------
    \3\ The more than 50 organizations supporting the consensus process 
are also now discussing the proper treatment of composites in detail. 
For reference, the 2009, 2010 & 2011 consensus statements are available 
at http://www.eia-global.org/LaceyActConsensusStatements.
---------------------------------------------------------------------------
      Significant penalties to deter illegal-sourcing. The law 
has been effective in part through the deterrent effect it has on bad 
operators, who perceive their risk of being prosecuted or having goods 
seized as a reason to change behavior. H.R. 3210 would remove this 
impetus for change by limiting penalties for all ``first infractions'' 
to a minor fine of $250, regardless of size of the company, volume or 
value of the illegal product. This provision would likely impact a case 
currently under investigation involving significant quantities of 
precious wood allegedly logged illegally in the biodiversity-rich 
forests of Madagascar.
      Forfeiture of illegally-obtained product. Under the Lacey 
Act, ill-gotten gains are subject to confiscation, as is U.S. standard 
practice for dealing with illegal goods. H.R. 3210 would instead allow 
for all major manufacturers to keep wood that has been proven to be 
stolen, regardless of the severity of evidence of illegal logging. 
Without the threat of losing merchandise that has been acquired in 
contravention of the law, what is the incentive to ensure legal 
sourcing?
    Contrary to arguments that this bill will benefit musicians, a 
number of prominent musicians have signed a pledge stating that they 
support the Lacey Act and oppose current efforts underway to weaken the 
law, such as the RELIEF Act.\4\ This pledge also urges lawmakers to 
help ensure that the music industry has a positive impact on the 
environment rather than contributing to forest destruction and human 
rights abuses.
---------------------------------------------------------------------------
    \4\ This pledge has been signed by: Mick Jagger, Sting, Bonnie 
Raitt, Willie Nelson, David Crosby, Dave Matthews Band, Bryan Adams, 
Bob Weir, Sarah McLachlan, Lenny Kravitz, Jack Johnson, Jason Mraz, 
Maroon 5, Lily Allen, Lana Del Rey, Simon Le Bon (Duran Duran), Debbie 
Harry, Jools Holland, Barenaked Ladies, Brad Corrigan (Dispatch), Pat 
Simmons (Doobie Brothers), Brett Dennen, My Morning Jacket, Guster, The 
Cab, Ryan Dobrowski and Israel Nebeker (Blind Pilot), Ray Benson 
(Asleep at the Wheel), Of A Revolution (O.A.R.), Jack Antonoff, Razia 
Said, Richard Bona, and over 40,000 other musicians and individuals 
from around the world. Full text of the pledge can be viewed: http://
www.reverb.org/project/lacey/index.htm.
---------------------------------------------------------------------------
H.R. 4171, the Freedom from Over-Criminalization and Unjust Seizures 
        Act (FOCUS) Act, removes all criminal penalties as well as the 
        need to comply with foreign laws from the entire Lacey Act.
      Foreign Laws. The scope of foreign laws covered is 
explicitly identified and described for the purposes of capturing those 
laws most relevant to stopping illegal trade in wildlife and plant 
products. The FOCUS Act proposes to remove these protections, leaving 
legitimate business operators once again vulnerable to being undercut 
by illegal competitors. It also seriously hampers enforcement of the 
Endangered Species and Marine Mammal Protection Acts as well as the 
Convention on the International Trade of Endangered Species (CITES) 
because violations of these measures are often enforced under the Lacey 
Act.
      Criminal Penalties. Criminal penalties are an essential 
part of the Lacey Act, as civil penalties alone will not be strong 
enough to deter the organized crime and criminal mafias that are often 
at the heart of illegal logging and wildlife trafficking operations. As 
a World Bank report from March 2012 makes clear, an effective fight 
against this scourge has to look beyond the poor loggers in the forest 
or the petty criminals, and focus on those who are truly enriched by 
this illicit activity.
    Further, if the Lacey Act is decriminalized, violators will not be 
subject to federal search warrants and may very well be in a ``safe 
harbor'' simply by crossing state lines. Illegal commercialization of 
fish, wildlife and plants is often sophisticated, well financed and 
often engaged in other illegal activities. When these ventures cross 
state lines, as they almost always do, the resources of the U.S. Fish 
and Wildlife Service and the enforcement powers allowed under the 
current Lacey Act are essential to a successful prosecution. The 
proposed changes will likely take the U.S. Fish and Wildlife Service 
out of the picture and make effective enforcement of interstate 
violations virtually impossible.
    We are committed to working with Members of Congress, companies, 
NGOs, Agencies, and other interested stakeholders in developing rules 
that ensure effective implementation of the Lacey Act and maintain its 
environmental integrity. Now is the time for sensible dialogue to 
ensure the Lacey Act amendments of 2008 remain strong while addressing 
reasonable concerns. Dismantling the principal tenets of the law is 
misguided and would be a travesty for American businesses and global 
conservation efforts.
    We urge you to oppose H.R. 3210, H.R. 4171 and any related 
amendments, including the Fleming Amendment, which would bring sweeping 
changes to undermine implementation and enforcement of this incredibly 
effective century-old law.
                                 ______
                                 
    Dr. Lowenthal. So, this is my question in the time. To help 
me understand, from the Administration's point of view, how the 
Administration views the Act as being effective, do they 
believe that it has been as effective as I have stated by these 
groups? And what have been the major complaints about the Act 
that you are hearing? I would ask both witnesses.
    Mr. Guertin. Thank you, Congressman. Yes, we think it has 
been a very effective addition to the Act to help in the larger 
conservation goals our agency pursues with all of the other 
Federal agencies. We are trying to work through some of the 
very legitimate concerns our partners in private industry have 
expressed to us about some of the procedural requirements 
that----
    Dr. Lowenthal. So it is the procedural requirements.
    Mr. Guertin. Yes, Congressman. Much as many of these 
environmental statutes and requirements--what our partners and 
industry are seeking is certainty and decisions from the 
Federal Government whether they can move forward or not. And 
what we are working on with APHIS and the other Federal 
partners is to give industry that certainty and that ability to 
move forward with legitimate business purposes.
    Dr. Lowenthal. Thank you.
    Ms. Bech. APHIS's piece of implementing the Act is on the 
declaration process. And so, the things that we have heard the 
importers say that are difficult with that initially have been 
researching the product and the sources for the products, and 
then the more administrative piece of just complying with 
filing the declarations.
    We have, of course, as I have stated earlier, done many 
things to help with outreach and education, looking at the 
common errors, going back and providing information to the 
importers, so that it makes it easier for them to comply.
    Dr. Lowenthal. So you think that the complaints that you 
have heard can be corrected internally, without any other 
legislative changes?
    Ms. Bech. Yes, sir. We believe that we have enough 
flexibility within our regulatory framework and our 
administrative processes right now to address the concerns that 
have been raised to date.
    Dr. Lowenthal. Thank you. I yield back my time.
    Dr. Fleming. The gentleman yields back. Next Mr. Thompson 
is recognized for 5 minutes.
    Mr. Thompson. Thank you, Chairman.
    Dr. Fleming. You can defer your time to someone else, if 
you like.
    Mr. Thompson. No, I am ready to go.
    Dr. Fleming. Oh, OK.
    Mr. Thompson. Yes, yes, I am good to go on the Lacey Act. 
Thank you, Mr. Chairman. Thanks for having this hearing. And to 
both deputy administrators--thanks, Deputy Administrator, 
Deputy Director, thanks for being here. As Chair of the 
Subcommittee on Agriculture that has jurisdiction over 
forestry, obviously the Lacey Act, I think, it is an important 
piece of legislation, and the purpose behind it is to deter and 
hopefully prevent illegal logging.
    I think the frustrations that come with is come with every 
regulation, it comes at the implementation phase. And that is 
not easy. You don't have easy jobs. But we are all charged with 
trying to do our best for the citizens to make sure what 
regulations are necessary, that there is a pathway to 
compliance. And so, that is why I appreciate this hearing. It 
allows us to really talk about some of those issues.
    Deputy Administrator Bech, you mentioned in your testimony 
that the amendment directs you to provide legislative 
recommendations to Congress to assist with the identification 
of plants in violation. I am actually more curious to see what 
you have found that can help you deal with this 
administratively? And can you give examples of what you have 
already done in this regard?
    Ms. Bech. Yes, sir. Well, several things. One of the ones 
we have mentioned is the de minimis, and looking at that. That 
further will clarify products that would fall outside of the 
requirements.
    Certainly we have talked about the definition of the common 
food crop and common cultivar. Again, that takes out a major 
part of those kinds of products, over 500,000, that would be 
exempt, then, from the declaration. So these are just a few of 
the things, administratively. And we are very excited about the 
Web site, the web data base that we are providing, which will 
make----
    Mr. Thompson. What is the progress of that? What is your 
timeline, in terms of implementation? That obviously makes a 
lot of sense, in terms of assisting folks to navigate this.
    Ms. Bech. Well, we provided our first webinar to industry 
groups on this, and we are beginning to pilot that this summer. 
We hope for full implementation in the late fall.
    Mr. Thompson. OK. Thank you. Deputy Director Guertin, 
currently the Lacey Act requires people to exercise due care to 
learn whether it is against the law anywhere in the world to 
transport, possess, or sell a specific fish, wildlife, or plant 
product. And yet the Federal Government has taken the position 
that it is not their job to identify what international law 
might trigger a Lacey Act violation.
    It seems like the law is set up in a way that folks will 
violate it no matter what they do. It is difficult enough for 
probably large, multi-national companies to keep track of all 
the international laws covered by the Lacey Act, but how do we 
expect an individual musician, a mom-and-pop business to 
exercise due care, especially when there is no data base of 
international laws to consult? That lack of a data base is 
something I saw as striking, actually.
    Mr. Guertin. Yes, Congressman. And we recognize that is a 
great frustration, both for industry and private citizens. Like 
APHIS, we are focusing a lot of effort on education, outreach, 
interpretive materials for folks coming in across the borders 
through various mechanisms to relieve some of the uncertainty, 
particularly for those who are musicians in the population.
    The U.S. just sponsored, at the Congress of Parties 
conference in Thailand, CITES, this past spring a new musical 
passport that will be implemented mid-next month that would 
allow American citizens to have one document, instead of having 
to require them to obtain a document for every country they 
travel to. So we are really trying to pursue some creative 
solutions to give both private citizens and industry a little 
more certainty. Because we recognize the overwhelming majority 
of commerce is very legitimate--law-abiding citizen, as well as 
industry.
    Mr. Thompson. Thank you for sharing what you are doing, in 
terms of specific musicians. That is obviously the kind of 
background that really got this teed up most recently. But it 
obviously expands beyond a guitar or a musical instrument. The 
folks are traveling overseas, and they pick up some type of 
trinket, some type of souvenir, like we have all done. How do 
we assure that the citizens who, quite frankly, find themselves 
in a situation where they are being arrested, prosecuted, made 
an example of, when, quite frankly, these are folks who were 
just acting the way most innocent tourists do?
    Mr. Guertin. Sure, Congressman. The Fish and Wildlife 
Service or any Federal agency will not try to make a case 
against anyone who has unknowingly violated any type of 
wildlife law. We, again, try to focus on education, outreach, a 
lot of just information for people. We focus all of our law 
enforcement at the commercial scale, where we think we can 
really make a significant difference with those bad actors out 
there who are doing the wholesale take of plant, fish, 
wildlife, and other species like that.
    If a citizen is caught, unfortunately, it is just, for us, 
more of a unfortunate situation. We may or may not confiscate 
the item, let them off with a warning. But it is more about 
education and outreach for the individual citizen.
    Mr. Thompson. Very good. Thank you. Thank you, Mr. 
Chairman.
    Dr. Fleming. The gentleman yields back. Next, Ms. Shea-
Porter.
    Ms. Shea-Porter. Thank you, Mr. Chairman. And I am always 
impressed when I look back in history and see how much our 
forefathers and mothers had the insight and the foresight to 
see some of the challenges ahead and to put laws into place to 
protect our very precious environment.
    And about a week ago I read in the New Hampshire newspaper 
that we were having problems--illegal harvesting of eel elvers. 
And for those who don't know, those are baby eels. And I have 
to admit I didn't know that word, either. But the issue 
existed, and continues to exist, and so we are grateful for 
organizations and government agencies such as yours to monitor 
and to help protect these resources for this generation and the 
next generation, as well.
    I, too, am concerned, and I hope we will see that report 
next week. There are certain responsibilities that come with 
that and, you know, that is given, and I appreciate the fact 
that you have addressed that.
    So I have questions for both of you. First, how has the 
difficult budget climate hindered APHIS's ability to implement 
the 2008 Lacey Act amendments? And can you also tell me, 
please, what impact you expect the sequester to have on your 
agency, going forward?
    Ms. Bech. Yes. Thank you. Well, certainly it wasn't until 
just a few years ago that we actually received any appropriated 
funds for helping us implement. We have had very, very limited 
resources to provide work for this effort.
    We are requesting the $1.445 million for next year, and we 
are hopeful that will be supported. Certainly these resources 
are much needed. We would continue to add some staff to this 
effort. We would look at other innovative ways--enhancing the 
data base that we have to help us analyze the information, and 
looking at other efforts in providing outreach and education.
    So, with the support of the budget, we believe, then, that 
we will be able to continue the efforts that we have already 
begun. Thank you.
    Ms. Shea-Porter. So your workload has increased without the 
extra funding to enable you to accomplish all that you hope to 
accomplish, and that we have asked you to.
    Ms. Bech. The workload has increased. And, of course, there 
is certainly more that we would like to do, as well. And so, 
again, we are hopeful that the budget request will be 
supported. Thank you.
    Ms. Shea-Porter. Thank you.
    Mr. Guertin. Thank you, Congresswoman. Specifically with 
the impacts of the sequestration on our law enforcement 
program, because of the way this was applied at the sub-
activity level, it precluded us from being able to move forward 
to hire a new class of law enforcement agents to add additional 
capacity. Our solution, like all the Federal agencies, is we 
are focusing our efforts with the folks we do have on board, 
where we can make the most significant impacts. But not 
bringing in that next cadre of folks will have a long-term 
effect on our ability to implement the program.
    As to moving forward, the President's budget request for 
2014, which the U.S. Congress is currently evaluating for your 
consideration through the appropriations process, there are 
some incremental funding increases in their for our law 
enforcement program, which would allow the Service, if Congress 
appropriates this funding, to hire an additional five positions 
overseas in range countries--specifically in Asia and Africa, 
for example--as attaches to work with the international 
business community, international countries, education, 
enforcement, as well as proactive solutions to keep a better 
eye and put solutions on the ground for the trade in wildlife, 
plants, and fish species as well.
    Ms. Shea-Porter. OK, thank you. And you can keep your mic 
on, because I had one more question for you. After China, the 
United States imports more wood products than any other country 
in the world. Do the 2008 Lacey Act amendments make it more 
difficult to bring illegal wood into the U.S.? And what do you 
base your statement?
    Mr. Guertin. We don't think it makes it any more difficult 
for legitimate businesses to import any type of product in with 
the new requirements of the 2008 Lacey Act. What this Act has 
given the Federal agencies the ability to do is get a better 
handle on the illegal importation of some of these products, 
and for us then to focus our efforts on those bad actors who 
are out there.
    Ms. Shea-Porter. Have you been able to reduce any of the 
illegal wood coming in by using that?
    Mr. Guertin. It is only anecdotal information coming in so 
far, Congresswoman, but we believe the trend is starting to 
show up that there has been an impact on making a difference in 
some of this illegal commercial utilization overseas.
    Ms. Shea-Porter. Which would be good for domestic 
producers.
    Mr. Guertin. It would be very good for domestic producers, 
yes.
    Ms. Shea-Porter. Thank you, and I yield back.
    Dr. Fleming. The gentlelady yields back. Mr. Harris?
    Dr. Harris. Thank you very much. And thank you, Mr. 
Chairman and the Committee, for allowing me to sit in in my old 
Subcommittee.
    Let me just ask a question, just so I get it straight. Now, 
Ms. Bech, you are charged with kind of collecting these forms, 
but you don't investigate them or all. How do they get from you 
over to Fish and Wildlife?
    Ms. Bech. Yes, sir. That is correct, we don't do the 
enforcement piece. So we are collecting the declarations. We 
send these over once a month, and also at request. Like 
recently, the Department of Justice has asked for all the paper 
declarations, and they will be scanning those and then using 
those in their enforcement actions.
    Dr. Harris. OK. So you are just a passive conduit. I mean 
you don't do anything with those forms. You don't look at them 
in any way, you are a conduit. You collect them and pass them 
on.
    Ms. Bech. Well, we do monitor them.
    Dr. Harris. But what is monitor? If you are not doing 
investigations, what does monitor mean? I mean this sounds just 
like the background check for guns. The FBI gets the NICS call, 
but it doesn't do anything. It just hands everything over to 
ATF. So is this the same situation? I mean you are not 
responsible for enforcement at all?
    Ms. Bech. No, sir. We are not----
    Dr. Harris. OK. And you collect--was your testimony that if 
you had--all these reports were made, you are getting about 
40,000 a month--did you say it would be a whole lot more if 
everybody had to report everything? It would be, like, a 
million a month? Is that what you said?
    Ms. Bech. Yes, sir. That is correct.
    Dr. Harris. A million a month. And you would just be 
passing them--OK. Well, let me get to Mr. Guertin.
    So, what peaks your interest in these reports? Because my 
question to you is I have information here, I want to know if 
it is true, there are only three ongoing investigations, none 
of them triggered by a declaration form. Is that right?
    Mr. Guertin. There are actually six cases that we have 
worked on in the last fiscal year, Congressman. Three have been 
satisfied, three are ongoing. In some part, our information was 
derived from these declaration forms. I can't get into the 
details of those cases, but they do include commercial 
exploitation overseas.
    Dr. Harris. Commercial what?
    Mr. Guertin. Exploitation of paper product or timber 
overseas.
    Dr. Harris. OK. All six of those?
    Mr. Guertin. All six of these cases we have looked into 
have been wood-related.
    Dr. Harris. OK. And how many of them were triggered by the 
fact that somebody at Fish and Wildlife saw something on one of 
these 1.9 million forms?
    Mr. Guertin. The three cases that are currently under 
investigation right now were partly informed by the information 
derived----
    Dr. Harris. I don't understand what ``partly informed'' 
means, because it means--somebody's ears have to go up on 
something. Partly informed could mean that it is just part of 
the investigation. I mean how many originated because one of 
these forms triggered--because I am going to an on-demand 
system, where, obviously, you wouldn't see a form. So----
    Mr. Guertin. I can't share any further information because 
this is an ongoing investigation. We would be glad to sit with 
you offline and go through some of the specifics of this.
    Dr. Harris. Why? I am just curious; I am relatively new to 
Congress. Why would offline and online be any different? Are we 
hiding something from the American people?
    Mr. Guertin. Not at all.
    Dr. Harris. Then go ahead and answer my question.
    Mr. Guertin. These are cases that are under active 
investigation right now with us and the Department of Justice.
    Dr. Harris. Are these national security issues? Look, this 
is a congressional inquiry. You are collecting 1.9 million 
pieces of paperwork causing tens of millions of dollars to 
American businesses. I want to know if any of those pieces of 
paperwork was the origination of investigation.
    Mr. Guertin. In part it was, Congressman. But, Congressman, 
I will also be honest with you----
    Dr. Harris. Let me tell you how other systems work, like 
NICS. You know, ATF doesn't investigate someone trying to 
illegally obtain a firearm unless the FBI says, ``Someone tried 
to illegally obtain a firearm, here is the information, go 
ahead and investigate.''
    I want to know if that is how those investigations started. 
It is a simple question. It is not a complicated question. I 
mean did somebody sitting in an office, wasn't going to do 
anything, got a piece of paper or an electronic form from Ms. 
Bech's 1.9 million submissions and said, ``Oh, my gosh, I think 
there is a crime here,'' or did somebody have a suspicion, got 
a piece of paper, and continued to investigate, which would 
lead to the belief that an on-demand system would work just 
fine?
    This is not a complicated question. There are only six of 
these. If you have to go back and take some time to review back 
at home at the office, all six, just tell me you need time to 
review.
    Mr. Guertin. Congressman, you won't be satisfied with my 
oral statement here, so yes, we will provide for the record a 
more detailed----
    Dr. Harris. And when will you have that answer available to 
me?
    Mr. Guertin. Within the next week, if that would be 
satisfactory.
    Dr. Harris. A week would be fine. Now, let's get to an on-
demand system. Can you do it under the current confines of the 
statute, or would you need a statutory change?
    Ms. Bech. APHIS does not have the authority under the 
current statute to implement an on-demand system at this time, 
since the Lacey Act does require importers to file a 
declaration upon importation.
    Dr. Harris. So you would need a statutory change. And----
    Ms. Bech. Yes, we----
    Dr. Harris. And was your testimony exactly the same before? 
What were you talking about before when you said, yes, you may 
have some ability to change some of the declaration process? 
Was that just with electronic declaration, or----
    Ms. Bech. No, sir. What we believe is through electronic 
submissions and our web-based system, that we can do some 
further streamlining of the declaration process to address some 
of the concerns that people have identified that they feel like 
an on-demand system would correct. And so, we feel like some of 
those issues that have been brought forward can be addressed 
through another mechanism.
    Dr. Harris. OK. Thank you very much. Thank you, Mr. 
Chairman.
    Dr. Fleming. The gentleman yields back. Mr. Duncan is 
recognized.
    Mr. Duncan. Thank you, Mr. Chairman. And just the nature of 
Congress, things pull you away sometimes. This is a very 
interesting topic, something that we have been following for a 
number of years.
    And I really don't have any questions for the panelists, 
but this may have been brought up earlier, but when this Lacey 
Act issue, especially with Gibson Guitars and maybe a couple of 
others came out, we raised concerns about whether certain 
groups were being targeted by the U.S. Fish and Wildlife 
Service over the Lacey Act because they were contributors to 
certain campaigns or had certain leanings. And in light of what 
we see going on right now with the IRS targeting certain groups 
that just have words like ``patriot'' or ``freedom'' in their 
names, or that study the Constitution, in light of that scandal 
that is going on right now, I think it is important that we 
keep in mind and be cognizant of what happened with Gibson 
Guitar, and the concerns we raised about the Lacey Act being 
used to target certain groups. I think it is time to revisit 
that.
    I don't know if there is any substance to it, but it is 
something that I am cognizant about, as we have this hearing, 
in light of what is going on in Washington. And after that 
comment, I will just yield back. Thank you so much.
    Dr. Fleming. The gentleman yields back. I believe that is 
all for the first round. I think there is perhaps some follow-
up questions----
    Ms. Shea-Porter. Mr. Chairman? Could I make one more 
statement, please?
    Dr. Fleming. Yes.
    Ms. Shea-Porter. Thank you. I am concerned that when we 
have these hearings, we are not germane and we are just not 
staying on topic a lot of times. And I have some concerns. I 
realize that there are issues that divide us. But honestly, I 
mean, to keep politicizing this, we are not having an IRS 
hearing right now. And I just don't think it is helpful to the 
tone. We are sitting here trying to bridge this gap. It is not 
just the feet between us, but it is also some viewpoints. And I 
just think that I hope the next panel----
    Dr. Fleming. Does the gentlelady want to bring up a point 
of order?
    Ms. Shea-Porter. Yes, I----
    Dr. Fleming. Because I will be happy to give you time in 
just a moment----
    Ms. Shea-Porter. Thank you.
    Dr. Fleming [continuing]. If you have----
    Ms. Shea-Porter. Thank you. I just wanted to say--actually, 
I will just leave it as it is, and say our next panel----
    Dr. Fleming. The Chairman duly notes that.
    Ms. Shea-Porter [continuing]. I hope we can concentrate on 
the issue at hand. Thank you.
    Dr. Fleming. So we will begin another round here of 
questioning. And I will recognize myself for 5 minutes.
    I just want to be sure, Mr. Guertin. You said something and 
I am not sure--we may have miscommunicated in question-and-
answer. Just to be sure--because I asked if--that it is both 
sustainable and legal. In other words, if it is illegal, can it 
also be sustainable. And your answer, I wasn't sure whether you 
agreed with that or not.
    Mr. Guertin. Congressman, I think the bagpipes were playing 
then. I thought you said can it be both sustainable and legal. 
But you are clarifying now ``illegal''? No----
    Dr. Fleming. My question is ``illegal.''
    Mr. Guertin. And I apologize, because I----
    Dr. Fleming. Yes.
    Mr. Guertin [continuing]. Misunderstood what your question 
was.
    Dr. Fleming. Yes.
    Mr. Guertin. But it cannot be both sustainable and illegal. 
And thank you for that opportunity to clarify that.
    Dr. Fleming. OK, thank you. Now, Ms. Bech, it is 
interesting. You said, as I understand your testimony and your 
response to questions, you do not feel any further amendments 
are necessary for the Lacey Act, that everything can be done 
without any further amendments?
    Ms. Bech. That is correct.
    Dr. Fleming. And do you agree with that, Mr. Guertin?
    Mr. Guertin. Yes, Chairman.
    Dr. Fleming. But yet, when I said, ``Well, it seems like to 
me we could solve a lot of problems here by exempting prior May 
22nd,'' you said that would require further acts. So it seems 
like, to me, that you are already suggesting that--and there 
have been other questions raised, as well--that there are 
problems already that we can't fix without further legislation.
    Ms. Bech. Well, we believe that by providing the special 
use designation, where a importer can come in and through due 
care has tried to determine genus and species, is unable to do 
so, then they can evoke the special use designation and say 
pre-amendment 2008, and therefore they meet the requirement of 
the declaration.
    Dr. Fleming. Yes, but that is very problematic. So why not 
just exempt? Prior to May 22nd that is old history. Why in the 
world are we still struggling with this problem? You say that 
under current law you don't have the ability to create 
regulations to solve that problem.
    Ms. Bech. That is correct.
    Dr. Fleming. That is correct?
    Ms. Bech. Yes.
    Dr. Fleming. OK. All right. Now, here is the other question 
I have. Do I also understand, Ms. Bech, that you said that 
industry widely accepts this, that the current Lacey laws in 
effect, and the amendments of 2008 are widely accepted by 
industry? Is that part of your testimony? I thought I heard you 
say that. I just wanted to confirm. Did you say that or not? We 
can always go back to the transcript. So you seem to be a 
little hesitant to agree with yourself on this. I just want to 
get clarification.
    Ms. Bech. Well, I don't recall specifically stating it is 
widely accepted. I said that we have been working with 
importers on the use of it, and we have streamlined efforts to 
help them. And so they are able to comply with the declaration.
    Dr. Fleming. But my question is, is industry widely 
accepting this? What, in your view, is industry acceptance on 
this? I mean we are hearing about 1,000-page applications that 
have to be completed, very expensive, lots of impact. You heard 
Mr. Duncan refer to what we are seeing in government today, 
where industry is being intimidated by the Federal Government 
in many different areas, not just the IRS. We are hearing 
reports about the Endangered Species Act and other areas.
    So, my question is, do you have a sense that industry 
widely accepts the current Lacey Act and the 2008 amendments?
    Ms. Bech. Well, I think that we have heard from many 
industries that feel like there are a lot of challenges in 
complying with it. And we have also heard from industries that 
feel very strongly in support of it. So we have tried to 
address the concerns and the challenges that some of the 
industries have brought----
    Dr. Fleming. What about you, Mr. Guertin? What is your 
perception of industry? Is it widely accepted by the industry?
    Mr. Guertin. I think we have some acceptance from certain 
segments and certain individual companies and individuals in 
industry. We have heard concerns from other members of 
industry, as well. We are trying to, within that framework, 
move forward to be proactive and put solutions on the ground 
for implementation, so that we can make this law----
    Dr. Fleming. I am not hearing that you are confident at all 
that industry is comfortable with what is going forward, and it 
isn't fully implemented.
    Well, let me ask one other question. Do you have the 
authority to establish a data base of foreign laws? Either one 
of you.
    Mr. Guertin. I would have to check with our authorization 
lawyers on that, Mr. Chairman----
    Dr. Fleming. Ms. Bech?
    Mr. Guertin [continuing]. Personally aware----
    Dr. Fleming. Do you know?
    Ms. Bech. Yes. We currently have no plans to establish that 
data base. And again, I----
    Dr. Fleming. I am sorry. I didn't ask you if you had plans. 
Do you have the authority? Because, again, you said, ``We don't 
need any more laws, we don't need any more amendments.'' Do you 
have the authority to do that?
    Ms. Bech. I would have to check with my office of general 
counsel.
    Dr. Fleming. I would ask that you both find out and report 
in writing on that.
    Thank you. I would now recognize Mr. Sablan for 5 minutes.
    Mr. Sablan. Thank you very much, Mr. Chairman. And let me 
say, Mr. Guertin, can you please explain why the declarations 
required under the 2008 Lacey Act amendments are an important 
tool for law enforcement? Doesn't having these records increase 
your chances of finding patterns of illegal activities? And 
would an on-demand system limit your ability to identify 
patterns of illegal activity in real-time?
    Mr. Guertin. Thank you, Congressman. As is the case with 
many wildlife cases that we are involved with, most of the 
declarations filed are never used, because they are filed by 
businesses that are following the law. That said, we use these 
declarations as part of all of the tools at our disposal for 
law enforcement to prioritize which cases we want to pursue. 
And this type of on-demand system that you and the other 
Members and the Chairman have been talking about may be a way 
forward to help further strengthen this program, overall.
    Mr. Sablan. All right. That is why I am thinking, because I 
heard over a million declarations were filed. And out of that, 
maybe six, maybe less than six have led to investigations.
    Because Dr. Harris raised questions earlier about filing 
all the declarations. And I am sure in the medical professions, 
checklists serve as an important tool to avoid medical 
mistakes. I am not a doctor, but I am assuming that, because I 
have seen my doctor do that.
    So, in your view--I am thinking, but I am asking you--in 
your view, is the declaration a kind of checklist to help those 
in the timber industry ensure that they are not contributing to 
illegal logging? Maybe those one million declarations have led 
to maybe six or less investigations--maybe those checklists 
helped. I am asking both of you. We will start with Mr. 
Guertin, please.
    Mr. Guertin. Thank you, Congressman. The forms that are 
filed, we don't view them necessarily as a checklist, as just a 
report of what the product is that is being shipped into the 
U.S. We use this and a whole lot of other information to 
prioritize our caseload for our law enforcement program. Our 
agents work each year on about 13,000 high-priority cases, 
where we evaluate and then prioritize which cases warrant 
further workload and investigation, if there has been a 
significant violation.
    Of those, it is probably in the hundreds that we actually 
turn into a formal case to investigate and then try to 
prosecute. And of those, over the last two cycles, six have 
been plant-related. So it is part of an information process 
that we use to focus up----
    Mr. Sablan. Ms. Bech, I have several questions. Can you 
give me a short one on my question?
    Ms. Bech. Yes, sir. Again, we are primarily responsible for 
collecting the declaration. We do refer those. And I am aware, 
from Fish and Wildlife Services and DOJ, that there are some 
open investigations.
    Mr. Sablan. All right. And so now, Ms. Bech, let me ask. 
How has public feedback affected how you have implemented the 
2008 Lacey Act amendments? Have you been open to industry's 
suggestions for making compliance easier?
    Ms. Bech. Yes, sir. We have worked very hard with the 
industry groups to hear what their concerns are. And we have 
tried to address those in many different ways. We have 
provided, again, a lot of guidance to them in how to fill out 
the declaration forms. Primarily we heard that their ability to 
research the sourcing of the product has been a real challenge.
    Mr. Sablan. So if a company makes an honest mistake, for 
example, what happens? Wouldn't the United States Department of 
Agriculture, your, what, Animal and Plant Health inspection 
service be most interested in helping those companies comply 
with the law?
    Ms. Bech. Yes, sir. When we find that there has been an 
error or a problem with filling out the declaration, we go 
directly back to the importer and try to work with them to help 
them in completing the declaration accurately. And so we 
provide a lot of direct comments back to them and work with----
    Mr. Sablan. And maybe that is why we have maybe six of 
them, maybe--charges filed. I think it is working. I am not 
sure--something that works--but anyway, Mr. Chairman, I yield 
back my time.
    Dr. Fleming. The gentleman yields back. The Chair now 
recognizes Mr. Thompson for 5 minutes.
    Mr. Thompson. Thank you, Chairman. I wanted to try to get 
to some numbers, actually, in terms of violations, Deputy 
Director Guertin, can you provide an accounting for how many 
Lacey Act violations have been investigated And prosecuted 
since the 2008 amendments, a description of the violation, and 
the international law and the country of origin at issue, and 
how the matter was resolved? Is there a data base like that 
available that--I don't expect, obviously, all that information 
today. But whether it is--is that something you could provide 
within 2 weeks, or----
    Mr. Guertin. Yes, Congressman. We will provide the 
information that we have available in the Fish and Wildlife 
Service as a follow-up for the questions and records--and an 
insert for the record for the hearing, if that would be 
acceptable.
    Mr. Thompson. I think that would be very helpful, in terms 
of good transparency, gives us some idea of a kind of a way to 
check the pulse of what we are seeing, where the violations 
are.
    Do we--and I am in the camp that--I think we should be, as 
we get information in terms of international laws that impact 
this, in terms of avoiding the bureaucracy that sometimes gets 
folks into trouble when they are not aware of--I really do 
believe we should be creating that type of a Web site for folks 
to peruse. Do we put that information out, that you are going 
to be able to provide me, in a public way so that is at least a 
tool that people can look to and say, ``Hey, well, you know 
what? Obviously, this has been recognized as a violation, so it 
is not a place I want to go. It is not a plant product that I 
want to go after''?
    Mr. Guertin. Yes, Congressman. We do annual reports from 
our law enforcement program that--some of it is included in the 
budget justification, some of it we have on pamphlets and web 
pages. And we would be glad to include those reference 
materials as part of the hearing record, as well.
    Mr. Thompson. That would be great. Is that a part of the--
what you talked about, the education, more collaborative 
approach that you--where possible, that you are able to take on 
this issue?
    Mr. Guertin. Yes, Congressman, we would be glad to provide 
those details as part of the hearing record.
    Mr. Thompson. OK. I wanted to kind of really focus and see 
if--how many misdemeanor convictions have you had during the 
past 5 years in regards to plant and plant products? Is it----
    Mr. Guertin. We have had none, Congressman.
    Mr. Thompson. No convictions.
    Mr. Guertin. No. With your permission, Congressman, I 
clarify no convictions for a misdemeanor.
    Mr. Thompson. OK. Any idea of how many violations, 
investigations of violations?
    Mr. Guertin. Just the six we have talked about, 
Congressman.
    Mr. Thompson. OK. Very good. Mr. Chairman, I yield back. 
Thank you.
    Dr. Fleming. The gentleman yields back. Ms. Shea-Porter?
    Ms. Shea-Porter. Thank you, Mr. Chairman. Of course, a part 
of the job here is to provide those guidelines so people don't 
make those mistakes. And so it isn't simply an enforcement 
tool, it is also a tool to educate and to make sure--so I think 
the fact that we have everybody register their cars and get 
licenses, we don't assume--and actually, it is a very small 
number that actually do something terrible in their cars, but 
there is still a process where they learn, have a permit, they 
study the rules.
    And so, is it so that this actually helps people to 
protect? It is not simply a punitive tool that you are seeking, 
but also to help protect our environment and our resources and 
help protect our businesses? Do you see that as your role, 
also?
    Mr. Guertin. Yes, Congresswoman. This is part of a larger 
portfolio of conservation statutes that the Fish and Wildlife 
Service and the other agencies work on in partnership with the 
States, the Tribes, and the international community to 
safeguard under the rubric of the North American Model of 
Conservation that goes back 150-some years here in our country 
that guides this larger founding principle that these wildlife, 
plant, and fish species belong to all of us and for future 
generations to come.
    Ms. Shea-Porter. Right. And I think that we would rather 
protect than prosecute. So I think it speaks well that there 
are few prosecutions.
    Now, I heard the Chairman say that this--all of this seems 
to somehow or another intimidate businesses. But I am holding a 
letter to the House of Representatives from businesses. And I 
would like to read into the record. It says, ``The U.S. forest 
products industry has a proud tradition of providing 
sustainable and legal resources to our customers, both 
domestically and around the world. Illegal logging and the 
threat posed to U.S. jobs and forest resources by illegally 
sourced products throughout the world is being addressed by the 
Lacey Act, allowing our industry to compete fairly in the 
international market.'' So they oppose these amendments, and 
they go on to list their names here.
    And this is industry speaking now, and I will just name a 
few of them, because they are big ones. American Forest and 
Paper Association, they do not seem to be intimidated. Anderson 
Hardwood Floors, Associated Oregon Loggers, Appalachian 
Hardwood Manufacturers, Columbia Forest Products. I am trying 
to pick from around the country. Hardwood Federation, 
International Paper, Kentucky Forest Industries Association, 
Minnesota Timber Products Association, Virginia Forestry 
Association, Treated Wood Council, Timber Products, Texas 
Forestry Association, Wood Components Manufacturers 
Association. I would argue, Mr. Chairman, that rather than be 
intimidated, they seem to be supporting and appreciating our 
role here, and the Lacey Act, in trying to protect them from 
illegal actions.
    Dr. Fleming. Would the gentlelady yield----
    Ms. Shea-Porter. Yes, I will.
    Dr. Fleming [continuing]. Just for a moment? None of those 
are importers of wood products.
    Ms. Shea-Porter. Say that again.
    Dr. Fleming. None of those that you listed are importers of 
wood products.
    Ms. Shea-Porter. The point that we are making here, again, 
is that what we are trying to do is, first of all, make sure 
that we don't have that. So they support this. The other part 
is--we are talking about American industry. And American 
industries, that is what we are about. That is our goal here.
    Let me read a little bit more, reclaiming my time----
    Dr. Fleming. Well, could I just----
    Ms. Shea-Porter. Reclaiming my time, thank you. ``Because 
of the seriousness of this issue, our industry has worked 
within a unique coalition that also includes environmental 
groups, labor organizations, retailers, and others, to amend 
the Lacey Act and to encourage full and timely 
implementation.'' And they go on to talk about the importance 
of the industry meeting a payroll of approximately $50 billion 
annually.
    This is important to our industry. It is important to our 
country. And it is also important to not only the people who 
occupy this land now, but those who will be here in times to 
come. And so, while we certainly always want to make sure that 
these agencies do the work properly, that they don't go after 
any certain sector, and we want to make sure that it is fair, 
there is also reason that we do this. These laws don't just 
come about because certain people have decided to harass other 
people here. This is critical work they are doing.
    And again, the law dates back to, what, 1900? So all of the 
issues and the sub-issues that we are arguing here, 1900 they 
recognized that there was a problem and they wanted to address 
it to conserve and protect. And I think that while we talk 
about this, we need to make sure that we are careful about how 
we talk about this, as well. Thank you, and I yield back.
    Dr. Fleming. The gentlelady yields back. Again, before I 
recognize a point of personal privilege, what we are discussing 
today is filling out these voluminous, very expensive forms. 
And again, I can understand that a domestic wood company would 
not have a problem with that because, again, they don't deal 
with that.
    So, with that, I will yield to the gentleman, Mr. Duncan.
    Mr. Duncan. Thank you, Mr. Chairman. And thanks for making 
those comments. And I believe in the Lacey Act. I believe it 
serves a very valid purpose, from its original intent. And so I 
don't want any comments to be construed that I don't appreciate 
the efforts of Fish and Wildlife Service and other agencies 
that actually have to enforce this.
    But I am concerned, and I appreciate the comments that a 
consumer wouldn't really have any criminal liability if they 
did due diligence to investigate where the particular material 
that made whatever consumer product they were purchasing, and I 
will use a guitar here, since Gibson is on my mind. But when a 
customer goes in a store and they purchase a guitar or any 
other item from the shelf, they play it, they like it, like the 
sound of it, like the look of it, how much more due diligence 
do they really have to do about where that wood came from, or 
where other products that were used in that item came from?
    And so, I appreciate there is no criminal liability, but I 
still question them out of due diligence.
    And then the second thing I just--and I don't expect an 
answer on that. The second thing I am concerned about is a 
story that I read last year when we were having these Lacey Act 
hearings about--I believe it was lobster tail that was packaged 
by a company in the United States that were to be shipped, I 
believe, to Honduras. And they were seized by our government, 
not because that company had violated U.S. law at all, other 
than a provision in the Lacey Act of 2008 that says you can't 
violate a law in another country. So that company has to know 
the laws of another country, and hope that they are not 
violating that, when their own government swoops in with SWAT-
like tactics, often times, to seize products and face 
tremendous fines that actually puts that company out of 
business. That seems a little un-American to me, that we would 
require and enforce the laws of another country. I think that 
is a caveat within the 2008 amendment when we start enforcing 
laws of other nations. We should enforce the laws of the United 
States.
    So, I think that is just something the courts are probably 
going to end up having to decide, or we in Congress are going 
to have to change within the 2008 law, to take that ambiguity 
out, because I think we have an ultimate goal and role to 
support U.S. industry, U.S. small businesses. And so that is 
just a concern I have. Maybe you all have touched on that.
    But the last question I would like to ask is the accounting 
of how the Lacey Act violations have been investigated and 
prosecuted since the 2008 amendments. And so I am asking can 
you provide to this Committee, preferably within 7 days, a 
description of the violations, international laws, and country 
of origin at issue, and how the matter was resolved, where 
there has been Lacey Act violations? If you can just provide us 
an accounting. Maybe you have that today. If you do, that is 
great. If not, I look forward to that being submitted.
    Mr. Guertin. Thank you for that question, Congressman. To 
put everything in context, we work on almost 13,000 law 
enforcement cases each year for all of the wildlife laws that 
we enforce. And of that total, almost 2,500 are for violations 
of the Lacey Act, interstate----
    Mr. Duncan. 2,500.
    Mr. Guertin. But when you throw in all of the other 
statutes, Endangered Species, African Elephant Conservation 
Act, the Rhino and Tiger Act, smuggling laws, and things like 
that, the Lacey Act is a small subset of that. And of those 
2,500, we have pursued about 6 for plant-related things. But we 
are largely focusing our efforts on some of these larger 
smuggling rings for rhinos and tigers and some of these 
charismatic megafauna.
    The caseload is building slowly for some of these plant 
species and timber species as well, but as we told your 
colleague, Congressman Thompson, we would be glad to provide a 
detailed rack-up of these statistics, as well, for the record.
    Mr. Duncan. Yes. Well, Mr. Chairman, I don't have any 
further questions. I just hope the panelists and government 
agencies that are overseeing the Lacey Act understand the 
frustration of Members of Congress as we hear from companies 
that have been affected in other ways about what is the role of 
Federal Government, what should we be enforcing and what are we 
enforcing and why, and how we can just pull back a little bit 
to make sure that businesses understand the law.
    Businesses don't want to violate the law. There are 
violators out there. There are people that are going to break 
the laws anyway. I am not talking about that. I am talking 
about the companies that are just trying to provide for their 
workers and their family, provide products for this country, 
and they are trying to do it within this myriad of regulations 
and rules that they have to operate in. They need to be able to 
have some certainty that the game isn't going to change 
tomorrow. They need to have some certainty that they can 
legibly read and understand the laws that are on the books, so 
that they can comply.
    Whether that is State or local or Federal laws, I think we 
owe it to those businesses to provide that ability for them to 
understand how they need to operate, what does that spectrum 
look like, so that they can provide those services and provide 
for their family, ultimately, and be successful chasing the 
American dream. And so that is why I think this is so 
important, Mr. Chairman. And I appreciate you guys 
understanding our frustration as we hear from the others, and 
as we work together to make sure that we support those 
businesses. And I will yield back.
    Dr. Fleming. The gentleman yields back. And we thank you 
today for your testimony and answering questions. We need to 
move along to our next panel, so we will excuse you and ask the 
next panel, the second panel, to step forward.
    Your written testimony will appear in full in the hearing 
record. So I ask that--oh, I am sorry, I jumped ahead here. 
Yes, right here, here we are.
    OK, all right. We are now ready for our second panel of 
witnesses, which includes Mr. Steve McCreary, General Manager, 
Collings Guitars; Mr. Travis R. Snapp, Chief Operating Officer 
of Benchmark Holdings; Ms. Birgit Matthiesen, Special Advisor 
to the President and CEO, Canadian Manufacturers and Exporters; 
Mr. Jameson S. French, President and CEO, Northland Forest 
Products; Mr. Marcus A. Asner, Partner, Arnold and Porter; and 
Mr. Erik O. Autor, the President and CEO of Autor Global 
Strategies and Total Spectrum.
    Your written testimony will appear in full in the record 
today, so I ask that you keep your oral statements to 5 
minutes, as outlined in our invitation letter to you, and under 
Committee Rule 4(a). Our microphones are not automatic, so be 
sure and push the button to turn it on, and keep the mouthpiece 
close.
    The timing lights are very simple. You have 5 minutes in 
your testimony.
    You will be under green light for the first four, yellow 
light for the last minute, and when it turns red we ask that 
you quickly conclude your comments.
    I now recognize Mr. McCreary for 5 minutes on your 
testimony on behalf of the National Association of Music 
Merchants.

STATEMENT OF STEVE MCCREARY, GENERAL MANAGER, COLLINGS GUITARS, 
                          INCORPORATED

    Mr. McCreary. Mr. Chairman, Congressman Sablan, and members 
of the Subcommittee, my name is Steve McCreary. I am the 
general manager of Collings Guitars, which is a medium-sized 
manufacturing company located in Austin, Texas. I am here today 
on behalf of NAMM, the National Association of Music Merchants. 
They are headquartered in Carlsbad, California. They have more 
than 9,000 member companies who make and sell a variety of 
musical instruments and accessories. I appreciate the 
opportunity to be here today and share our industry's views on 
the 2008 amendments, one of our country's most important 
conservation laws, of course, the Lacey Act.
    We operate in a 27,000 square-foot facility in Austin with 
90 employees. Last year we produced more than 2,700 high-end 
acoustic and electric guitars, mandolins, and ukeleles. We sell 
through retailers in 34 States and 19 countries, and our 
exports have grown to be approximately 20 percent of our 
business. To maintain our quality and reputation, hand-crafting 
still plays a major part of our instruments process, and we 
must pay close attention to the species and sourcing of wood 
and other materials used in our instruments.
    With regard to the 2008 amendments, our company, NAMM, and 
the music products industry are supportive of the goals of this 
law. While we know of no direct evidence which would indicate 
that passage of the amendments have resulted in a reduction of 
illegal logging, we are keenly aware that it is important to 
promote the legal and sustainable production and harvesting of 
the wood species which lend so much to the beauty and tonal 
quality of our instruments.
    Collings has always made an effort to exercise caution in 
our procurement practices, but I believe we are currently 
better stewards due to the 2008 amendments. Lacey led us to 
review our vendor compliance program, thereby eliminating some 
suppliers while continuing to deal with those we believe share 
our integrity and commitment to legal and responsible 
practices.
    Nevertheless, we do have some concerns about how the 2008 
amendments have impacted our business, and our customers, both 
retailers and musicians. In short, the way it is applied has 
been increasing our cost.
    First is the import declaration process. About 40 percent 
of our woods come from outside the States. And for every 
shipment, inbound shipment, a document must be filed with the 
Animal, Plant and Health Inspection Service. Regardless of who 
the importer of record is, a customs broker must assist with 
the details involved with the imports, and it costs us money 
each time an import declaration is filed. As with filing our 
export declarations for instruments that leave our borders that 
have inlays made of seashell, these filing costs add up. The 
whole process seems a bit like making taxpayers file a return 
with every paycheck, instead of annually.
    We understand that APHIS is currently receiving almost 
40,000 declarations each month, and processing these imposes a 
substantial cost and burden on the Agency. Even the reported 
effort toward the electronic filing I don't think will 
substantially reduce the costs to us or those of the 
government. There must be a more efficient way to accomplish 
this, and we believe that the importer of covered products 
should be required to maintain records pertaining to what 
materials they import and where they come from, and that such 
information should be available to enforcement agencies on 
request. But the document should not have to be filed with 
every shipment. We think this would be cost effective, and 
would allow the government to focus on finding the needle of 
high-risk imports, without having to look through the entire 
haystack of all imports.
    As indicated, we have a due-care process that should assure 
us of receiving only raw materials which comply with Lacey's 
requirements. However, because of the broad reach of Lacey to 
cover a myriad and still undefined array of foreign laws, it 
could still be possible for our company or others to come into 
possession of material with questionable providence. We are 
experts at making guitars, not foreign laws. We and our 
industry colleagues have a great concern that we could do 
everything right, have no actual or inferred knowledge of 
illegality, exercise required due care, and yet end up with 
materials or finished goods confiscated.
    For many in our industry, that could be a death blow, 
especially true for the smaller companies, the way we started 
out, as well as our wholesale and retail customers and working 
musicians. We are certainly not arguing for a get-out-of-jail-
free card for our industry; we simply think that the Lacey Act 
should provide for a process by which a manufacturer can seek 
the return of raw materials or finished products in front of an 
independent party, such as an administrative or court judge, 
before customs can impound them.
    Finally, the 2008 amendments should be modified to exempt 
from all enforcement raw materials or instruments which were 
imported or manufactured prior to the effective date of the 
law. I know that most of our early instruments are still in 
use, and the same holds true for instruments made by other 
companies in our industry who have been in business far longer. 
There are plenty of 100-plus year-old instruments being played 
and performed with every day. We understand that the 
government's position that if pre-2008 products are resold 
after 2008, they are also subject to enforcement actions.
    Saying that such actions are not a enforcement priority 
does little to ease the concern of the music products industry 
or our customers. We would urge that the law be amended to 
exempt material harvested and products finished prior to May 
22, 2008 from all aspects of the Lacey Act.
    In conclusion, Mr. Chairman, we are supportive of the goals 
and objectives of the 2008 amendments of the Lacey Act. As with 
any law, we think there have been unintended consequences. And 
we hope that with what we regard as common-sense proposals, the 
law could be modified favorably by the Congress. We thank you 
very much.
    [The prepared statement of Mr. McCreary follows:]

  Statement of Steve McCreary, National Association of Music Merchants

    Mr. Chairman, members of the Subcommittee, I am Steve McCreary, 
General Manager of Collings Guitars, a medium-sized company located in 
Austin, TX. I am here today on behalf of NAMM, the National Association 
of Music Merchants. Headquartered in Carlsbad, CA, NAMM has more than 
9,000 member companies around the world who make and sell a variety of 
musical instruments and accessories.
    I appreciate the opportunity to be here today to share our 
industry's views on the 2008 amendments to the Lacey Act, one of our 
country's most important conservation laws.
    Before I do, however, let me tell you a little bit about Collings 
Guitars, which started in the mid-1970's when Bill Collings began 
building guitars on his kitchen table with just a few hand tools. 
Descended from a family of engineers, Bill dropped out of college to 
pursue building guitars. A decade later, Bill was in Austin, building 
flattop and archtop guitars in his own small shop. As his reputation 
for outstanding quality and meticulous attention to detail quickly 
spread, Bill rented a 1,000-square foot space in 1989 and hired two 
helpers.
    Today, Collings Guitars operates from a 27,000 square foot facility 
featuring technology that makes parts production more consistent, 
accurate and safe. Our approximately 90 employees produced more than 
2,700 acoustic and electric guitars, mandolins and ukuleles last year. 
We sell through retailers in over 30 states and about 20% of our 
business is done outside of the U.S. We are proud that artists such as 
Lyle Lovett and Pete Townshend own many and perform with our 
instruments as do musicians in many other well-known bands
    Despite our growth, handcrafting still plays a major part in our 
instrument production and we pay close attention to the type and 
sourcing of wood and other material used in our instruments. The spruce 
and maple used on the tops of many of our instruments come primarily 
from U.S. forests while other woods, used elsewhere in the instruments, 
come from many countries around the world.
    With regard to the 2008 amendments to the Lacey Act, our company, 
NAMM and the music products industry are supportive of the goals of 
this law. While we know of no direct evidence which would indicate that 
passage of the amendments has resulted in a reduction in illegal 
logging, we are keenly aware that it is important to promote the legal 
and sustainable production and harvesting of the wood species which 
lend so much to the beauty and tonal quality of our instruments.
    At Collings Guitars, we think we are in a better corporate position 
because of the 2008 amendments. We always thought we exercised due care 
in our procurement, but Lacey has led us to review our vendor 
compliance program, drop some suppliers and continue to deal with those 
who we believe share our integrity and commitment to legal and 
responsible procurement.
    Nevertheless, we do have some concerns about how the 2008 
amendments impact our business and our customers, both retailers and 
musicians.
    First is the import declaration process. About forty percent of our 
woods come from outside the United States and for every shipment a 
document must be filed with the Animal and Plant Health Inspection 
Service (APHIS) of the U.S. Department of Agriculture. We are importer 
of record for slightly less than half of our foreign wood and procure 
the rest from sources we believe are reputable suppliers.
    Regardless of who brings in the shipment, however, customs brokers 
assist with the details involved in importing and while these brokers 
perform a valuable role in the supply chain, it does cost us money each 
time a Lacey import declaration is filed. As with filing export 
declarations for shell inlays, which are non-endangered species, these 
costs are generally passed on to our customers. We understand that 
APHIS is currently receiving some 40,000 declarations each month and 
processing these imposes a substantial cost and burden on the agency as 
well. Even a reported effort toward electronic filing will not 
substantially reduce our costs or those of the government.
    There must be a more efficient way to accomplish this. We think 
that importers of covered products should be required to maintain 
records pertaining to what materials they import and where they get 
them from, and that such information should be available to enforcement 
agencies on request, but that documents should not have to be filed 
with every shipment. We think that is more cost-effective and would 
allow the government to focus on finding the ``needle'' of high-risk 
imports, without having to look at the entire ``haystack'' of all 
imports.
    As I indicated, we think we have implemented and follow a due care 
process that will assure us of receiving only raw materials which 
comply with the Lacey Act's requirements. However, because of the broad 
reach of Lacey to cover a myriad--and still undefined--array of foreign 
laws, it could still be possible for our company to come into 
possession of material with questionable provenance.
    We and our industry colleagues have great concern that we could do 
everything right, have no actual or inferred knowledge of illegality, 
exercise required due care and yet end up having materials confiscated. 
For many in the industry, that could be a death blow. That's especially 
true for artisan luthiers--the way Bill Collings started out--as well 
as our wholesale and retail customers and working musicians.
    We are certainly not arguing for a ``get out of jail free card.'' 
We simply think that the Lacey Act should provide for a process by 
which an alleged law violator can seek return of his raw materials or 
finished products in front of an independent party like an 
administrative or court judge.
    Finally, the 2008 amendments should be modified to exempt, from all 
enforcement, raw materials or instruments which were imported or 
manufactured prior to the effective date of the law. I know that many 
of our company's early instruments are still in use, and the same holds 
true for instruments made by other companies in our industry who have 
been in business far longer. Even instruments which are more than 100 
years old are still being played today.
    We understand that it is the government's position that if these 
pre-2008 products are resold after 2008 they are subject to enforcement 
actions. Saying that such actions are not an enforcement priority does 
little to ease the concern of the music products industry and our 
customers. We would urge that the law be amended to exempt material 
harvested and products finished prior to May 22, 2008 from all aspects 
of the Lacey Act.
    In conclusion, Mr. Chairman, we are supportive of the goals and 
objectives of the 2008 amendments to the Lacey Act. As with any law, we 
think there have been unintended consequences and we hope that what we 
regard as common sense proposals to modify the law will be favorably 
considered by the Congress.
                                 ______
                                 
    Dr. Fleming. Thank you, Mr. McCreary.
    Next up is Mr. Snapp--you are Travis R. Snapp--for 5 
minutes on behalf of the International Wood Products 
Association.

  STATEMENT OF TRAVIS R. SNAPP, MANAGING DIRECTOR, BENCHMARK 
  INTERNATIONAL, CHIEF OPERATING OFFICER, BENCHMARK HOLDINGS, 
            INTERNATIONAL WOOD PRODUCTS ASSOCIATION

    Mr. Snapp. Good morning, Mr. Chairman, and members of the 
Committee. My name is Travis Snapp, And I am the Chief 
Operating Officer at Benchmark Holdings. I am pleased to be 
testifying on the Lacey Act before the House Subcommittee on 
Fisheries, Wildlife, Oceans, and Insular Affairs today. I am 
here as a member of the International Wood Products 
Association. IWPA is the leading international trade 
association for the North American imported wood products 
industry, representing 200 companies and trade organizations. 
IWPA has also been active in the Lacey Act Coalition, a broad 
group of domestic manufacturers, retailers, and distributors, 
from small family businesses to multi-national corporations, 
that are greatly impacted by this law.
    My company, Benchmark International, has certainly been 
impacted by the Lacey Act. Originally founded over 60 years ago 
as Pittsburgh Testing Labs, Benchmark International is one of 
the oldest wood product certification and testing agencies in 
operation today. We provide independent, third-party 
certification of wood products, materials testing, research and 
development, international regulatory compliance program 
management, and engineering services.
    I would like to speak to you about my professional 
experiences with the Lacey Act as a product and process 
certifier. I first became involved with the Lacey Act in 2008, 
when Congress amended the statute to include plant and plant 
products. Benchmark International immediately began working on 
a proprietary Lacey compliance verification program. This LCV 
program is designed to provide independent, third-party audits 
to assist manufacturers and importers in demonstrating due 
care, which the Lacey Act defines as the degree of care that a 
reasonably prudent person would exercise under the same or 
similar circumstances.
    Under this program, Benchmark International offers the 
necessary training, detailed recordkeeping, onsite 
investigation, and verification to ensure that a company has 
exercised due care when sourcing raw materials for products or 
importing finished goods from abroad. Our program gives 
downstream customers a high degree of confidence in the 
products they purchase. Since Benchmark began offering the LCV 
program in 2009, we have had 33 manufacturing facilities from 
around the world request to enroll in our program.
    However, due to the complexity of supply chain, and the 
broad scope of the Lacey Act, I have been forced to turn 29 of 
these 33 facilities away from our program. To be very clear on 
this point, this is not to imply that there is illegal material 
running rampant in supply chains. Rather, it demonstrates that 
supply chains are complex, making it difficult to identify 
every chip of wood used to produce a finished good, to the 
extent the Lacey Act requires.
    Several manufacturing facilities, if enrolled in our 
program, would have required two to three full-time staff 
working 40 hours per week, just to keep track of the raw 
material stream. This complexity is not confined to the 
manufacturing facilities that have approached me. Companies in 
the United States and around the world utilize raw materials 
from a variety of sources, both domestic and foreign.
    It isn't just the raw materials that make it difficult to 
certify to Lacey. The vast number of foreign laws included 
under Lacey are unmanageable in scope. Benchmark International 
contracts six legal firms overseas who track only the laws 
related to wood exporting, processing, concessions, and cutting 
in a mere six countries. That limited scope alone accounts for 
over 1,000-plus laws that U.S. companies have to comply with 
when importing wood to the United States. It has cost my 
clients upwards of $300,000 since 2009, when we began our 
program.
    These 1,000 laws and regulations do not scratch the surface 
of what the Lacey Act's true scope includes. When a speeding 
ticket for a truck transporting logs, an overweight vehicle, or 
a customs issue between two governments are all considered 
Lacey Act violations, from my perspective as a certifier, that 
is unreasonable and unachievable.
    My recommendation to this Subcommittee is to clarify the 
scope of the Lacey Act as it relates to plant and plant 
products. This can be done by amending the 2008 Amendment to 
narrow its scope by compiling a list of all foreign laws that 
fall into the Lacey Act, or by a combination of both. It is 
imperative that the scope of laws be narrowed to those that 
actually deal with plant and plant products, that the concept 
of contraband be clarified so that businesses may have their 
day in court, and that pre-2008 material be exempted from the 
Lacey Act declaration requirement.
    Thank you, Mr. Chairman and Committee members for the 
opportunity to appear before you today. I stand ready to answer 
any questions you may have.
    [The prepared statement of Mr. Snapp follows:]

       Statement of Travis Reed Snapp, Chief Operating Officer, 
                        Benchmark International

    Good Morning Mr. Chairman and members of the Committee. My name is 
Travis Snapp, and I am the Chief Operating Officer of Benchmark 
International.
    I am pleased to be testifying on the Lacey Act before the House 
Subcommittee on Fisheries, Wildlife, Oceans, and Insular Affairs today.
    I am here as a member of the International Wood Products 
Association. Established in 1956, IWPA is the leading international 
trade association for the North American imported wood products 
industry, representing 200 companies and trade organizations engaged in 
the import of hardwoods and softwoods from sustainably managed forests 
in more than 30 nations across the globe. Association members consist 
of three key groups involved in the import process: U.S. importers and 
consuming industries, offshore and domestic manufacturers and the 
service providers that facilitate trade. IWPA advances international 
trade in wood products through education and leadership in business, 
environmental and public affairs.
    IWPA has also been active in the Lacey Act Coalition, a broad group 
of domestic manufacturers, retailers, and distributors. This Coalition 
has been reaching out to Congress since 2011 with four specific Lacey 
Act issues they would like addressed. They represent a wide cross 
section of industries, from small family businesses to multi-national 
corporations that are greatly impacted by this law.
    My company, Benchmark International, has certainly been impacted by 
the Lacey Act. Originally founded over 60 years ago as Pittsburgh 
Testing Labs, Benchmark International is one of the oldest wood 
products certification and testing agencies in operation today. We are 
a global leader in providing independent third party certification of 
wood products, materials testing, research and development assistance, 
international regulatory compliance program management and engineering 
services.
    I would like to speak to you about my professional experiences with 
the Lacey Act as a product and process certifier.
Practical Issues with Lacey Act Implementation: The Complexity of 
        Supply Chains and the Scope of Foreign Laws
    I first became involved with the Lacey Act in 2008 when Congress 
passed an amendment that added plant and plant products to the pre-
existing Lacey Act framework. It was immediately clear that this would 
affect the wood manufacturing sector within the United States and 
abroad.
    As soon as the 2008 Amendments were passed, Benchmark International 
began working on a proprietary Lacey Compliance Verification Program 
(LCV). This LCV program is designed to provide independent, third-party 
audits to assist manufacturers and importers in demonstrating ``due 
care'', which the Lacey Act defines as the ``degree of care that a 
reasonably prudent person would exercise under the same or similar 
circumstances.''\1\
---------------------------------------------------------------------------
    \1\ Animal Plant Health Inspection Service, United States 
Department of Agriculture. Lacey Act Primer. http://www.aphis.usda.gov/
plant_health/lacey_act/downloads/LaceyActPrimer.pdf. Page 17.
---------------------------------------------------------------------------
    Under this program, Benchmark International offers the necessary 
training, detailed record keeping, on-site investigation and 
verification to ensure that a company has exercised due care when 
sourcing raw materials for products or importing finished goods from 
abroad. Our program gives downstream customers a higher degree of 
confidence in the products they purchase.
    Since Benchmark began offering the LCV program in 2009 we have had 
33 manufacturing facilities from around the world request to enroll in 
our program.
    However, due to the complexity of the supply chain and the broad 
scope of the Lacey Act, I have been forced to turn 29 of them away.
    To be clear, this is not to imply that there is illegal material 
running rampant in supply chains. Rather it demonstrates that supply 
chains are complex and ranging across continents for individual 
manufacturers, making it difficult to identify every chip of wood used 
to produce a finished good from plant or plant products to the extent 
the Lacey Act in its current form requires.
    Several manufacturing facilities, if enrolled in our program, would 
have required 2 to 3 full time staff working 40 hours per week just to 
keep track of the raw material stream used to produce finished 
products. This complexity is not confined to the manufacturing 
facilities that have approached me; companies around the world and in 
the United States utilize raw materials from a variety of sources, both 
domestic and foreign.
    It isn't just the raw materials that make it difficult to certify 
to Lacey. The vast scope of foreign laws included under Lacey are 
unmanageable in scope--Benchmark International contracts 6 legal firms 
who track only the laws related to wood export, processing, 
concessions, and cutting in a mere 6 countries. That limited scope 
alone accounts for over 1000+ laws (and growing), and has cost my 
clients upwards of 300,000 USD since 2009 when we began our program.
    These 1000+ laws and regulation laws do not scratch the surface of 
what the Lacey Act's true scope includes. When a speeding ticket for a 
truck transporting logs, an overweight vehicle, or a customs issue 
between two governments are all considered Lacey Act violations (a 
felony that is punishable by potential jail time and hundreds of 
thousands of dollars in fines) from my perspective as a certifier, that 
is unreasonable and unachievable. It causes uncertainty for American 
businesses that attempt to operate legally and in compliance with the 
Lacey Act's intent.
Scope of Foreign Laws: A Workable Solution to Aid in Compliance
    My recommendation to this subcommittee is to clarify the scope of 
the Lacey Act as it relates to plant and plant products so as to 
provide assurances for businesses making every effort at due care. This 
can be done by amending the 2008 Amendment to narrow its scope, by 
compiling a list of all foreign laws that fall under the Lacey Act, or 
by a combination of both.
    Businesses have been told not to worry, that the government would 
never prosecute over an infraction as minor as an overweight 
transport--but a customs misclassification was in fact the subject of a 
raid and seizure of goods. American businesses, the jobs they support, 
and the consumers they supply deserve clarity on the scope of foreign 
laws that fall under the Lacey Act. I would ask Congress to legislate 
these changes, so that the businesses I certify can have a chance at 
compliance with the Lacey Act's mandates.
Contraband Should Be Clarified
    Further clarity should be provided for items seized in an alleged 
Lacey Act violation. Under the Department of Justice's current 
interpretation of the Lacey Act, material seized is considered 
``contraband''--as illegal as cocaine. While cocaine is instantly 
recognizable as illegal per se, wood--or finished products produced of 
or incorporating wood--are not.
    This fundamental difference is integral. Because of this 
designation, items seized under the Lacey Act are deemed contraband. 
And much as an individual would be unable to petition a court for the 
return of cocaine, a company is not granted standing in court to 
petition for the return of their seized goods (assuming they can 
demonstrate due care).
    It is imperative that the companies I certify can know they have 
some protection under the law should a Lacey Act case be brought 
against them, or someone in their supply chain.
Clarifying Contraband: A Reasonable Solution
    Not one association or reputable company would ask for those who 
engage in illegal activity to be given a legal pass--if a Lacey Act 
violation does occur, if a company or individual has clearly and 
knowingly traded in illegal material, then I and IWPA would support the 
appropriated penalties under the law. Illegality need not be rewarded. 
Just as I sit before you today giving testimony on the implications of 
the Act as currently written, I would testify against any entity 
domestic or foreign who knowingly violated the Act.
    Ethical companies that have demonstrated their attempt to comply as 
best they can with the Lacey Act should be accorded a day in court to 
contest the seizure, demonstrate the due care they took, and have an 
avenue of recompense. Designating wood as contraband effectively severs 
this route, and does not allow the right to a fair trial.
    This is a wrong that needs to be righted. Wood should not be 
classified as contraband; a legislative fix is required to ensure that 
American businesses have the right to a day in court to demonstrate the 
measures of due care they performed.
Pre-2008 Material: How to Perform Due Care?
    Improved clarity should be extended to other areas of the Lacey Act 
as well. There is still uncertainty with products harvested, imported, 
and/or manufactured prior to the 2008 passage of the Lacey Act 
Amendments. To expect any point in the supply chain--importer, 
distributor, or consumer--to comply with a law in regards to a product 
produced prior to the law's enactment is unreasonable. Determining the 
country of origin and/or species in a product pre-2008 can often be 
difficult, if not impossible. Legislation is necessary to clarify this 
point, and ensure that antiques and other pre-2008 material can be 
bought and sold.
Congressional Action Needed
    Congress should take up Lacey Act reform. I understand firsthand 
the practical difficulties businesses face that rely upon imported and 
domestically sourced wood and wood products under the Lacey Act. An 
unknowable and unmanageable scope of laws, retroactive liability, and 
the denial of a trial if allegations are made--this law, while well 
intentioned, has some practical flaws that desperately need legislative 
attention.
    I want to emphasize that I support the goals of the Lacey Act--I 
don't want illegal logging; I am by nature and profession a 
conservationist. But in order for this law to function as Congress 
intended it to--protecting the forests, weeding out the bad actors, and 
allowing legal trade to continue--fixes are urgently needed. We need a 
common sense approach to this issue.
    It is imperative that the scope of laws be narrowed to those that 
actually deal with plant and plant products, that the concept of 
contraband be clarified so that business may have their day in court, 
and that pre-2008 material be exempted from Lacey Act declaration 
requirements. Businesses, the jobs they support, and they consumers 
they serve deserve that.
    Thank you, Mr. Chairman and committee members, for the opportunity 
to appear before you today. I stand ready to answer any questions you 
might have.
                                 ______
                                 
    Dr. Fleming. Thank you, Mr. Snapp.
    I now recognize Ms. Birgit Matthiesen for 5 minutes to 
present testimony on behalf of the Canadian Manufacturers and 
Exporters.

    STATEMENT OF BIRGIT MATTHIESEN, SPECIAL ADVISOR TO THE 
    PRESIDENT AND CEO, CANADIAN MANUFACTURERS AND EXPORTERS

    Ms. Matthiesen. Mr. Chairman, Committee, thank you very 
much. My name is Birgit Matthiesen And I appear here today on 
behalf----
    Dr. Fleming. Yes. Let me interrupt you for a second. Be 
sure and pull that microphone close. You all are going to have 
to really just share that. Slide it back and forth, and 
hopefully we can hear you a little better. Thank you.
    Ms. Matthiesen. Is it better now?
    Dr. Fleming. Yes, much.
    Ms. Matthiesen. OK. My name is Birgit Matthiesen. I appear 
today before you on behalf of Jayson Myers, the President and 
CEO of Canadian Manufacturers and Exporters. As the foreigner 
in the room, I am doubly honored to be invited to appear before 
you today, and I thank you very much, sir.
    I would also like to think that I am the voice of the 
hundreds, if not thousands, of American companies engaged in 
our vibrant cross-border business relationship. These are the 
companies across America that are our customers, our suppliers, 
and our best business partners.
    In just three words, I can describe the Canada-U.S. 
economic relationship: nature, volume, and immediacy. By 
nature, I mean almost 40 percent of our two-way trade is either 
intra-industry or intra-company. By volume, a truck crosses our 
border every 2 seconds. By immediacy, long gone are the days, 
sir, that these trucks are filled with finished goods destined 
directly to retail shelves. Today they are more apt to be 
component parts destined to just-in-time assembly line 
production facilities all across America.
    Let me focus my remarks on the import declaration, since we 
are, by vast majority, the significant filers of import 
declarations, either because we are importers of record in 
Canada, or our business partners are the importers.
    Canada, as you know, has one-third of the global boreal 
forest. More such forest that is federally protected than any 
other country in the world. Over 90 percent is under public 
stewardship. Our members, like my colleagues at the table 
today, strongly support the goals of the Lacey Act. What are 
our companies doing? Not only do they comply with both U.S. and 
Canadian regulations, they enforce their own supply chains with 
very stringent, good-stewardship programs. They do so as good, 
corporate citizens. But also they do so because their brand 
names demand them to. As one lumber company in Canada once put 
it--this CEO once put it, ``Sustainability is in our fiber.''
    In addition, and across all industry sectors, Canadian 
companies and their carriers partner with U.S. Customs and 
Border Protection, voluntarily spending millions of dollars to 
secure their supply chain against illicit or illegal intrusion.
    What are our two governments doing? Canadian environmental 
and border agencies join with their American counterparts in 
strong enforcement of the CITES provisions. Just next month, on 
June 20th, Canadian regulators will once again be in Washington 
to meet with their American counterparts and American business 
associations to further the work of important bilateral 
initiatives such as the Beyond the Border Action Plan and the 
Regulatory Cooperation Council.
    The idea is to focus government resources and to join the 
resources on the high and unknown elements of our cross-border 
trade against third-country risks. In both cases, we need to 
recognize the need to join our forces. The import declaration 
flies in the face of these efforts. The cost of compliance, 
including additional IT and reporting and staffing costs before 
the import declaration is even sent, is a tax on North American 
manufacturing. The data elements required are near impossible 
to obtain, and will only be exacerbated when the product 
coverage expands up the manufacturing supply chain as is 
currently envisioned in legislation.
    There must be a better way, and there is. Currently, and 
for years now, our NAFTA certificates of origin already attest 
to the Canadian origin of our shipments. Customs transactions 
today are electronically sent to CBP and other border agencies 
well ahead of the arrival of the actual shipment at the 
physical border. CBP and their APHIS staff have the opportunity 
to look at what is coming down the road before the shipment is 
allowed into the United States. Highly sophisticated risk 
analysis tools are applied at this point to this data, again, 
in an effort to seek out any anomalies in global trade patterns 
to focus more attention.
    Gentlemen, Madam, a transactional approach and import 
declaration for each transaction--and you heard the numbers 
today--is neither risk-based or good regulatory practice. CME 
is working closely in both Ottawa and Washington to find new 
ways to manage our cross-border relationship. Canadian agencies 
and our business partners are part of the solution, we are not 
part of the problem. We have to be. The competition from third-
country imports in our own backyard here in North America is 
now stiffer than ever before. Canadian and American companies 
can and we will compete in the global marketplace. But the 
import declaration is simply yesterday's thinking and 
yesterday's enforcement tool.
    I was pleased to hear about the North American cooperation 
that was cited by the panel beforehand. That is exactly the 
approach we need to take for tomorrow. And I thank you very 
much, again.
    [The prepared statement of Ms. Matthiesen follows:]

 Statement of Birgit Matthiesen, Special Advisor to the President and 
             CEO, Canadian Manufactures and Exporters (CME)

    Mr. Chairman, Members of the Subcommittee, thank you for inviting 
me to testify at today's hearing on the Lacey Act. I appear today on 
behalf of Jayson Myers, President and CEO, Canadian Manufacturers & 
Exporters.
Introduction
    CME is the largest business association in Canada representing 
thousands of Canadian companies across many sectors. More importantly, 
a significant portion of our members are either Canadian operations of 
U.S. multinationals, suppliers of component products to U.S. assembly 
operations, or buyers of U.S. manufactured goods. Our offices are in 
every provincial capital in Canada as well as our nation's capitol, 
Ottawa.
    I would like to ask that the Committee accept my formal written 
testimony as part of today's record.
The business community we have built--together.
    I appear before this panel today as the voice of the Canada-U.S. 
business partnership--one that is unique in the world. Long gone are 
the days when a truck travelling across our shared border is filled 
with finished products destined to retail shelves. Today, almost half 
of cross-border shipments are either intra-company supplies or 
component part destined for intra-industry manufacturing plants.
    The volume, the immediacy and the nature of our cross-border 
business partnership has been a key contributor to our shared economic 
health and will continue to play a vital role as our communities on 
both sides of the border return to economic health.
    So while I am representing CME at this hearing, I like to think 
that I am also representing our U.S. business partners and the 
thousands of workers in the United States who depend on our vibrant 
business relationship.
Canada is not part of the problem, rather we are part of the solution.
    An American or Canadian truck crosses our land border approximately 
every two seconds. Hundreds of these trucking companies and their 
customers have voluntarily partnered with U.S. and Canadian border 
agencies to bolster and secure their cargo supply chains. Programs such 
as Customs-Trade Partnership Against Terrorism (C-TPAT), and Partners 
in Protection (PIP) in Canada.
    In addition, their truck drivers and rail crews have been fully 
vetted by CBP and other agencies under the bilateral Free and Secure 
Trade (FAST) program. In both directions, our trucking and rail 
shipments arrive at ports of entry where Canadian and U.S. customs 
officials work in partnership every day to mitigate commercial or 
security risk to our communities. There is no other trading partnership 
that comes close to what U.S. and Canadian companies together have 
pledged with our border agencies.
Our forests
    Canada has one-third of the global boreal forest in a band that 
stretches from coast to coast. Canada also has more boreal forest that 
is federally protected than any other country in the world. This is in 
addition to the fact that 93% of Canada's forests are under public 
stewardship. The area of certified forest in Canada is greater than the 
combined area of all other country certifications; representing almost 
40% of the world's certified forests. This certification system 
complements Canada's comprehensive and rigorous forest management laws 
and regulations.
What our companies are doing
    Our member companies have implemented stringent due diligence 
standards on their entire supply chain. They must, because they know 
that any misstep would damage their corporate standing and their 
commercial access to U.S. and Canadian markets. Further, Canadian 
companies involved in cross-border shipments of wood and plant products 
are well known to U.S. agencies. They send thousands of the same and 
repetitive shipments to the same U.S. customer and supply chain each 
and every day. These are hardly fly-by-night or unknown entities, but 
brand name prominent companies in both countries.
    To them, their sustainability efforts are their competitive 
advantage. Or as one CEO put it, ``sustainability is in our fiber''.
    This responsibility extends to our members' supply chain by their 
conducting reviews and verification of purchased inputs and requiring a 
compliance standard throughout their supply chain to guard against 
illegally logged or improperly harvested forests.
    If any compliance concern is detected, companies immediately cease 
their purchasing from suppliers, period.
    In short, Canadian companies and our US business partners know the 
value of good stewardship.
    For our businesses to survive we must keep unnecessary clogs out of 
our cross-border supply chains and to recognize by regulation and 
policy the safeguards either or both countries together have put in 
place to protect our communities from illegally harvested wood, plants, 
or related products from third countries.
What our two countries are doing--together
    Next month Canadian regulators will be in Washington to meet with 
their American counterparts and American business leaders on the next 
steps towards regulatory equivalence between our two countries.
    Launched in 2011, the U.S. and Canada Regulatory Cooperation 
Council aims to eliminate redundant or obsolete regulations that burden 
our integrated cross-border supply to partner our resources at the 
North American perimeter.
    The statement at its launch tells that story--``The President and 
the Prime Minister have taken this initiative because they believe that 
their citizens deserve smarter, more effective approaches to regulation 
that enhance the economic competitiveness and well-being of the United 
States and Canada, while maintaining high standards of public health 
and safety and environmental protection.''\1\ Cooperation on regulatory 
inspections not only raises the comfort level for U.S. and Canadian 
enforcement agencies, it raises the comfort level for our consumers and 
our families.
---------------------------------------------------------------------------
    \1\ http://www.whitehouse.gov/sites/default/files/us-
canada_rcc_joint_action_plan3.pdf.
---------------------------------------------------------------------------
    Also in 2011, our two countries launched the ambitious ``Beyond the 
Border'' Action Plan that also aims to partner border enforcement 
resources against external risks, harmonize cargo data requirements and 
reduce transactional compliance costs on our intra-North American 
supply chain.
    One of the key initiatives under the Border Action Plan is an 
import management approach that contemplates stepping away from the now 
obsolete transaction-by-transaction import process to an account-based 
system that reports import shipments on a periodic even annual basis. 
Participating companies will share more information on their global 
supply chains with Customs authorities in exchange for periodic import 
reporting. To be clear, this does not mean a reduction of scrutiny, or 
a risk to security--it means better security. Customs authorities can 
better allocate precious resources to target the high-risk elements of 
international trade, while simultaneously reducing costs for our best 
corporate citizens.
    On the multilateral front, Canada and the United States are joined 
in their commitments made in 2011 at the Asia-Pacific Economic 
Cooperation (APEC) work to implement appropriate measures to prohibit 
trade in illegally harvested forest products.
    In Canada, our Wild Animal and Plant Protection and Regulation of 
International and Interprovincial Trade Act (WAPPRIITA) is the 
legislation through which Canada enforces and administers its 
responsibilities under the Convention on the International Trade in 
Endangered Species of Wild Flora and Fauna (CITES), an international 
agreement to protect endangered species. Canada is one of more than 150 
countries which have signed the Convention. The Canadian law stipulates 
the federal permit requirements for the international trade of 
wildlife, their parts, and products made from them.
    How does this work? CITES operates through an import/export permit 
system which require that our companies
      Obtain CITES Permits before an import or export occurs.
      Verify that Customs or the federal department of 
authority validated the CITES permits at the time of export and/or 
import. Without validation, permits will not be accepted. Also, a copy 
of the permit will be retained by Canada Customs and will be forwarded 
to Environment Canada for compliance purposes.
      Ensure all valid cities documents accompany the shipment. 
Note: CITES-listed wildlife may be subject to regulations by other Acts 
of Parliament or provincial and territorial legislation. Other 
government agencies should be contacted, particularly the Canadian Food 
Inspection Agency (CFIA) when importing or exporting live animals or 
plants.
      Advise Environment Canada of wildlife imports in advance, 
to speed the inspection process.
      Comply with the International Air Transport Association 
(IATA) Regulations and the CITES Guidelines for Transport and 
Preparation for Shipment of Live Wild Animals and Plants when shipping 
live specimens.
The Lacey Import Declaration
    A transactional Lacey Import Declaration is unnecessary and a tax 
on North American competiveness. A better approach might be Blanket 
Plant declaration similar to the existing U.S. regulations covering 
importing chemical substance.\2\
---------------------------------------------------------------------------
    \2\ 19 CFR 12.12.
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    In our public comments submitted to the U.S. Department of 
Agriculture, CME expressed unwavering support for the goals of the 
Lacey Act--that of combating illegal harvesting and trafficking of wood 
and plant products. But given that the vast majority of Lacey regulated 
shipments originate in Canada, the border compliance requirement, 
specifically the transactional import declaration, must be revisited.
    In our view, not only because of the commercial costs but because 
we believe that only through combined government efforts based on sound 
and proven risk management principles can we protect our industries and 
our communities from the scourge of illegally harvested plant products.
    In a time when governments on both sides of our border are reducing 
their operational budgets, it is important that agencies be able to 
target high-risk shipments and to act quickly. If those same agencies 
are buried in paper import declarations--mostly from Canada--they have 
fewer resources to go after the much higher or unknown risk elements.
Beyond the horizon
    The current implementation of the Lacey Act declaration is limited 
to a few tariff chapters but the underlying statute clearly indicates 
the intent of Congress at the time was that all products containing 
plant materials would be subject to the a declaration requirement.
    When the import declaration requirement is pushed farther upstream 
in the manufacturing chain, it will become impossible to comply with. 
As an example, a manufacturer of plastic auto parts which contain 
inputs from a myriad other components, such as resin, will not be able 
to determine the origin of the plant that the resin was made from, let 
alone the cultivar and species, or weight and value.
    In addition, the nanotechnology industry today--in both our 
countries--is developing exciting new products from plant fibers. These 
industries, among others, are the job-creators of tomorrow. It is this 
innovation that will spur North American manufacturing competitiveness 
in the years ahead. Applying the Lacey import declaration to these 
products of the future will be impossibility.
    In terms of costs, under the current product coverage for the Lacey 
Import Declaration, the broker cost borne by US importers is raised by 
5-7 times--imagine what any future application of the declaration might 
mean for the U.S. business community. This cost is without a doubt a 
tax on our NA manufacturing sector at a time when our communities can 
least afford additional burdens.
A better way
    CBP and USDA at the border already have at their disposal highly 
sophisticated risk targeting tools, armed with data carriers and 
shippers must provide hours if not days before the truck or rail 
shipment even physically arrives at the land border. It is the success 
of these tools and the risk management approach to cross-border trade 
that allows these agencies to know what will be arriving, from where, 
and at which ports of entry. It allows them to target the unknown or 
less-known elements of what is coming into the United States--be it a 
carrier, a shipper, a commodity, or even an anomaly of shipping 
patterns. CBP officers at ports of entry are highly trained in the use 
of the information and determine which shipments should be given more 
scrutiny at ports of entry.
    CME member companies enjoy an exceptionally high import compliance 
performance rate. They fully support efforts to stem illegal logging of 
endangered forests around the globe. They have and will continue to 
work with U.S. and Canadian agencies--in short, these companies are not 
part of the problem but welcome the opportunity to be part of the 
solution.
    Our business community is not asking for any country carve- out o 
the Lacey Act regulations but only reasonable changes to the import 
declaration.

      1. First and foremost, we ask that a transactional import 
declaration be reconsidered and that a blanket declaration tied to the 
Customs transaction be adopted.
      2. Second, that the data required to meet Lacey import 
requirements reflect an understanding of business practices and 
business confidentiality concerns. We ask that data regulations be 
reasonable and implemented in such a way that the regulated community 
can be able to comply.
      3. Third, that the certification that the Lacey-regulated 
shipment does not contravene any logging regulations in third country 
be shelved. It is an impossible task for the industry, now and 
certainly when the regulated HTS coverage is expanded.

    On the Canada-U.S. front at least, the cumbersome Lacey import 
declaration is not the solution.
    It is yesterday's thinking and yesterday's enforcement tool.
    Thank you and I look forward to any questions you may have.
                                 ______
                                 
    Dr. Fleming. Thank you, Ms. Matthiesen. I got it right this 
time. Thank you.
    The Chair now recognizes Mr. Jameson S. French for 5 
minutes to provide testimony on the 2008 Lacey Act amendments.

 STATEMENT OF JAMESON S. FRENCH, PRESIDENT AND CEO, NORTHLAND 
                        FOREST PRODUCTS

    Mr. French. Great. Thank you very much, Mr. Chairman. My 
name is Jameson French. I am from New Hampshire. My family has 
been in the hardwood industry since the 1880s, so we are on the 
fourth generation. The fifth is coming along. Just for the 
record, I have operations in Virginia, as well as in New 
Hampshire. Back in the good days of 2007, we had 75 employees. 
We dropped down to 55 during the devastating recession, And I 
am happy to tell you that we have gotten back up to 63 now.
    I am representing both my company, but also as a member of 
the Hardwood Federation that is the largest hardwood trade 
association in the U.S. We represent about 10,000 businesses in 
every State in the country. A lot of those businesses, most of 
those businesses, are small, family owned businesses in rural 
areas that provide very important jobs and economic development 
opportunities in those districts.
    Before I get into the--some of the other key points I 
wanted to make, I just wanted to make a clarification, 
Congresswoman Carol Shea-Porter mentioned all those companies, 
and you talked about them not being importers. Many of those 
companies on that list and many of those trade associations 
include importing companies, and I could go into that later on.
    It is very important to note that a healthy, sustainable 
forest means a healthy, sustainable forest industry. It is not 
just about the forest products, it is also about the 
environment, recreation, and wildlife. We are a very long-term 
industry. As my dad says, he is growing trees for his great-
grandchildren. The U.S. is a fabulous wood basket for the 
world, and will continue to be so.
    I take great pride, as an exporter of wood products, that 
the U.S. leapt ahead of the rest of the world back in 2008 and 
took a very big step by amending the Lacey Act to address 
illegal logging. It sent a message out to the world that we--
where we were less effective in some other areas of 
environmental protection, but we were a leader. And since then, 
the European Commission, that estimates about 20 percent of the 
wood coming into Europe has been illegally secured, has passed 
very strict regulations that came into effect this year. 
Australia has also passed similar regulations.
    I would just like to remind everybody that this was a very 
bipartisan amendment when it came through. I am very proud to 
say that both my Senators, Senator Gregg and Senator Sununu at 
the time, Republicans from New Hampshire, were cosponsors, 
along with Senator Alexander, Senator Collins, and several 
other Republicans. It was a bipartisan effort, and we had 
substantial hearings. There was a hearing before this 
Committee, I believe. There were consensus with multiple 
industry groups. It was a very deliberate and very thorough 
process.
    As you probably know, the economic down turn hit the 
industry very hard. We have been very, very dependent on the 
recovery of the industry because of exports. And just a few 
very important statistics that are in my testimony, but I 
should just say that the exports were at the highest level in 
2012 at $1.6 billion. And in 2008 the U.S. share of the global 
hardwood trade was 13 percent. Since that time, coinciding with 
the enactment of Lacey, the share has grown and it reached 20 
percent for the first time. And over the last 4 years, the U.S. 
hardwood exports have risen by more than 70 percent. During 
that same period, exports from all other leading hardwood-
producing countries, with the sole exception of Thailand, have 
been flat or declining.
    In 2012, China's trade statistics recorded a 5 percent 
increase in the imports of U.S. hardwood, while the imports of 
hardwood from all other sources declined by 6 percent. I really 
believe that China, because of our Lacey Act, is starting to 
deal with the problems that they have with illegally traded 
wood.
    In 2012, the U.S. hardwood export value was more than 
double that of Malaysia, the world's second-largest hardwood 
producer. So the U.S. industry has been helped. I have some 
very specific quotes in my testimony from Tom Talbot in 
Wisconsin and from Orn Gudmundsson in Kentucky. I won't read 
them again, but Orn is a wood importer himself, and he believes 
that the Act does not impose undue burden on himself, and it 
helps the import--the leveling the playing field, and it makes 
his customers overseas more interested in buying legal American 
wood products, low-risk products.
    So, we strongly urge--the Hardwood Federation and most of 
the members of my industry strongly urge that the Lacey Act be 
fully implemented, and that we do what we can to fully fund 
APHIS and Fish and Wildlife to make sure it is enforced. And I 
think it would be a really bad mistake to reopen the statute.
    Thank you very much for your attention. I look forward to 
your questions.
    [The prepared statement of Mr. French follows:]

    Statement of Jameson S. ``Jamey'' French, President and CEO of 
                       Northland Forest Products

    Mr. Chairman, Members of the Subcommittee, I am Jameson French, 
President and CEO of Northland Forest Products, a hardwood lumber 
processor, exporter and distributor based in New Hampshire with 
operations in Virginia. My family has been in the hardwood lumber 
business since the late 1800s. I am here before you today to represent 
the views of both my company and as a member of the Hardwood 
Federation, the largest hardwood industry trade association, 
representing thousands of hardwood businesses in every state in the 
country. Companies in the hardwood industry are predominantly small 
family-owned businesses dependent upon a sustainable supply of healthy 
timber resources, both imported and domestically sourced. They serve 
not only the domestic market, but a strong and growing export market. 
The Federation and its members believe it is critical to keep American 
companies operating and our citizens employed by protecting forest 
resources and increasing consumer demand for hardwood products, and 
assuring fair competition worldwide.
    The Hardwood industry includes many multi-generational families 
that care deeply about long term healthy and sustainable forests, 
whether in North America or around the world. Without forests there 
will be no forest industry, let alone forests that pull and sequester 
carbon from the atmosphere, provide recreational activities and give 
shelter and habitat to wildlife.
    A strong forest products industry supports healthy and valuable 
forests. In 2012, the U.S. Department of Agriculture Forest Service 
released a study showing the correlation between an active forest 
products industry and expanding forests in areas of the world with the 
most active forest products industries, including North America, 
Northern Europe and Scandinavia. The Lacey Act is a valuable tool for 
the Hardwood industry in terms of both creating healthy and sustainable 
forests and supporting the U.S. forest products industry.
    I think it is also important to note that the U.S. is held in high 
esteem around the world for taking the first step in addressing this 
global problem. Now, there is a growing movement around the world as 
others follow our work to reduce illegal logging: The European 
Commission estimates that 19% of lumber imports to the European Union 
are illegally sourced. The European Union, as well as other countries, 
are viewing this as a serious problem and also enacting Lacey-type laws 
to address sourcing. Some key examples include:

      The European Union passed their Timber Regulation in 2010 
and fully implemented it in March of 2013;
      The Australia passed the Illegal Logging Prohibition Act 
and the government has committed $1 million to work with regional 
governments and industry on a number of measures to combat illegal 
logging;
      The Philippines is also ramping up their enforcement 
against illegal logging.

    The Hardwood Federation was the first industry group to recognize 
illegal logging as a serious threat. We were one of the first 
associations along with 49 other trade associations, non-profits and 
unions that supported passage of the Lacey Act Amendments as part of 
the 2008 Farm Bill. We did so for reasons that were both environmental 
and economic. Purveyors of illegally harvested timber have the 
potential to inundate our markets with products priced at levels that 
are simply out of reach for U.S. producers. In fact, illegal logging 
costs our industry billions of dollars each year by suppressing global 
prices by as much as 16 percent. By putting law-abiding U.S. producers 
at a competitive disadvantage, illegal logging costs us real jobs here 
in America.
    Simply stated, the case for bolstering the century-old Lacey Act to 
address illegal logging was so compelling that the 2008 amendments were 
enacted under the Bush administration with strong bipartisan 
congressional support. The U.S. Forest products industry is a 
considerable economic force. The amendments were passed after public 
hearings and extensive negotiations among affected parties. The U.S. 
importing companies we represent are willingly bearing the costs of 
complying with the Lacey Act and applaud the U.S. government agencies 
such as the USDA Animal and Plant Health Inspection Service for 
implementing an effective program of compliance given minimal 
resources.
    The industry produces approximately $200 billion in products 
annually and employs nearly 900,000 men and women in good paying jobs. 
The industry meets a payroll of approximately $50 billion annually and 
is among the top 10 manufacturing sector employers in 47 states. Our 
industry, like others, has been challenged over the last few years by 
economic and regulatory uncertainties. However, there are key benefits 
we are realizing since the passage of Lacey.
    First, it is important to note that the U.S. has the largest supply 
of sustainable, legally sourced hardwoods in the world. With a growing 
emphasis on worldwide enforcement against illegal practices worldwide, 
American hardwoods have benefited as the preferred choice.
    Market forecasts show that the legality movement, which was 
prompted by enactment of Lacey, will reduce wood supplies from 
countries where there is a significant risk of illegal logging. Recent 
statistics show that this heightened awareness around the world is 
providing a real opportunity for legal operators in the United States.

      U.S. hardwood lumber exports in 2012 were at their 
highest ever level last year, at $1.6 billion;
      In 2008, the U.S. share of global hardwood lumber trade 
was 13 percent. Since that time--coinciding with enactment of Lacey--
that share has steadily grown and in 2012, reached 20% for the first 
time;
      Over the last four years, U.S. hardwood lumber exports 
have risen by more than 70%;
      During the same period exports from all other leading 
hardwood lumber producing countries, with the sole exception of 
Thailand, have been flat or declining;
      In 2012, China's trade statistics record a 5% increase in 
imports of U.S. hardwood lumber while imports of hardwood lumber from 
all other sources declined by 6%;
      In 2012, U.S. hardwood lumber export value was more than 
double that of Malaysia ($790 million), the world's second largest 
exporter of hardwood lumber.

    In addition to these macroeconomic figures, I would like to share a 
few examples of how the Lacey Act has helped some small businesses in 
my industry:

      Tom Talbot, the CEO of Glen Oak Lumber and Milling in 
Montello, Wisconsin notes that in the last 2\1/2\ years, his business 
in American basswood window products has soared. The increase is 
directly attributable to national distributors' demand for legally 
sourced wood and accurate documentation.
      Orn Gudmundsson, President of Northland Corporation 
hardwoods based in Kentucky states ``As a wood importer myself, I do 
not believe the Act imposes undue burdens on us, nor does it seek to 
stop the use of imported wood or wood products. Furthermore the 
inclusion of wood in the Lacey Act has had an enormously positive 
impact on U.S. hardwood lumber exports. Manufacturers overseas are 
increasingly relying on U.S. hardwood lumber, due in part to our 
reputation for legally sourced and sustainable timber. Many Southeast 
Asian manufacturers who wish to avoid wood from questionable sources 
have increasingly turned to U.S. hardwoods. About 50% of my company's 
exports to Southeast Asia are probably returned to the U.S. as finished 
or semi-finished product. If we abolished the Lacey Act these 
manufacturing jobs would not magically reappear in the U.S. rather the 
U.S. lumber they are made from would be likely replaced by illegal 
local wood.''

    As a member of the Hardwood Federation and a representative of the 
ten thousand (10,000) businesses we represent, I urge Congress to allow 
the Lacey Act to be fully implemented. We currently await the 
interagency report to Congress on aspects of Lacey Act implementation, 
enforcement and its effectiveness. In the meantime, we recommend that 
Congress provide full funding for Lacey Act implementation so that 
computer systems and other critical infrastructure needed to make this 
law fully effective are in place. We strongly oppose Congressional 
actions aimed at re-opening the statute and diminishing enforcement.
    It is important to note that delivering on Lacey Act objectives is 
not a process without growing pains as the private sector and the 
government learns from each other about implementation realities. That 
is why 57 industry trade associations and environmental groups, 
including the Hardwood Federation, the International Wood Products 
Association, the American Forest and Paper Association, the National 
Association of Manufacturers and the National Retail Federation signed 
onto a consensus statement recommending areas to streamline and enhance 
implementation that can be made administratively to the Lacey Act. We 
look forward to continuing to work with our co-signers and the 
Administration on these technical fixes.
    The increased awareness of the need for transparency, risk 
management and legal sourcing is precisely the intent of the Lacey Act. 
This law is important for protection of the environment and the 
competitiveness of the U.S. forest products industry. This Act promotes 
our ability to maintain a growing consumer demand for a U.S. 
sustainable supply of healthy timber resources which in turn supports 
local economies situated in predominantly in rural areas across this 
great nation.
    Thank you for your consideration of our industry's perspective on 
this issue. The Lacey Act is critical to U.S. hardwood jobs and we urge 
the Committee to assure that the statute is allowed to continue to be 
fully implemented as originally envisioned.
                                 ______
                                 
    Dr. Fleming. Thank you, Mr. French.
    The Chair now recognizes Mr. Marcus Asner for 5 minutes to 
provide his perspective on the 2008 Lacey Act amendments.

 STATEMENT OF MARCUS A. ASNER, PARTNER, ARNOLD AND PORTER, LLP

    Mr. Asner. Thank you, Mr. Chairman. I have been involved 
with the Lacey Act for over a decade, both as a Federal 
prosecutor, when I handled one of the largest Lacey Act cases 
in history, and now, in private practice, when companies come 
to me for advice on how to comply with the Lacey Act.
    I think that everybody in this room agrees that illegal 
logging and illegal trade is bad for America and it is bad for 
the world. It hurts legitimate U.S. companies and it hurts 
consumers. It harms the environment and let's don't forget it 
hurts victims. Illegal logging and trade impinges on the rights 
of property owners, the very people and States whose trees were 
stolen.
    The Lacey Act is a key weapon in the fight against illegal 
logging and illegal trade. It protects victims of crime. It 
helps fight corruption, it promotes the rule of law, and it 
enhances our national security. And it helps level the playing 
field for American companies. And that ends up protecting 
American jobs.
    Now, some of the witnesses, in their testimony today and in 
their written testimony, talked about due care. The Lacey Act 
due care standard is crucial. Companies are in the best 
position to police their own supply chains, and they need the 
freedom to do that. As Mr. McCreary points out, Lacey has led 
companies like Collings Guitar to review their compliance 
programs. They drop risky suppliers, and they deal with 
legitimate vendors. But let's be clear, there is nothing new 
about due care, even in the wood industry. And as a consumer, I 
frankly expect that legitimate companies will sell me legal 
wood and legal paper. I don't, frankly, think that is too much 
to ask. In fact, in my view, Lacey helps legitimate companies--
like yours, sir--because it makes sure that corrupt or 
indifferent companies play by the same rules.
    Now, some of the witnesses have suggested that an innocent 
owner defense to forfeiture should be enacted, and I have a 
problem with that. I think it is inconsistent with widely used 
Federal forfeiture procedures. I think it also has a tendency 
to undercut the current effect of the Act and, more 
importantly, it undercuts the fundamental property rights of 
the victims of illegal logging.
    One of the witnesses suggested that wood can get forfeited 
without any due process, apparently using Gibson as an example. 
But that is just flat wrong. It is not the law, and that is not 
what happened in Gibson. That is something that we explained at 
length in a BNA article that I had submitted for the record. 
But let me be blunt about this. Everybody gets their day in 
court. And suggestions to the contrary, relying on Gibson, are 
just flat wrong.
    Now, don't get me wrong. I am very sensitive to the fact 
that forfeiture laws, at least in theory, can lead to harsh 
results. But I think that the Lacey Act deals with that 
already. There is an explicit procedure in the Act called the 
remission procedure, that is specifically designed to handle 
those cases.
    Now, I also disagree with some of the statements made about 
foreign law. We all deal with foreign law all the time. And 
Lacey is clear. It talks about six specific types of plant-
related offenses. So any statement that a speeding violation 
somehow qualifies as a Lacey Act offense is just flat wrong. 
That is not the law.
    Now, there was a mention earlier about the Honduras lobster 
case. And there is a suggestion that it was somehow improper. 
But any suggestion that people like David McNab, who was at the 
center of that, went to jail for some technicality is, again, 
flat wrong. McNab was a criminal. He was guilty of violating 
Lacey, he was guilty of smuggling, he was guilty of money 
laundering. He engaged in a massive scheme to smuggle over 1.6 
million pounds of illegal lobster into the United States. And 
that has a devastating effect, including a devastating effect 
on the population in Florida.
    Legitimate companies in every industry, not just wood, 
already make sure they buy and sell legal goods. And companies 
have been navigating foreign laws forever. Businesses are in 
the best position to ask the relevant questions and to make 
sure that goods are legal, and they are also in the best 
position to protect themselves by demanding their suppliers 
warranty and guarantee the wood they are supplying.
    A final point. Some say the declaration requirement is 
burdensome. But I think it actually forces importers to examine 
the supply chains and to ask the right questions. And I was 
very cheered by some of the comments that people from--the 
woman from APHIS said today, that they are working through some 
of the hiccups. But as a former law enforcement person, I think 
it also helps law enforcement fight illegal logging.
    So, let me be clear. The Lacey Act is clear to me. It helps 
fight crime, it helps protect American companies and jobs. It 
protects victims. And it promotes the rule of law and helps 
protect national security.
    Thank you for your time, and I would be happy to address 
any questions you have.
    [The prepared statement of Mr. Asner follows:]

          Statement of Marcus A. Asner, Arnold and Porter LLP

Introduction
    Mr. Chairman, Ranking Member, and members of the Subcommittee on 
Fisheries, Wildlife, Oceans and Insular Affairs, thank you for inviting 
me to appear before the Subcommittee today to address the topic of the 
2008 Amendments to the Lacey Act.
    I am a partner in the New York office of Arnold & Porter LLP where 
I routinely advise companies on Lacey Act and other environmental and 
criminal matters. Although I am advising several clients on legal 
matters relating to the Lacey Act, I am appearing today in my personal 
capacity and not on behalf of Arnold & Porter or any client.
    For nine years (2000-2009), I served as an Assistant United States 
Attorney (AUSA) in the Southern District of New York where I was Chief 
of the Major Crimes Unit from 2007 to 2009. When I was an AUSA, I led 
the investigation and prosecution of United States v. Bengis, one of 
the largest Lacey Act cases in history, involving the smuggling of 
massive quantities of illegally harvested rock lobster from South 
Africa. Since I joined Arnold & Porter in 2009, I have counseled 
clients on a wide variety of Lacey Act issues, including assisting 
clients in complying with the 2008 Amendments. I have written 
extensively on the Lacey Act, and I have been invited to speak at 
numerous domestic and international meetings concerning environmental 
crime. In the past year or so, for example, I have spoken on Lacey Act 
issues at the World Fisheries Conference, the Forest Legality Alliance, 
INTERPOL, and the Boston Seafood Show.
    Today, I will explain my thoughts on how the 2008 Lacey Act 
Amendments have contributed to reducing the international trade in 
illegal plants and plant products, and in the process have served 
American businesses and consumers and helped the environment. I also 
will address some of the concerns raised by critics of the 2008 
Amendments.
Discussion
    The 2008 Lacey Act Amendments prevent illegal plants and plant 
products from flooding the U.S. market, disrupt criminal organizations, 
and reduce corruption in foreign countries, which in turn levels the 
playing field for legitimate businesses and improves our national 
security. The Lacey Act supports U.S. consumers who have an interest in 
a sustainable supply of natural resources and in worldwide ecological 
health, which plays a key role in U.S. and worldwide economic and 
social stability. It also protects the victims of environmental crimes.
    I want to emphasize upfront that I am well aware of the challenges 
companies face as they determine how to meet the requirements of the 
Lacey Act, and understand both sides of the debate over how best to 
shape Lacey Act requirements. I regularly advise clients in various 
industries, so I know firsthand that compliance can be challenging, 
especially at first, and especially for small businesses with limited 
resources seeking to navigate foreign legal systems. Companies that 
never before had to concern themselves with issues of provenance in 
their supply chains now are having to develop compliance programs to 
make a good faith effort to ensure that the goods they bring to the 
United States are legal.
    Despite the challenges faced by lawful importers, I believe that 
the Lacey Act is a vital enforcement tool that protects U.S. interests 
in the aggregate. From my perspective as someone who has been involved 
in Lacey Act enforcement and compliance for over a decade, the 2008 
Amendments are serving U.S. and global interests by helping to reduce 
the trade in illegal wood and wood products.
    Moreover, in my experience from the last few years, companies are 
overcoming the challenges, setting up compliance programs, and learning 
to become more adept at complying with the 2008 Amendments to the Lacey 
Act. That companies are becoming better at compliance does not surprise 
me. In other areas, United States companies long have faced laws that 
regulate overseas behavior. Seafood importers have had to comply with 
the Lacey Act for decades, and many U.S. companies have to deal with 
Committee on Foreign Investment in the United States (CFIUS) 
regulations and the Foreign Corrupt Practices Act. Experience in these 
other areas teaches that complying with new laws and regulations can be 
burdensome at first, but that, over time, companies learn and become 
better at working within the new regulatory framework.
Benefits of the 2008 Lacey Act Amendments
    Passed in 1900, the Lacey Act is the United States' oldest wildlife 
protection law. Its original goals were to address issues including the 
interstate shipment of unlawfully killed game, the introduction of 
harmful invasive species, and the killing of birds for the feather 
trade. The Act has been amended several times and broadened to combat 
trafficking in illegal wildlife, fish, and--as of 2008--plants and 
plant products. During its long tenure, the Lacey Act has been 
successful in the areas of wildlife and fish. In light of the enormous 
problems of illegal logging and unsustainable harvesting, along with 
the related human toll (such as the toll of corruption and forced 
labor) and environmental impacts (such as deforestation, destruction of 
biodiversity, wildlife displacement, erosion, climate change, and loss 
of local livelihood), the 2008 addition of protections for plants and 
plant products was a natural and welcome extension of the Act.
    The Lacey Act is an important tool for law enforcement in the 
ongoing effort to combat sophisticated criminal organizations and to 
protect legitimate businesses and U.S. consumers. Lacey Act 
prosecutions have been used to disrupt large-scale criminal 
organizations with illegal behavior extending beyond fish, wildlife, 
and plant violations. When I was a prosecutor, I experienced firsthand 
how the Lacey Act can be used as a tool to (1) dismantle criminal 
operations and deter illegal activities that are having economic and 
environmental impacts; (2) protect U.S. interests; and (3) protect the 
victims of environmental crimes. I will discuss each of these benefits 
in turn.
Dismantle Criminal Operations and Deter Illegal Activities
    I first became involved with the Lacey Act around 2002 when I 
started working on the investigation of the Bengis international 
criminal organization. The Bengis organization engaged in a massive 
scheme to smuggle into the United States and sell to U.S. consumers (at 
a significant profit) rock lobster that had been illegally harvested in 
South Africa. The scheme, which spanned over a decade, had a 
devastating impact on the South African rock lobster population. The 
Bengis scheme involved (among other things) numerous violations of 
South African fishing and customs laws, bribery of South African 
fisheries inspectors, submission of false shipping documentation, 
smuggling of contraband into the United States, sale of illegal seafood 
to U.S. consumers, circumvention of U.S. immigration laws, spoliation 
of evidence, and the use of United States banks to transfer criminal 
proceeds. The United States and South Africa worked together closely on 
the investigation and prosecutions, which ultimately led to the 
dismantling of the Bengis organization. In the United States, five 
members of the organization were arrested; all ultimately pleaded 
guilty and the main players were sentenced to prison. The defendants 
also forfeited $7.4 million to the U.S. In 2011, the Court of Appeals 
for the Second Circuit ruled that South Africa is a victim entitled to 
restitution for the defendants' crimes, and in 2012, a magistrate judge 
in the Southern District of New York recommended that South Africa be 
awarded $54.9 million in restitution from the defendants.
    The Bengis case provides just one example of how the Lacey Act can 
serve as a powerful enforcement tool in the fight against criminal 
activity in cases where actors import into the United States illegal 
goods covered by the Act. It is important to remember, however, that 
the Lacey Act also protects innocent actors. A person who innocently 
imports illegally harvested wood is innocent under the Lacey Act.\1\ 
She only would be guilty of a felony if she actually knew the wood was 
illegal.
---------------------------------------------------------------------------
    \1\ Of course, the fact that the person is innocent in this example 
does not change the fact that the wood in fact was stolen. Under well-
established U.S. property law, stolen property ordinarily will be 
returned to the rightful owner, even if the person possessing the wood 
is innocent.
---------------------------------------------------------------------------
    In cases where a person, in the exercise of due care, should have 
known that wood she imported had been stolen, the Lacey Act establishes 
a middle ground--a misdemeanor. In my experience, misdemeanor 
prosecutions under the Lacey Act are rare. Prosecutors typically focus 
their limited resources on more serious felony investigations and 
prosecutions. In this, as in any other lawful industry, legitimate 
businesses and law-abiding citizens understandably take pains to ensure 
that they are buying legal goods, whether those goods are wood, 
seafood, wildlife, or some other commodity such as food, diamonds, or 
electronics. It is in this respect that the due care standard in the 
Lacey Act serves an important role in reinforcing lawful behavior, and 
in leveling the playing field between legitimate companies that invest 
resources to try hard to do the right thing, and companies that are 
utterly indifferent to whether the goods they are importing and 
supplying to the American consumer are legal or illegal.
    I am sensitive to the fact that some companies find the due care 
standard to be confusing and would prefer that ``due care'' be defined 
using a checklist or a set of bright line rules that would apply across 
all fact patterns and industries. While I understand why these comments 
are being made, I believe that much of the anxiety about the due care 
standard is misplaced. Legitimate companies in a wide variety of 
industries routinely exercise due care in policing their supply chains, 
because they take seriously the goal of providing consumers with legal 
goods. In my view, the flexible ``due care'' standard is actually 
better for companies because it enables them to mitigate risk in ways 
that are appropriate for their particular operations and supply chains. 
Moreover, there is nothing particularly new about the due care 
standard. Like the similar ``reasonable person'' standard relied upon 
elsewhere in U.S. law, the due care standard is a necessary and common 
element in the American legal system, arising in a wide variety of 
situations, ranging from the concepts of negligence in tort law, to 
negligence-based Clean Water Act violations. The Lacey Act's due care-
based standard has functioned effectively for many years. In fact, 
seafood importers have been working with the due care standard under 
the Lacey Act ever since 1969.
    Requiring that companies exercise ``due care'' in selecting and 
managing their imports plays a significant role in deterring illegal 
activity. The standard places the responsibility on law-abiding 
companies to take a critical look at and understand their own supply 
chains, and it also prevents unscrupulous companies from devising ways 
to circumvent, perhaps through technicalities, any due care 
``checklist'' or bright line rules that otherwise might be devised. In 
my own practice, I often counsel clients on ways to create their own 
compliance programs, so they can make a good faith effort to ensure 
that their supply chains are legal and can demonstrate due care in 
those efforts. The Compliance Program outlined in the Gibson Guitar 
Criminal Enforcement Agreement has provided a useful model, and various 
industries are creating their own models from which individual 
companies can draw. In circumstances where they deem additional 
protections are needed, clients are further protecting themselves by 
demanding and obtaining warranties and indemnification from their 
suppliers. These are good developments. As a result of the 2008 Lacey 
Amendments, I find that companies increasingly are focused on actively 
monitoring their own supply chains and creating compliance programs 
that enable them to ensure that the paper, lumber, and other plant 
products they supply to the American consumer come from legal sources. 
This is transforming a market in which honest, legitimate companies 
(who worked hard to ensure the legitimacy of their supply chains) 
previously were at a competitive disadvantage to companies who were 
allowed to get away with a ``no questions asked'' approach to the 
legality of their supply.
    Nor is the focus on supply chains limited to the Lacey Act. Supply 
chain due diligence increasingly has become a priority for companies in 
all sectors. In addition to the health and safety and counterfeiting 
issues with which we are all familiar, and the conservation and law 
enforcement goals of the Lacey Act and similar enactments, Congress has 
acted repeatedly since the 2008 Lacey Act amendments to require more 
transparency in supply chain issues. For example, there have been new 
statutory and regulatory requirements to prevent U.S. Government 
contractors from using human trafficking victims when performing 
government contracts.
Protect U.S. Interests and Reduce Corruption
    According to a 2012 UNEP and INTERPOL report, ``illegal logging 
accounts for 50-90 per cent of the volume of all forestry in key 
producer tropical countries and 15-30 per cent globally. Meanwhile, the 
economic value of global illegal logging, including processing, is 
estimated to be worth between U.S. $30 and U.S. $100 billion, or 10-30 
per cent of global wood trade.'' \2\ Not only is the U.S. one of the 
world's leading producers of products like wood flooring and hardwood 
plywood, but it is also one of the largest consumers.\3\
---------------------------------------------------------------------------
    \2\ UNEP and INTERPOL, Green Carbon, Black Trade: Illegal Logging, 
Tax Fraud and Laundering in the World's Tropical Forests (2012), 
available at http://www.unep.org/pdf/RRAlogging_english_scr.pdf.
    \3\ USITC, Wood Flooring and Hardwood Plywood: Competitive 
Conditions Affecting the U.S. Industries at 1-1 (Aug. 2008), available 
at http://www.usitc.gov/publications/332/pub4032.pdf.
---------------------------------------------------------------------------
    The mere presence of illegally procured wood in the international 
marketplace affects the competitiveness of legitimate U.S. producers. 
The United States' GDP of timber-related manufacturing was valued at 
$77 billion in 2009.\4\ According to a 2004 report, illegal logging 
depresses U.S. prices by about 2-4% which translates to about $1 
billion in annual losses to the U.S. market from lower prices and 
reduced market share.\5\ Evidence presented in the Bengis case revealed 
that illegal operations are able to sell larger quantities of goods at 
lower prices than their legitimate competitors.\6\ This illegal 
advantage in turn adversely affects competitors' business and customer 
relations. Meanwhile, overharvesting activities seriously affect the 
worldwide and U.S. market's supply. As a result, any reduction in 
market price in the short-term due to the influx of illegal goods is 
short-lived, and prices will increase in the long-term as supply is 
depleted due to unsustainable practices. By reducing the amount of 
illegally harvested wood and other plant products in the international 
marketplace, the Lacey Act benefits U.S. companies and consumers. By 
reducing the demand for illegal and unsustainably harvested goods, the 
Act also helps to protect the global supply of natural resources upon 
which American consumers depend.
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    \4\ U.S. Census Bureau, Statistical Abstract of the United States 
at 563 (2012) (Table 883), available at http://www.census.gov/
compendia/statab/2012edition.html.
    \5\ Seneca Creek Associates, LLC and Wood Resources International, 
LLC, ``Illegal'' Logging and Global Wood Markets: The Competitive 
Impacts on the U.S. Wood Products Industry at ES-2, 26 (Nov. 2004), 
available at http://www.illegal-logging.info/uploads/afandpa.pdf; 
Pervaze A. Sheikh, Cong. Research Serv., R42119, The Lacey Act: 
Compliance Issues Related to Importing Plants and Plant Products 12 
(2012), available at http://www.fas.org/sgp/crs/misc/R42119.pdf.
    \6\ Government's Memorandum of Law in Opposition to Defendants' 
Joint Motion for a Departure from the Applicable Sentencing Guidelines 
Range at 15-17, United States v. Bengis, No. 1:03-cr-00308-LAK 
(S.D.N.Y. May 26, 2004).
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    The Lacey Act also helps reduce corruption and promote the rule of 
law in foreign countries, which in turn helps to level the playing 
field for U.S. companies and enhances our national security. There is a 
close link between corruption and natural resources crime. In his 
Statement for the Record on the 2012 Worldwide Threat Assessment of the 
U.S. Intelligence Community, the Director of National Intelligence 
included ``environmental crime'' in the list of ways in which 
transnational organized crime threatens U.S. national interests:

        Illicit trade in wildlife, timber, and marine resources 
        constitutes a multi-billion dollar industry annually, endangers 
        the environment, and threatens to disrupt the rule of law in 
        important countries around the world. These criminal activities 
        are often part of larger illicit trade networks linking 
        disparate actors--from government and military personnel to 
        members of insurgent groups and transnational organized crime 
        organizations.\7\
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    \7\ Statement for the Record on the Worldwide Threat Assessment of 
the US Intelligence Community, Before the S. Select Comm. On 
Intelligence, 113th Cong. 5-6 (2013) (statement of James R. Clapper, 
Director of National Intelligence, available at http://
www.intelligence.senate.gov/130312/clapper.pdf. The Statement also 
noted that ``[t]ransnational organized crime (TOC) networks erode good 
governance, cripple the rule of law through corruption, hinder economic 
competitiveness, steal vast amounts of money, and traffic millions of 
people around the globe.'' Id. at 5.

    The U.N. Office on Drugs and Crime's report, Illegal Logging in 
---------------------------------------------------------------------------
Indonesia: The Link Between Forest Crime and Corruption, notes:

        Illegal logging [in Indonesia] relies on corruption to stay in 
        business. It depends on the complicity of officials throughout 
        the entire production chain from forest to port, including 
        forest rangers, local government, transport authorities, police 
        and customs. Organized criminal groups are involved in 
        transporting illegal timber, as well as endangered species, out 
        of the country and across multiple borders . . .

        Environmental crime, such as this illegal logging in Indonesia, 
        is becoming increasingly organized and transnational in nature 
        and can be seen, just as drug and firearm trafficking, as one 
        of the most significant areas of transborder criminal activity, 
        threatening to disrupt societies and hinder sustainable 
        development.\8\
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    \8\ U.N. Office on Drugs and Crime, Illegal Logging in Indonesia: 
The Link Between Forest Crime and Corruption (2010), available at 
http://www.unodc.org/unodc/en/frontpage/2010/June/illegallogging-in-
indonesia-the-link-between-forest-crime-and-corruption.html.

    Corruption related to environmental crimes presents a threat to the 
United States' interests generally, and to U.S. companies specifically. 
By providing an enforcement tool for federal prosecutors on the one 
hand and encouraging the creation of compliance programs that help 
identify issues in the supply chain on the other, the Lacey Act helps 
to reduce the specter of corruption, and ultimately fosters an 
environment favorable to legitimate American businesses.
Protect Victims of Environmental Crimes
    Penalties under the Lacey Act protect victims by deterring the 
theft of fish, wildlife, and plants and plant products. Moreover, just 
as property laws protect owners' rights by requiring the return of 
stolen art or an autographed baseball stolen from your home, the Lacey 
Act protects the rights of victims of illegal harvesting and trade, 
whether such victims are in the U.S. or abroad.
    The Lacey Act helps ensure that victims of Lacey Act crimes receive 
compensation. If someone snuck onto my land in Irving, Texas, cut down 
my trees, and then sold them to an unwitting buyer in Oklahoma, I would 
want my trees back, even if the gentleman in Oklahoma had purchased the 
timber innocently. The Lacey Act provides a mechanism by which I could 
get my trees back and the trespassing thieves could be prosecuted. When 
coupled with a charge of conspiracy under Title 18, the Lacey Act 
supports compensation to victims in the form of restitution under 18 
U.S.C. Sec. Sec. 3663 & 3663A. The Bengis case illustrates this point. 
The Court of Appeals ruled in that case that South Africa should be 
awarded restitution as compensation for the lobster stolen as part of 
the scheme. By protecting the property rights of victims of 
environmental crimes, the Lacey Act provides justice to victims and 
deters future criminal activity. I will discuss this aspect of the 
Lacey Act further below in connection with the discussion of the 
``innocent owner'' defense.
Responses to Concerns
    I am aware of a number of concerns that have been voiced about the 
Lacey Act, many of which appeared in the various changes that were 
proposed last year in the Retailers and Entertainers Lacey 
Implementation and Enforcement Fairness Act. The RELIEF Act, among 
other things, would have altered the Lacey Act's forfeiture provision 
to include an ``innocent owner'' defense, removed or limited some of 
the Act's provisions for plants and plant products imported before 
2008, narrowed the categories of foreign laws that trigger violations 
and modified the declaration requirements. I am sympathetic to the 
challenges that legitimate businesses, particularly small companies, 
face in complying with the Lacey Act, especially when they are 
operating in foreign countries with unfamiliar legal systems. I expect 
that some of the same concerns may be raised in this hearing, so I 
would like to focus on some of these proposals in my testimony today.
Forfeiture and the Proposed ``Innocent Owner'' Defense
    According to press reports, following the well-publicized seizures 
of wood at Gibson Guitar's facilities, a common complaint was that 
Gibson's wood was seized and held even though Gibson purportedly had 
not ``had its day in court to defend itself,''\9\ and that Gibson was 
the victim of an abuse of governmental power. However, as my co-authors 
and I explained in an article published in Bloomberg BNA's Daily 
Environment Report, if you look at the law and what happened in the 
Gibson proceedings, it becomes clear that Gibson in fact did have its 
day in court, exactly as contemplated in the law.\10\ In addition, 
based on the facts that emerged, Gibson had illegally imported highly 
protected wood, ignoring the results of their own due diligence, and 
the actions taken by the government in response were reasonable.\11\ 
Gibson is therefore a prime example of the proper functioning of the 
Lacey Act. The Gibson case aside, however, a more fundamental point is 
that adding an innocent owner defense to the Lacey Act would be 
inconsistent with widely-used federal forfeiture procedures, would 
undermine the deterrent effect of the provisions, and potentially would 
defeat the fundamental property rights of the victims of environmental 
crimes. If such an amendment were to be enacted, those in possession of 
stolen wood would have unique rights to keep that wood despite the 
illegality of its procurement, which is fundamentally at odds with the 
law that applies across the board in other stolen property contexts.
---------------------------------------------------------------------------
    \9\ Tina Korbe, Video: The Great Gibson Guitar Raid. . .Months 
later, still no charges, Hot Air (Feb. 23, 2012, 3:40 PM), http://
hotair.com/archives/2012/02/23/video-the-great-gibson-guitar-raid-
months-later-still-no-charges/; see also John Roberts, Gibson Guitar 
Case Drags On With No Sign of Criminal Charges, FoxNews.com (Apr. 12, 
2012), http://www.foxnews.com/us/2012/04/12/gibson-guitar-case-drags-
on-with-no-sign-criminal-charges/.
    \10\ Marcus A. Asner, Maxwell C. Preston and Katherine E. Ghilain, 
Gibson Guitar, Forfeiture, and the Lacey Act Strike a Dissonant Chord, 
Bloomberg BNA's Daily Environment Report (also published in the Daily 
Report for Executives, White Collar Crime Report, and the International 
Environment Reporter) (Sept. 4, 2012), available at http://
www.arnoldporter.com/resources/documents/
Arnold&PorterLLP.BloombergBNA%27sDailyEnvironmentReport_090412.pdf.
    \11\ Criminal Enforcement Agreement Between U.S. Dep't of Justice 
and Gibson Guitar Corp. (July 27, 2012), available at http://
www.fws.gov/home/feature/2012/USvGibsonGuitarAgreement.pdf.
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            Seizure and Forfeiture Under the Lacey Act
    It is well settled that the federal government may seize property 
upon a showing of probable cause that the property is illegal. The 
process is straightforward. Someone who believes that her property has 
been wrongfully seized may file a motion in federal court asking the 
court to review the evidence and determine whether the property is 
contraband or should be returned.\12\ Even if that person does not 
pursue the return of the seized property in this manner, the government 
generally must follow a formal forfeiture process in order to keep it. 
Goods seized pursuant to the Lacey Act may fall into one of two 
categories of contraband. Those involving violations of procedural 
requirements, such as failing to obtain proper permits, are considered 
``derivative contraband.'' On the other hand, those for which 
possession or exportation is banned are considered ``contraband per 
se.''\13\ For example, a country like Madagascar bans the harvest of 
ebony and the export of any ebony products in unfinished form except 
when the supplier has special authorization from the government. In 
that situation, unfinished Malagasy ebony seized from someone in the 
United States who imported that ebony from a supplier who did not have 
that special authorization is contraband per se.
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    \12\ Specifically, the person seeking the return of their property 
may file a motion in federal court pursuant to Rule 41(g) of the 
Federal Rules of Criminal Procedure. See United States v. 144,744 
Pounds of Blue King Crab, 410 F.3d 1131 (9th Cir. 2005) (holding that 
goods seized under the Lacey Act are contraband).
    \13\ See Helton v. Hunt, 330 F.3d 242, 247 (4th Cir. 2003) (citing 
One 1958 Plymouth Sedan v. Pennsylvania, 380 U.S. 693, 699-700 (1965), 
and quoting Cooper v. City of Greenwood, 904 F.2d 302, 305 (5th Cir. 
1990); see also Conservation Force v. Salazar, 677 F. Supp. 2d 1203, 
1210-11(N.D. Cal. 2009).
---------------------------------------------------------------------------
    The forfeiture procedures that apply to goods seized under the 
Lacey Act are the same Civil Asset Forfeiture Reform Act (CAFRA) 
procedures that govern forfeiture actions under a wide variety of 
laws.\14\ The government must provide notice and an opportunity for a 
hearing at which the forfeiture may be contested. If the party fails to 
timely respond, the property is deemed administratively forfeited. If 
the party elects to file a claim within the 60-day period, the 
government must commence judicial forfeiture proceedings, during which 
the party may present evidence and argue that the property should be 
returned.\15\ The government must demonstrate by a preponderance of the 
evidence that the property is subject to forfeiture,\16\ and that the 
government had probable cause to believe that the property was subject 
to forfeiture in the first place.\17\ These procedures were followed in 
Gibson, and normal forfeiture proceedings in federal court were ongoing 
when the Criminal Enforcement Agreement was reached.
---------------------------------------------------------------------------
    \14\ 18 U.S.C.A. Sec. 983.
    \15\ See 18 U.S.C.A. Sec. 938(a)(3), (a)(4)(A) (contemplating 
claims pursuant to Supplemental Rules); Fed. R. Civ. P. Supplemental 
Rule G(5).
    \16\ See 18 U.S.C.A. Sec. 983(c)(1).
    \17\ See 19 U.S.C.A. Sec. 1615.
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    In addition to this judicial avenue of challenge, the law provides 
an administrative appeal process whereby a party can appeal directly to 
the agency that seized the goods, seeking remission or mitigation of 
forfeiture.\18\ Under the Fish and Wildlife Service's regulations, for 
example, a party may file a petition seeking remission or mitigation of 
administrative forfeiture with Solicitor of the Department of 
Interior.\19\ If the Solicitor finds that there are sufficient 
``mitigating circumstances,'' the Solicitor may remit or mitigate the 
forfeiture upon reasonable terms and conditions.\20\ As a result, not 
every contested seizure will require the involvement of federal courts.
---------------------------------------------------------------------------
    \18\ See 16 U.S.C.A. Sec. 3374(b).
    \19\ 50 C.F.R. Sec. 12.24.
    \20\ 50 C.F.R. Sec. 12.24(f).
---------------------------------------------------------------------------
            Innocent Owner Defense
    Some have suggested including an ``innocent owner'' defense to 
forfeiture. Proponents have argued that companies that unknowingly 
possess illegally harvested wood should be able to obtain the return of 
that illegal wood (regardless of its legality) because they were 
unaware, despite exercising due care, that the wood was illegal. While 
I am sympathetic to the truly innocent owner in such a situation and 
recognize that some importers could face forfeiture under difficult 
circumstances, I am also sympathetic to crime victims. I am concerned 
that such a defense would not only undermine the effectiveness of the 
Lacey Act, but it also would be inconsistent with basic U.S. property 
principles.
    My concern is that providing an innocent owner defense for the 
purchaser or importer of illegal goods and allowing the ``innocent 
owner'' to keep what is not lawfully hers not only decreases companies' 
incentives to ensure that their goods are legal, but it also deprives 
lawful owners of their right to have their property returned. If a 
thief steals my autographed baseball and sells it to an innocent 
collector who has no idea that it was stolen, that does not change the 
fact that it is still my baseball and I have a right to get it back. 
The illegal intervening activity does not extinguish my property right 
in the baseball. We naturally feel sorry for the collector, of course, 
who was duped into buying the baseball from the thief, but that does 
not mean he should get to keep my baseball; instead, his recourse is to 
seek compensation from the thief and make sure that he has a valid 
supplier next time. The same concept applies to goods imported in ways 
that violate the Lacey Act. The individuals, states, or countries whose 
resources have been illegally obtained have a right to the return of 
their property or to monetary compensation for property that was lost. 
The intervening illegal activity does not extinguish those property 
rights, regardless of who knew what along the way. It is the importer's 
responsibility to know its suppliers and put measures in place to 
ensure that its goods are legal. Just as a legitimate art gallery 
requires evidence of provenance before purchasing paintings or 
artifacts, or a seller of name-brand shoes needs comfort that it is not 
buying counterfeits, companies that are dealing in goods covered by the 
Lacey Act are responsible for knowing their supply chains and, if 
appropriate, demanding contractual warranties to protect themselves.
    The strong incentive in the Lacey Act to use due care is causing 
this positive shift in the marketplace. Introduction of an innocent 
owner provision would have the opposite effect of encouraging companies 
to know as little as possible about their supply chains. In addition, 
basic property rights are fundamental to the law of our country. Any 
proposed changes to the Lacey Act must be consistent with these 
longstanding legal principles. An innocent owner defense that deprives 
the rightful owner of his or her property clearly is not.
    Indeed, if the committee were inclined to consider any changes to 
the Lacey Act, I think it would make most sense to strengthen the Act's 
protections of victims and property rights, by making it easier for 
victims to recover for Lacey Act violations. One simple idea would be 
to expand the list of crimes covered by the federal restitution 
statutes, 18 U.S.C. Sec. Sec. 3663 & 3663A, so that it explicitly would 
cover the Lacey Act. That fix would help facilitate the return of 
stolen articles to their rightful owner in cases where the evidence 
establishes a substantive Lacey Act violation, but fails to support a 
charge under Title 18 (for example, where the defendant acted alone and 
therefore did not violate the federal conspiracy statute, 18 U.S.C. 
Sec. 371). Congress also could support the rights of crime victims 
further by creating a rebuttable presumption that, once articles have 
been shown to violate the Lacey Act and are forfeitable, such articles 
will be deemed to be the property of the state or country of origin, 
absent a showing of superior title. The state or country where the 
fish, wildlife, plant or plant product was illegally taken would be 
deemed a ``victim'' entitled to restitution.
Plants and Plant Products Imported Before 2008
    Some have expressed concern that the Lacey Act might cover plants 
and plant products that were harvested before the Lacey Act was amended 
in 2008, noting that innocent owners of antique musical instruments or 
furniture technically face exposure under the Lacey Act. I am 
sympathetic to such concerns. Of course, as I explained above, truly 
innocent owners of pre-2008 plants or plant products cannot be 
prosecuted under the Lacey Act. Helpfully, the U.S. Fish and Wildlife 
Service further has clarified that ``individual consumers and musicians 
are not the focus of any U.S. Fish and Wildlife Service law enforcement 
investigations pertaining to the Lacey Act, and have no need for 
concern about confiscation of their instruments by the U.S. Fish and 
Wildlife Service.''\21\ More fundamentally, however, as with the 
``innocent owner'' proposal discussed above, I am concerned about how 
any change addressed to pre-2008 articles would square with our general 
obligation under the U.S. legal system to protect the rights of 
property owners. I am equally concerned that any such change would have 
the unintended effect of excusing illegal activity and perpetuating the 
presence of illegal goods in the market, all to the detriment of 
American interests. For example, it would be hard to be sympathetic to 
someone who knowingly imported wood that was illegally harvested from a 
World Heritage Site in 2007 who now wants to profit from its sale. 
Moreover, because of difficulties in dating wood, constructing a ``pre-
2008'' exception could inadvertently help criminals launder wood that 
in fact was harvested and imported after 2008, because defendants could 
demand that the United States affirmatively prove in a criminal case 
that the wood is harvested or imported after 2008. Accordingly, while I 
understand why these issues have been raised, I again urge the 
committee to be cautious in proposing any such change to the Lacey Act.
---------------------------------------------------------------------------
    \21\ U.S. Fish & Wildlife Service, Where We Stand: The Lacey Act 
and our Law Enforcement Work (Sept. 22, 2011) (available at http://
www.fws.gov/news/blog/index.cfm/2011/9/22/Where-We-Stand-The-Lacey-Act-
and-our-Law-Enforcement-Work).
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Scope of Foreign Laws
    Some have expressed concern over the scope of foreign laws that 
could trigger a Lacey Act violation. Again, I believe that much of the 
anxiety about the scope of foreign laws is misplaced. The categories of 
foreign laws at issue in the Lacey Act are set out clearly in the Act. 
Legitimate companies in a wide variety of industries routinely must 
navigate local and foreign laws. Seafood companies complying with the 
Lacey Act have been navigating foreign laws for decades. Moreover, the 
fact that a particular foreign law may be ambiguous, unclear or 
difficult to discern, bears on the due care analysis and may suggest 
that a company did not knowingly import illegal goods (which is what 
happened with some of the wood at issue in Gibson). More fundamentally, 
however, in my experience, legitimate businesses take seriously their 
obligations to comply with local and foreign laws. They ask adequate 
questions and, to gain comfort with their compliance with U.S. law, 
they track their due diligence in such a way that they can demonstrate 
their good faith if questions arise later. In this respect, businesses 
that work with foreign suppliers are in the best position to ask the 
relevant questions and require that their suppliers make sure the goods 
are legal.
Declaration Requirement
    Finally, some concerns have been raised that the declaration 
requirement is burdensome and creates a collection of paper that serves 
no purpose. The declaration requirement is one of the key elements of 
the 2008 Amendments because it forces importers to examine their supply 
chains, ask questions, and obtain information to ensure that everything 
is legal. While it has been reported that there currently is a backlog 
in processing some of the declarations filed by paper means, 
approximately 80% of the declarations are filed and processed 
successfully by electronic means. More fundamentally, the declarations 
provide information that protects innocent companies and helps in the 
investigation and prosecution of criminal organizations. Indeed, the 
defendants' paper trail in Bengis provided crucial evidence leading to 
the dismantling of the criminal scheme.
    The declaration requirement is requiring companies to ask new 
questions and gather new information about the plants and plant 
products they have been using for years. This can be a difficult and 
slow process, which is why APHIS has been working with industries to 
phase in enforcement and providing resources to help companies 
understand and comply with the declaration requirement.\22\ In addition 
to setting up a website dedicated to Lacey Act compliance and 
resources, APHIS has issued guidance to address potential difficulties 
in identifying the genus and species of certain categories of plants 
and plant products. For example, the guidance includes a provision 
stating that items manufactured prior to the 2008 Amendments for which, 
despite the exercise of due care, it is impossible to identify certain 
information, the importer may identify the genus as ``Special'' and the 
species as ``PreAmendment.''\23\ APHIS has also stated that it does not 
require a declaration for most personal shipments or for musical 
instruments transported for performances.\24\
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    \22\ See Elinor Colbourn and Thomas W. Swegle, The Lacey Act 
Amendments of 2008: Curbing International Trafficking in Illegal 
Timber, STO36 ALI-ABA 365, 373-77 (Apr. 26, 2012).
    \23\ APHIS, Lacey Act Plant and Plant Product Declaration Special 
Use Designations (Sept. 19, 2012), available at http://
www.aphis.usda.gov/plant_health/lacey_act/downloads/lacey-act-SUD.pdf.
    \24\ APHIS, Lacey Act Amendment: Complete List of Questions and 
Answers (Feb. 16, 2012), available at http://www.aphis.usda.gov/
plant_health/lacey_act/downloads/faq.pdf.
---------------------------------------------------------------------------
    To further ease compliance with the declaration requirement and 
improve enforcement capabilities, APHIS requires funding that will 
allow it to streamline the process so that submitting the declarations 
and accessing the information in real time is more efficient for 
industry and the agencies alike. Already with the limited funding APHIS 
received for the first time last year, it soon will be piloting a web-
based interface designed to offer a viable alternative to submission of 
the 20% of declarations that are still being filed by paper means.
    Fully funding APHIS, the Fish and Wildlife Service, and other key 
agencies so they can effectively implement and enforce the Lacey Act 
will ensure that it is less burdensome to companies and that it 
achieves the goals of curbing illegal trade as envisioned in the law.
Conclusion
    The Lacey Act provides an important tool that helps enforcement 
officials fight crime, corruption, and the theft of plants and plant 
products for the benefit of American interests. I have advised 
companies in various industries on Lacey Act compliance, including 
clients in the paper industry, book publishing, and the cosmetic 
industry, and I am cognizant of the challenges faced by serious law 
abiding American companies that are trying to do the right thing. 
Still, the fact that compliance is challenging does not mean that we 
should ignore our supply chains. We owe it to our country, our 
legitimate businesses, and American consumers to get this right. We 
especially owe it to our children and grandchildren who will be facing 
worldwide shortages in natural resources and greater environmental 
degradation if we fail to invest the time and energy to make sure we 
protect our forests, fish and wildlife from the threat of illegal 
harvesting.
    Thank you again for inviting me to appear today. I would be happy 
to answer any questions.
                                 ______
                                 
    Dr. Fleming. Thank you, Mr. Asner.
    Finally, we have Mr. Erik Autor for 5 minutes to provide 
his perspective on the 2008 Lacey Act.

  STATEMENT OF ERIK O. AUTOR, ESQ., PRESIDENT AND CEO, AUTOR 
            GLOBAL STRATEGIES LLC/TOTAL SPECTRUM LLC

    Mr. Autor. Mr. Chairman, members of the Subcommittee, thank 
you for inviting me to testify at today's hearing on the Lacey 
Act. While I am a former representative of the retail industry, 
I appear today on behalf of myself, and speak only as someone 
who has been actively involved in the policy discussions on the 
Lacey Act amendments since their passage in 2008.
    The purpose of the 2008 Lacey Act amendments is to prevent 
illegal logging and harvesting of plants in both the United 
States and abroad which pose serious threats to the environment 
and legitimate commerce and products derived from wood in 
plants. These aims are laudable, and supported by American 
business.
    However, the law, as written and enforced, has had several 
unintended consequences that unnecessarily burden compliance 
and enforcement, needlessly engender unpredictability, threaten 
American businesses and jobs, and deviate from the law's core 
objectives. To address those unintended consequences, Congress 
should make four modest common-sense reforms to the law that 
will improve and facilitate enforcement and compliance, and 
reduce unnecessary burdens on legitimate commerce, while 
preserving the law's integrity and objectives.
    Other witnesses have already discussed in detail three of 
these reforms: addressing pre-2008 harvesting and production; 
providing a legal procedure in seizure and forfeiture actions 
for owners who can demonstrate due diligence; and refining the 
scope of foreign laws and regulations subject to the Lacey Act.
    Therefore, given our limited time, I will focus the 
remainder of my statement on the fourth issue with the Lacey 
Act amendments, relating to the requirement that imports 
containing wood or plant material must be accompanied by a 
declaration filed upon importation with USDA's Animal and Plant 
Health Inspection Service. This requirement has created three 
significant problems for both government and business.
    The first is that the term ``upon importation'' is a 
layman's expression with no legal meaning in the technical 
parlance of customs law. Rather, the process of making entry is 
the key action with respect to an imported product, which is 
the point at which it legally, rather than just physically, 
enters U.S. customs territory. The most common types of entry 
for commercial goods are consumption entries and warehouse 
entries.
    The second problem with the import declaration is that it 
has failed to facilitate compliance for businesses by imposing 
unnecessary costs and higher regulatory burdens compared to 
other laws regulating imports. In particular, technical 
limitations with the electronic system for filing import 
declarations have not been able to accommodate large amounts of 
data that must be submitted on each shipment for even fairly 
simple products. As a result, importers have had to resort to 
breaking up single shipments into multiple entries or file 
paper declarations. Both these options significantly complicate 
and delay import transactions, and force importers to incur 
much higher customs brokerage fees, merchandise processing 
fees, and other administrative costs.
    The third problem is that the import declaration 
requirement has compromised, rather than enhanced enforcement 
efforts by the Federal Government. Even though the law is not 
yet fully implemented, APHIS calculates that it already 
receives approximately 9,200 declarations per week, or about 
40,000 a month. The Agency faces this crush of paper with few 
resources and little ability to examine declarations, undertake 
any risk-based analysis, and has been unable to add new tariff 
lines under the new U.S. harmonized tariff schedule to the 
declaration requirement, as mandated by the statute.
    Congress should correct these problems which unnecessarily 
cost industry and government $56 million annually by replacing 
the requirement for filing a declaration upon importation for 
each shipment of imported merchandise with a declaration on 
demand. The on-demand system is currently used in other laws 
regulating imports, including safety certifications for 
imported products under the Consumer Product Safety Improvement 
Act, and is more consistent with the paperless system Customs 
and Border Protection uses in its enforcement activities. It 
requires importers to collect and maintain the same information 
currently required on the import declaration, but to produce 
that information at the request of Federal enforcement 
agencies.
    This system will allow the enforcement agencies to identify 
and focus on higher-risk shipments by more efficiently 
separating the wheat from the chaff. It will also relieve 
businesses of the cost and burdens incurred by constantly 
having to file declarations, even for low-risk shipments that 
are merely being sent, unread, to warehouse for storage. An on-
demand declaration system would in no way undermine the Lacey 
Act, but will actually support better enforcement and 
compliance.
    Finally, I must caution that, to the extent opposition to 
any changes to the Lacey Act amendments may be motivated by 
exploiting the problems with this law to burden or disrupt 
legitimate imports, it is inappropriate and consistent with 
U.S. legal obligations under the rules of the World Trade 
Organization and contrary to the intent of Congress that this 
law operate or be used as a non-tariff trade barrier against 
legally harvested plants.
    In conclusion, I don't question the need for a law like the 
Lacey Act amendments, nor would I suggest changes that I 
thought would undermine the law. I just believe this law needs 
to be improved to make it more effective by correcting the 
problems I have discussed. Congress specifically contemplated 
possible changes to the law, once it had a chance to see how it 
would operate. After 5 years, Congress has ample evidence that 
these modest and targeted reforms are warranted and should be 
adopted. Thank you.
    [The prepared statement of Mr. Autor follows:]

       Statement of Erik O. Autor, Esq., Total Spectrum LLC and 
                      Autor Global Strategies LLC

    Mr. Chairman, Members of the Subcommittee, thank you for inviting 
me to testify at today's hearing on the Lacey Act. While I am a former 
representative of the retail industry, I appear today on behalf of 
myself and speak only as someone who has been actively involved in the 
policy discussions on the Lacey Act Amendments since their passage in 
2008 as part of the Food, Conservation, and Energy Act.
    The purpose of the 2008 Lacey Act Amendments is to prevent illegal 
logging and harvesting of plants in both the United States and abroad, 
which pose serious threats to the environment and legitimate commerce 
in products derived from wood and plants.
    While these aims are laudable and supported by American business, 
the amendments were added to the 2008 farm bill largely without the 
benefit of the normal legislative process of full public comment, and 
debate and consideration in Congress. The unfortunate consequence is 
that this law, as written and enforced, has had several unintended 
consequences that unnecessarily burden compliance and enforcement, 
needlessly engender unpredictability, threaten American businesses and 
jobs, and deviate from the law's core objectives.
    To address those unintended consequences, Congress should make four 
modest, common-sense reforms to the law that will improve and 
facilitate enforcement and compliance and reduce unnecessary burdens on 
legitimate commerce, while preserving the law's integrity and 
objectives.
    First, Congress should correct an omission in the 2008 amendments 
to prevent retroactive application of the law to plants or plant 
products imported, processed, or manufactured prior to the law's 
effective date of May 22, 2008. As a general principle, penal statutes 
should not be applied retroactively, especially when it could subject 
individuals and companies to potentially severe legal consequences with 
no prior notice or ability to comply with the law. This reform is 
particularly important to ensure that enforcement actions will not be 
taken against antiques and used products, or musical instruments 
containing wood or plant products harvested, in some cases, years 
before 2008, the provenance of which is impossible to determine.
    Second, the Lacey Act Amendments were written in a way that could 
trigger enforcement and penalties from violations of an almost 
unlimited and largely unknowable set of criminal and civil foreign 
laws, regulations, and ordinances at the national, sub-national, and 
local level. Consequently, the public has little guidance or 
notification as to the legal responsibilities under this law, which 
raises a serious legal question whether the law, as currently written, 
is unconstitutionally vague.
    Congress should mitigate this problem by clarifying that the 2008 
Amendments apply only those foreign laws that are directed at the 
protection, conservation, or management of plants or the ecosystems of 
which they are a part. For example, it is simply inappropriate to 
initiate a Lacey Act enforcement action based on a violation of a 
foreign law restricting the export of certain products that is intended 
not to protect the environment, but rather to protect manufacturing in 
that country from foreign competition.
    Congress can also direct the Administration to construct a 
publicly-available database of applicable foreign laws. These changes 
will also ensure that enforcement of the law is properly focused on and 
consistent with its environmental goals, will provide companies greater 
predictability, and facilitate due diligence in their supply chain 
management.
    A third problem that Congress should address is that the Lacey Act 
Amendments, as currently constructed and enforced, can subject a good-
faith owner, purchaser, retailer, or other party in the chain of 
custody of a plant or plant product, to penalties through no fault of 
their own and despite best efforts to comply.
    The Departments of Interior and Justice have stated that ``people 
who unknowingly possess a musical instrument or other object containing 
wood that was illegally taken, possessed, transported or sold in 
violation of law and who, in the exercise of due care would not have 
known that it was illegal, do not have criminal exposure.'' However, 
Justice has also stated that the Lacey Act Amendments impose a strict 
liability standard with respect to possession of such products, which 
it deems to be contraband. Thus, a company can have its products seized 
and forfeited regardless of the degree of due diligence that it 
exercises to comply with the law. Typically, products seized and 
forfeited are not destroyed, but are auctioned off by the federal 
government and returned into the stream of commerce.
    Generally speaking, wood and plant products are not inherently 
illegal to possess. Also, it is impossible to know just by looking at a 
wood product whether it was made from legally or illegally harvested 
wood. Given these considerations, it is inappropriate to treat wood and 
plant products as contraband like illicit drugs, unless they involve a 
tree or plant specifically included under a trade ban, such as the 
Convention on the International Trade in Endangered Species (CITES).
    Congress should address this problem by clarifying that the strict 
liability provision for seizure of contraband under the civil asset 
forfeiture statute does not apply to plants under the Lacey Act. As a 
matter of due process, Congress should also provide those who can 
demonstrate they have exercised proper due care in compliance with the 
law, a day in court and a right to petition a federal judge for the 
return of any goods seized and subject to forfeiture through no fault 
of their own. This change would not undermine the Lacey Act because it 
would actually provide an incentive to encourage the highest degree of 
due diligence, and would offer no loophole for knowing violators, 
scofflaws, or even innocent owners who cannot show that they exercised 
a sufficient degree of due care.
    The fourth issue with the Lacey Act Amendments relates to the 
requirement that imports containing wood or plant material must be 
accompanied by a declaration filed ``upon importation'' with USDA's 
Animal and Plant Health Inspection Service (APHIS). This requirement 
has created three significant problems for both government and 
business. The first is that the term ``upon importation'' is a layman's 
expression with no legal meaning in the technical parlance of customs 
law. Rather, the process of ``making entry'' is the key action with 
respect to an imported product, which is the point at which it legally, 
rather than just physically, enters U.S. customs territory. The most 
common types of entry for commercial goods are ``consumption entries'' 
and ``warehouse entries.''
    The second problem with the import declaration is that it has 
failed to facilitate compliance for businesses by imposing unnecessary 
costs and higher regulatory burdens compared to other laws regulating 
imports. In particular, technical limitations with the electronic 
system for filing import documents cannot accommodate large amounts of 
data that must be submitted on each shipment for even fairly simple 
products. As a result, importers have to resort to breaking up single 
shipments into multiple entries or file paper declarations. Both these 
options significantly complicate and delay import transactions, and 
force importers to incur much higher brokerage fees, Merchandise 
Processing Fees (MPF), and other administrative costs.
    The third problem is that the import declaration requirement has 
compromised, rather than enhanced enforcement efforts by the federal 
government. Even though the law is not yet fully implemented, APHIS 
calculates that it already receives approximately 9,200 declarations 
per week. The agency faces this crush of paperwork with few resources 
and little ability to examine declarations, undertake any risk-based 
analysis, and has been unable to add new tariff lines under the U.S. 
Harmonized Tariff Schedule (HTS) to the declaration requirement as 
mandated by statute.
    Congress should correct these problems, which unnecessarily cost 
industry and government $56 million annually, by replacing the 
requirement for filing a declaration upon ``importation'' for each 
shipment of imported merchandise with a ``declaration on demand.'' The 
on-demand system is currently used with other laws regulating imports, 
including safety certifications for imported products under the 
Consumer Product Safety Improvement Act (CPSIA), and is more consistent 
with the paperless system Customs and Border Protection (CBP) uses in 
its enforcement activities. It requires importers to collect and 
maintain the same information currently required on the import 
declaration but to produce that information at the request of federal 
enforcement agencies. This system will allow APHIS to identify and 
focus on higher-risk shipments by more efficiently separating the wheat 
from the chaff. It will also relieve businesses of the costs and 
burdens incurred by constantly having to file declarations, even for 
low-risk shipments, that are merely being sent unread to a warehouse 
for storage. An on-demand declaration system would in no way undermine 
the Lacey Act, but will actually support better enforcement and 
compliance.
    As part of this change, Congress should also provide explicit 
authority to the Secretary of Agriculture to promulgate regulations 
regarding plant declarations, and permit the Secretary to distinguish 
among different plants and limit the applicability of the declaration 
requirement for a particular class of type of plant if the Secretary 
determines that applying the requirement to such plant class or type 
would not be feasible, practicable, or effective.
    Finally, I must caution that to the extent opposition to any 
changes to the Lacey Act Amendments may be motivated by exploiting the 
problems with this law to burden or disrupt legitimate imports, it is 
inappropriate, inconsistent with U.S. legal obligations under the rules 
of the World Trade Organization, and contrary to the intent of 
Congress, that this law operate, or be used as a non-tariff trade 
barrier against legally-harvested plants.
    In conclusion, I do not question the need for a law like the Lacey 
Act Amendments, nor would I suggest changes that I thought would 
undermine the law. I just believe that this law needs to be improved to 
make it more effective by correcting the problems I have discussed. 
Congress specifically contemplated possible changes to the law once it 
had a chance to see how it would operate. After five years, Congress 
has ample evidence that these modest and targeted reforms are warranted 
and should be adopted.
                                 ______
                                 
    Dr. Fleming. OK. Well, thank you, panel. At this point we 
will begin Member questioning of the witnesses. To allow all 
Members to participate, and to ensure we can hear from all the 
witnesses today, Members are limited to 5 minutes for their 
questions. However, if Members have additional questions, we 
can certainly have a round or two. We really only have two 
Members at this moment. So that round may go fairly fast.
    I now recognize myself for 5 minutes. First of all, panel, 
it is interesting. I think some very quick conclusions can be 
drawn from what I have heard with both panels. And number one 
is there is a consensus that everybody believes that, in 
general, the Lacey Act is a good thing, that it provides 
certain protections, and that it is well-intended. I hear some 
say that nothing needs to be changed about the law. Others say, 
yes, there is some massive problems. But it seems to be that 
the more a company relies on imports, the more problematic this 
law can be.
    Also, like many things in government today, we seem to 
punish good guys and often times the bad guys get away. So, I 
think we need to be mindful of these things, going forward.
    So, with that, I would like to ask Mr. Snapp some 
questions. Mr. Snapp, could you more fully explain how you had 
to turn away that 29 companies that you talked about from the 
Lacey Act compliance verification program?
    Mr. Snapp. Thank you, Chairman. I would be happy to answer 
your questions. The complexity of supply chains stretched to 
the product itself. So, if you are looking at an engineered 
panel, an engineered map-form panel, you have multiple forms of 
raw material feeding that production facility. So you can have 
residuals from a saw mill, you can have actual timber 
harvested. All of those products can come from a very large 
area. So tracking back downstream to where those materials 
originated from becomes problematic, at best.
    If you have a specified concession, which is what our 
current program enrollees have, it is much easier. But if you 
don't have a specified concession, and you are purchasing raw 
materials from secondary suppliers who may have purchased that 
material from a third-tier supplier, the ability to backtrack 
where that material came from is nearly impossible, without a 
very large workforce.
    Dr. Fleming. OK. Well, that then leads to the second 
question. What is your annual cost to have six legal firms on 
retainer to keep track of foreign laws?
    Mr. Snapp. The program that we developed using the legal 
firms overseas in the country of origin where the material is 
initially harvested is at a front-loaded cost, because we have 
to use the attorneys to isolate, identify all of the relevant 
laws before the program begins. So, the initial two years, the 
average cost per facility was ranging between $25,000 and 
$40,000. On an ongoing maintenance basis, now that we have 
identified those laws, the legal firms actually provide 
oversight and advice on any changes. That cost averages the 
mills $10,000 to $15,000 per year.
    Dr. Fleming. And who ultimately pays that cost?
    Mr. Snapp. The clients pay that cost, sir. And that cost is 
technically carried down to the end customer. But we have seen 
significant difficulty for end customers to justify a higher 
price on a commodity product, based on that investment on legal 
and our services.
    Dr. Fleming. So if the end user, the customer, the retail 
customer, simply can't afford or is not willing to pay for that 
product, then what impact does that have on jobs?
    Mr. Snapp. On the jobs specific to the United States, sir?
    Dr. Fleming. Yes.
    Mr. Snapp. You see a higher cost going into what we call 
reman facilities, who utilize cut lumber, they utilize 
engineered panels. If their base cost increases, their finished 
product cost increases. So if their finished product cost 
increases, then the consumer price is going to increase. You 
have alternative products that come from overseas in finished 
product form that don't have those costs associated with them, 
which can further undercut those U.S.-produced products, 
therefore putting more pressure on U.S. jobs.
    Dr. Fleming. So the net result is a transfer of American 
jobs to foreign countries.
    Mr. Snapp. Correct, sir.
    Dr. Fleming. OK. OK. Ms. Matthiesen, what is it costing 
your members to comply with the declaration requirement?
    Ms. Matthiesen. The cost to our members, if they are the 
importer of record for U.S. import purposes, is currently 
around $5 per import declaration. But that $5, sir, is the cost 
associated with the actual brokerage transmission of the 
declaration. And I think, as Mr. Snapp and others have made the 
case this morning, the backroom costs are even more, the IT and 
the staffing and this sourcing inquiries through the supply 
chain. So that cost could run approximately $6 to $7 per 
important declaration.
    The other thing I would note, just because I have the 
opportunity now, is that we are still relatively low on the 
manufacturing supply chain in product coverage of the Lacey 
Act. Think of the auto and the auto industry who needs to make 
a plastic dashboard made of resin, made of plants, and it will 
be almost impossible.
    Dr. Fleming. Yes. OK, thank you. My time is up. I now 
recognize Ms. Shea-Porter for 5 minutes.
    Ms. Shea-Porter. Thank you very much. It is always 
difficult to think about the economic cost whenever we 
implement any kinds of new regulations. But thinking also in 
terms of why and what this is about, and how it does help 
American businesses, in addition to the environmental health 
and support that it provides, it is always tough to weigh 
those. It is tough to weigh those.
    So, having said that, I would like to first ask Mr. Asner, 
I was looking at some of the testimony there, and there is 
something that we didn't talk about here, but I think it does 
have an impact. Can you tell us about the environmental crimes 
such as illicit trade in timber? Who are the players? And does 
this come back to us in any way?
    Mr. Asner. Look, a lot of these cases are ones that you 
read about in the paper. And the cases that DOJ focuses on, 
similar to the case that I focused on when I handled the Bengis 
matter, these are international conspiracies, they are often 
very sophisticated conspiracies, and cases like that often deal 
with cross-border problems. People exploit the fact that it is 
difficult for law enforcement to communicate across borders. 
There are devastating impacts locally.
    There are also impacts in the United States. There are 
immigration violations. There is forced labor. And I have read 
reports also that, for example, the Director of National 
Intelligence has issued a report talking about how there are 
connections with corruption, which, of course, undercuts the 
rule of law, which undercuts our national security.
    So, yes, I think that the crime, the underlying crime, is a 
very serious one. And for the bad guys, they think, whether it 
is wood or fish or blood diamonds, they think of it as money, 
and they are willing to violate the rules in order to line 
their own pockets, and then support whatever ill things they 
want to take care of.
    Ms. Shea-Porter. OK, and there is, obviously, associated 
costs with trying to fight these guys. They are not just the 
guys who made a little mistake, but there is actually a huge 
market in there that is creating a huge problem around the 
world, not just in our country, but other countries.
    Mr. Asner. Yes, absolutely. And just to be clear, people 
who make a mistake, who make an innocent mistake under the 
Lacey Act, are not guilty, period.
    Ms. Shea-Porter. Right. I think we have to keep repeating 
that.
    And then I have another question for you. In your testimony 
you state that a person who innocently imports wood is innocent 
under the Lacey Act. Can you explain--first of all, they can 
have their day in court. Right?
    Mr. Asner. Absolutely.
    Ms. Shea-Porter. Can you explain what the genesis of this 
misunderstanding is? I----
    Mr. Asner. Yes. I think it is a lot of looseness, a lot of 
people who are playing with law, and don't actually understand 
what the Lacey Act entails.
    There are two provisions that have a mental state 
requirement, and one is a misdemeanor--that is the one that is 
tied to the due care standard--and then one is a felony, and 
that is tied to a knowledge standard. Then there is not a 
penalty, but a consequence of forfeiture. If you possess 
illegal things under the laws of the United States, you are not 
allowed to keep them.
    Now, I understand--and, by the way, there are very good 
reasons for that. And one of the reasons is that, hopefully, 
those illegal things will be taken away and given back to the 
rightful owner, and that is an important principle, because we 
believe in property rights here. So there are sympathetic 
cases. So where, for example, you have something and you can't 
really trace it back to an owner, in those situations--and the 
person is truly innocent--in those situations you can invoke 
the remission statute and ask for an exception to the 
forfeiture. And that is well documented.
    Ms. Shea-Porter. OK. Thank you. Thank you for that answer.
    Mr. French, I am obviously thrilled to see you here. What 
is the impact to your business, when illegally sourced material 
enters the U.S. marketplace?
    Mr. French. This is a big issue about American jobs, and it 
is one of the reasons that those Lacey Act amendments were 
referred to by some very conservative members of my association 
as a jobs act for many States, particularly in the South.
    But in my business, if illegal wood comes in, and my 
domestic customer, who is trying to make a product out of wood, 
it undercuts their ability to compete in the world marketplace 
for that manufactured product. So if a toilet seat or a toilet 
roll holder from China comes in made out of illegal wood and it 
can be sold at one-tenth the price of the product that could be 
made out of American wood in America, using American employees, 
that is a devastating impact on those customers.
    And the wood products industry in this country was 
devastated by this last recession. And the influx of illegal 
woods was added to that terrible impact.
    Ms. Shea-Porter. And I had another question for you. Now, 
we are obviously always concerned about costs for businesses. 
And clearly, as somebody who has run a business for many years, 
you look at that bottom line also. But is the cost for 
compliance smaller than the cost of allowing illegal wood and 
not finding it?
    Mr. French. Yes. I mean I am not a big importer, myself. We 
do import some, and we have. But talking to people that have, I 
think, most imported wood businesses want to have legitimate 
supply chains. And they work very, very hard. And I think the 
Lacey Act--the APHIS documents have actually helped these 
businesses walk themselves through their supply chains and 
eliminate high-risk areas for purchase. And they are focusing 
on lower-risk sustainable and legal material.
    So, I think that the companies that want to make it work, 
particularly the importing companies, are going to have less 
cost than perhaps some people are talking about.
    Ms. Shea-Porter. Thank you. I will yield back.
    Dr. Fleming. Thank you. Well, let's have another round, 
shall we? We are having fun.
    Mr. Autor, now, you heard Mr. Asner make assertions, first 
of all, that this is a matter of national security, which is 
news to me. But also he said that innocent people who may 
perhaps accidentally break some laws have nothing to fear. 
Perhaps there is no danger to forfeiture, and that sort of 
thing. Do you agree?
    Mr. Autor. No, I don't agree.
    Dr. Fleming. Could you pull it a little closer.
    Mr. Autor. Sorry. We have to distinguish between two--well, 
first of all, it has been clear that if you have exercised due 
diligence and have been found to exercise due diligence, that 
you will not be subject to criminal prosecution. So, in that 
sense, you are not guilty.
    However, under the Civil Asset Forfeiture Act, the mere 
possession of material that has been found to violate Lacey is 
deemed to be contraband, like illegal drugs, and is subject to 
seizure and forfeiture, regardless of your intent.
    So, if you are a perfectly innocent owner, you have 
exercised proper due diligence, and you can demonstrate that 
you have, you can still be subject to having the material 
seized and forfeited which, in some cases--and I can point to 
Gibson Guitar--can amount to millions of dollars. And for a 
smaller company, that can put them out of business, even though 
they have been found to do nothing wrong, and they are not 
subject to any criminal sanctions, whatsoever.
    And there is not an adequate procedure under the law to be 
able to go to a Federal judge and demonstrate that you have 
exercised proper due care as expected and required under Lacey, 
and to petition a court to return the merchandise. And this is 
not the same as illegal drugs or a stolen painting. There is 
nothing inherently illegal about wood. You can have two 
identical tables made of hickory or cherry, and it is 
impossible to determine whether one was from illegally 
harvested wood or the other was not.
    So, I think there is some distinctions to be drawn here. 
The remission procedure that Mr. Asner mentioned is very 
limited in petitioners being able to use that procedure. I 
think that there needs to be a better legal process through the 
Federal courts for petitioners to be able to show that they 
have exercised due care.
    Dr. Fleming. So if I am an American company owner, small 
businessman, as many, I am sure, are, so if I have a $3 million 
shipment coming in, and it is confiscated, even though I may 
not be directly fined, my $3 million goes out the window and 
then my business could go bankrupt. So, by default, my business 
is being punished. Is that really what you are saying?
    Mr. Autor. I think that is an accurate characterization, 
yes. You have done nothing wrong, you can demonstrate that you 
have done everything you can to comply with this law, and yet 
you can still have the product that you have seized.
    And if this is truly to be treated like contraband, like 
illegal drugs, technically anyone in the chain of possession, 
including a consumer, could be subject to forfeiture and 
seizure.
    Dr. Fleming. Well, again, that is very worrisome. Today we 
are talking about the IRS picking and choosing people to 
retaliate against, potentially being used as political pawns, 
putting the heavy boot of the Federal Government on the necks 
of law-abiding citizens who were innocent, who perhaps made a 
mistake, maybe didn't check the right box on a form. That is, 
indeed, very worrisome.
    Ms. Matthiesen, we have been talking about, of course, 
American law. But we will return to Canada here for a moment. 
Has there ever been an allegation that illegal logging has or 
is occurring within Canada?
    Ms. Matthiesen. From my knowledge--and I have asked the 
question to my sister associations in Canada--no.
    Dr. Fleming. OK. Therefore, do you believe it is fair that 
your wood products are being treated exactly the same as those 
countries who have a history of illegal logging?
    Ms. Matthiesen. Well, it flies in the face of risk 
management, and it flies in the face of what our two countries 
and the NAFTA partnership has been doing in the last several 
years that has created thousands of jobs in the last two 
decades since we signed NAFTA.
    So, queen for the day, the answer would be we would like to 
have a distinctive and separate approach for Canada, simply 
because the risk is that much reduced.
    Dr. Fleming. Yes. OK, thank you. I see my time is up. The 
Chair now recognizes Ms. Shea-Porter.
    Ms. Shea-Porter. Thank you, and I am still looking around 
thinking I am at Natural Resources, not any oversight on the 
IRS. But whatever, having said that.
    So I have a couple of questions. I listened very closely to 
what Mr. Autor said--and I am sorry if I mispronounced your 
name. And I would like Mr. Asner to tell me. Do you agree with 
that characterization? Yes or no. And please explain.
    Mr. Asner. No, not at all. Unfortunately, I think Mr. Autor 
wasn't in the Federal Government for a long time and didn't 
handle criminal cases.
    When goods are forfeited, the government has a right to 
seize goods before forfeiture, and then you can file a motion 
under Rule 41(g) of the Federal Rules of Criminal Procedure, 
and you can get a court hearing to get those back. And that is 
just black-letter law. And defendants do that all the time.
    If the government proceeds to forfeit, what they have to do 
is give a notice, and then somebody can come in and make a 
claim to it under CAFRA, which he did mention. It is dripping 
with due process.
    After that, there is then a hearing, and somebody can make 
a claim, and there can be a claim that it is contraband, the 
government bears the burden of proving it is contraband or that 
it is illegally possessed. The other side gets to contest that. 
And so there is a process that goes through this.
    So the mention, for example, of Gibson, there were two 
categories of wood in Gibson. One, the government actually 
allowed them to file a petition for remission on. That was the 
Indian wood. The other ones they had admitted they didn't 
exercise due care, and that ended up getting forfeited. So I 
don't know what he is talking about when we are talking about 
Gibson there. That case is pretty clear.
    And then, with respect to the $3 million example, I mean 
that is the law, not just in Lacey, that is the law in customs. 
That is the customs law, and it has been that law for decades, 
if not 100 years already, that if something comes into the 
country and you are not allowed to have it, it is illegal, then 
it gets forfeited. And I understand that it can be a problem 
for people who are innocent bringing it in. And commercial 
clients--for example, my clients--we handle that through 
warranties and guarantees. We force the upstream supplier to 
guarantee the legality of the goods.
    And keep in mind the example of the $3 million worth of 
wood, on the other side of that, more often than not, there is 
a victim whose wood that belonged to. And just as if you steal 
a piece of art and you sell it to a third party, and that third 
party then sells it to me unwittingly, I can't complain when 
the person who is the victim comes to me and says, ``I want my 
art back.'' I have to give it back. My recourse is with the 
criminal.
    Ms. Shea-Porter. OK. Thank you, and I yield back.
    Dr. Fleming. The gentlelady yields back. The Chair would 
like to ask some follow-up questions.
    Mr. Asner, do you represent companies that perhaps could 
fall under this law?
    Mr. Asner. I do, from time to time, advise companies. It 
hasn't been a huge business, actually, frankly.
    Dr. Fleming. OK. But you would charge and perhaps make 
money by representing them having to deal with the issues here 
discussed today.
    Mr. Asner. I would hope to; that is what we do.
    Dr. Fleming. OK. So as a result of that, you do have a 
financial interest in some of the issues that go on today that 
may subject companies to the problems here.
    Mr. Asner. I think, actually, probably my financial 
interests would be with companies that are opposed to what I am 
saying today. My interest here is I have been interested in the 
Lacey Act for about 10 years, if not more, because I was a 
Federal prosecutor. I am here on my own dime. I just think it 
is interesting. I think it is important for the country----
    Dr. Fleming. But you would agree, sir----
    Mr. Asner. I think it is important for my children.
    Dr. Fleming. You would certainly agree that the more laws 
and regulations and the more trouble that companies have with 
this law, the more they are going to have to hire guys like 
you.
    Mr. Asner. You know, I think, actually, generally, it is 
true that the more regulations, the more----
    Dr. Fleming. The more lawyers we have to hire, right?
    Mr. Asner. The more difficult it gets. But on the other 
hand, it also protects, and it protects the rights of property 
owners.
    Dr. Fleming. Right.
    Mr. Asner. And we are here to protect property owners.
    Dr. Fleming. OK. Then, Mr. Autor, there was certain 
assertions here, such as that this law is--how did that go, 
dripping with--what was the word?
    Mr. Asner. Due process.
    Dr. Fleming. Due process. Dripping with due process. I 
would like to hear your response.
    Mr. Autor. Well, I think we need to look at how it is 
actually being utilized and enforced. And I think that there 
are serious due process concerns. And ultimately, with respect 
to the Indian wood in the Gibson Guitar case, the Federal 
Government acknowledged that it was mistaken. And although 
Gibson had tried to use the remission process in the case of 
that wood, it was not successful in doing so. So I think that 
instance really highlights some of the concerns here.
    It is true, as I said, if you are an innocent owner, you 
are not going to be subject to criminal prosecution, but it is 
by no means clear--and I don't agree that it is dripping with 
due process--that you are not going to still be subject to 
seizure and forfeiture without an adequate recourse to be able 
to say that ``I have done what I can to comply with this law.'' 
And, quite frankly, I think we need better due process to 
encourage better compliance. We can't just have sticks with 
this law, we need a carrot, as well. And this is not a loophole 
for people who are scofflaws or can't demonstrate that they 
have done proper due process. This is going to be a very narrow 
remedy.
    Dr. Fleming. Have you ever worked for the Federal 
Government?
    Mr. Autor. I have.
    Dr. Fleming. OK. So I thought I heard Mr. Asner say you 
have not worked for the Federal Government. But you have. A 
number of years, perhaps?
    Mr. Autor. I worked for the Federal Government for a total 
of 8 years.
    Dr. Fleming. OK. That is longer than I have worked for the 
Federal Government, so I think that is plenty of time.
    Anyway, I think that--I mean would you not agree, Mr. 
Autor, that a law like this gives pause to someone who is 
legitimately trying to run a business? This is the sort of 
thing that could keep a business person, a man or a woman, or 
even a small corporation up at night.
    Mr. Autor. I think so. I mean the costs--we have identified 
ways to fix this law. We are not talking about undermining, 
undercutting, gutting this law at all. But there are definitely 
ways that we have identified that can lower the costs of 
compliance and actually encourage compliance, help the agencies 
enforce this law better, achieve its objectives better, and 
provide businesses more predictability in how this law is going 
to be enforced.
    Dr. Fleming. So what we are really talking about is simply 
some improvements to a very old law that, unfortunately, some 
things were not contemplated exactly, and innocent people are 
being caught up in it. I think that is reasonable.
    Would you agree, Mr. Snapp?
    Mr. Snapp. Absolutely, Chairman.
    Dr. Fleming. OK. Well, with that I yield back. And if Ms. 
Shea-Porter would like to ask questions, I will recognize her.
    Ms. Shea-Porter. Thank you. And I am glad to see you 
identify yourself as working for the Federal Government, 
because we are part of that. It is not the government. It is us 
and others who work there and we try to work together here and 
get this right.
    But Mr. Chairman, I ask unanimous consent to include in the 
record an article written last year by Representative 
Blumenauer clarifying the facts in the Honduran lobster 
smuggling case. He concludes with this important statement that 
gets to the heart of the importance of the Lacey Act's 
interaction with foreign laws. He wrote, ``I suspect that if 
foreign fishermen smuggled 400,000 pounds of Maine lobsters or 
illegally harvested wood from Oregon worth millions of dollars 
from our country, that I would want them brought to justice, 
even if--especially if--they fled our jurisdiction.'' So I ask 
that be entered in the record.
    Dr. Fleming. Without objection, so ordered.
    [The article submitted for the record by Ms. Shea-Porter 
follows:]

                [From the Huffington Post, May, 8 2012]

              Truth Takes a Back Seat in Lacey Act Hearing
                       (By Rep. Earl Blumenauer)
    Today, I had the opportunity to testify before the Committee on 
Natural Resources Subcommittee on Fisheries, Wildlife, Oceans and 
Insular Affairs on two bills that would repeal significant portions of 
the Lacey Act. The Lacey Act is common sense legislation that protects 
American workers and industries from illegally harvested or exported 
materials.
    I was severely disappointed, however, that one of the witnesses 
invited by the majority, Senator Rand Paul of Kentucky, chose to attack 
the Lacey Act using misleading statistics and half-truths if not all-
out lies. At the center of Senator Paul's testimony was an oft-
repeated, yet apocryphal, story about two American fishermen who were 
unjustly prosecuted under the Lacey Act for transporting their catch in 
cardboard containers instead of plastic. Senator Paul was outraged that 
these two fishermen would be subject to monetary penalty, and even jail 
time, because of this simple mistake.
    I would be outraged, too . . . if the story were even remotely 
true.
    The two fishermen were doing far more than carrying lobsters in the 
wrong containers--they were found guilty by a jury of conspiracy, 
smuggling, and money laundering. Their convictions were upheld by a 
U.S. federal district court and also by the 11th Circuit Court of 
Appeals. This was a textbook case of criminals trying to circumvent the 
law for 400,000 pounds of lobster worth $4.6 million.
    Therefore it is especially offensive to see a U.S. Senator 
parroting this ``fisherman's tale''--who can ever believe those--
without even getting into the facts. Even worse, Senator Paul then used 
this doctored story for his personal political goal of gutting the 
protections that exist for the benefit of American jobs and the 
environment.
    Senator Paul's testimony was a perfect example of what's wrong with 
the political system today. He is more than willing to mislead and 
confuse public opinion to justify his world view. This is not something 
unique to Republicans, but happens whenever public figures put their 
own political goals ahead of the truth and the greater good. Instead of 
this constant game of spin and counter-spin where the facts take a back 
seat, we need work together to find compromise solutions that deal with 
the underlying problems we face, whether those are jobs, civil 
liberties, national security, infrastructure investment, or protecting 
the environment.
    That's what I have been working on in regards to the Lacey Act. We 
have a broad coalition who supports American workers and strong 
environmental protections with groups such as the League of 
Conservation Voters, the Hardwood Federation, the American Forest and 
Paper Association, the Sierra Club, and the United Steelworkers. This 
varied group is able to work together on this issue because they are 
willing to put their short-term goals on the back burner and focus on 
long-term issues in a way that promotes justice, fairness, and an 
inclusive table with room for all, while dealing head-on with facts.
    That is the type of political coalition and system I am proud to be 
part of.
                                 ______
                                 
    Ms. Shea-Porter. Thank you, and I yield back.
    Dr. Fleming. OK. The gentlelady yields back. I would like 
to thank you, panel, for your valuable testimony and 
contributions today. Members of the Subcommittee may have 
additional questions for the witnesses. And we ask you to 
respond to these in writing. The hearing record will be open 
for 10 days to receive these responses.
    Before closing, I ask unanimous consent to submit for the 
record a Congressional Research Service report on the Lacey 
Act, ``Compliance Issues Related to Improving Plants and Plant 
Products''; a statement by the American Forest and Paper 
Association; and a statement from the World Wildlife Fund.
    [The statements submitted for the record by Dr. Fleming 
follows, the report has been retained in the Committee's 
official files:]

         Statement of the American Forest and Paper Association

    The American Forest and Paper Association (AF&PA) appreciates this 
opportunity to provide the following testimony on the 2008 Lacey Act 
Amendments.
    AF&PA serves to advance a sustainable U.S. pulp, paper, packaging, 
and wood products manufacturing industry through fact-based public 
policy and marketplace advocacy. AF&PA member companies make products 
essential for everyday life from renewable and recyclable resources and 
are committed to continuous improvement through the industry's 
sustainability initiative--Better Practices, Better Planet 2020. The 
forest products industry accounts for approximately 4.5 percent of the 
total U.S. manufacturing GDP, manufactures approximately $200 billion 
in products annually, and employs nearly 900,000 men and women. The 
industry meets a payroll of approximately $50 billion annually and is 
among the top 10 manufacturing sector employers in 47 states.
Why AF&PA Supports the 2008 Lacey Act Amendments
    The U.S. forest products industry is a strong proponent of 
sustainable forest management practices in the U.S. and around the 
world and is committed to using forest management and manufacturing 
practices that meet environmental, social, and economic objectives. Our 
customers rely on us as the foundation of their supply chain to ensure 
that the products we sell are produced in a legal and sustainable 
manner.
    Building on its legacy of sustainability, the U.S. forest products 
industry two years ago set sustainability goals called ``Better 
Practices, Better Planet 2020.'' The initiative recognizes the 
importance of procurement of our primary wood fiber from sustainable 
sources. It includes a specific commitment to increase the amount of 
fiber procured from certified forest lands or through certified fiber 
sourcing programs in the U.S., and to work with governments, industry, 
and other stakeholders to promote policies around the globe to reduce 
illegal logging.
    While very little illegal logging occurs in North America, this is 
not the case around the globe. Conversion of forest land to agriculture 
is the primary cause of deforestation in developing countries but 
illegal logging also contributes to overexploitation and unsustainable 
forest management. Illegal logging is not just an environmental issue--
it is also an economic issue. When illegally sourced forest-based raw 
materials enter the stream of commerce, a global economic problem is 
created for U.S. producers of products from legally sourced raw 
materials.
    The scope of global illegal logging and its economic cost was under 
heated debate a decade ago with many exaggerated claims on the extent 
of the problem. To better inform the industry's policy on this issue, 
AF&PA commissioned its own study in 2004 to assess the economic impact 
of illegal logging on timber production and trade. The report concluded 
that up to 10 percent of global wood products production and a roughly 
similar share of global wood products trade are of suspicious origin. 
The report also estimated that eliminating global illegal logging would 
increase U.S. wood exports by over $460 million per year and increase 
the value of U.S. domestic shipments by $500-700 million annually.
    For these reasons, AF&PA was an active participant in a unique 
stakeholder coalition comprising the forest products industry, labor, 
environmental organizations, and importer groups, who worked together 
for the Congressional passage of the 2008 amendments to the Lacey Act. 
The 2008 amendments expanded the coverage of the Lacey Act by making it 
unlawful to import, export, transport, sell, receive, acquire, or 
purchase in interstate or foreign commerce any plants or products--
including wood and paper--made of plants that are taken or traded in 
violation of the laws of a federal, state, or foreign law. The plants 
or products are considered illegally sourced when they are stolen, 
taken from officially protected or designated areas, taken without or 
contrary to required authorizations or on which appropriate royalties, 
taxes, or stumpage fees have not been paid, or are subject to export 
bans.
    The amendments also require importers to file a declaration 
identifying the country of harvest, the genus and species of plants 
contained in the products, and the unit of measure. The declaration 
requirement, administered by the Animal and Plant Health Inspection 
Service (APHIS) of the U.S. Department of Agriculture, already applies 
to imports of solid wood products but has not yet been phased-in to 
composite wood products or to pulp and paper, among others.
Impact of the 2008 Lacey Act Amendments
    The 2008 Lacey Act Amendments brought heightened international 
awareness to the illegal logging issue and introduced a strong 
incentive throughout the global supply chain to ensure the legality of 
forest products. Chatham House, a UK-based nonprofit on international 
and current affairs, has documented welcome reductions in illegal 
logging or trade over the past few years and identified the Lacey Act 
Amendments as part of the reason. Also, the 2008 amendments lead the 
way for similar illegal logging regulations in other major import 
markets, including the European Union Timber Regulation and the 
Australian Illegal Logging Prohibition Act.
    Looking at one important segment of the forest products industry, 
the 2008 Lacy Act Amendments appear to have been an important factor 
behind the increase in U.S. exports of hardwood lumber and the U.S. 
exports' share of global exports, particularly sales to China. Market 
developments for U.S. hardwood lumber is particularly germane in 
assessing the effectiveness of the 2008 amendments because it competes 
with tropical hardwood lumber originating from countries where illegal 
logging has been an issue.
    U.S. hardwood lumber exports have increased by more than 70% over 
the past four years. During the same period, exports from almost all 
other leading hardwood lumber producing countries have been flat or 
declining.
    Developments in the China market are particularly important 
indicator since that country is a major destination for U.S. hardwood 
lumber as well as tropical hardwood lumber and where the lumber is 
processed and re-exported to the U.S. and other major markets as 
furniture and other consumer products. According to China's trade 
statistics, hardwood lumber imports from the U.S. have been rising over 
the past several years. In 2012, hardwood lumber imports from the U.S. 
increased 5%, while imports from other sources declined 6%. There is 
anecdotal information indicating that the pickup in demand for U.S. 
hardwoods is coming from both domestic customers and from buyers in the 
Far East who reportedly are looking for hardwoods from reliable and 
legal sources. Many U.S. hardwood timber mills are small, family-owned 
businesses so the Lacey Act provides significant economic boost to 
American rural businesses and jobs.
Implementation of the 2008 Lacey Act Amendments
    Implementation has not been problem free. Our industry has worked 
within a wide coalition including importers, industry, environmental 
groups, labor organizations, retailers, and others to develop consensus 
recommendations to the federal agencies on implementation of the Lacey 
Act Amendments. The consensus group provided the federal agencies with 
two sets of detailed documents (in 2009 and 2010) encouraging the 
agencies to use their rulemaking authority to clarify and streamline 
the requirements for industry to comply with the Lacey Act. As recently 
as August 2011, the consensus group submitted a joint statement to 
APHIS proposing a process for addressing outstanding technical issues.

    The following are AF&PA's recommendations:

      First and foremost, the administration was mandated by 
Congress to produce a report on implementation issues within two years 
of passage of the 2008 amendments. This report has still not been 
completed. Without the report, it is difficult for Congress and private 
sector stakeholders to assess whether the understanding of the 
outstanding implementation issues are best resolved administratively or 
by legislative changes. We urge members of this committee to formally 
request that the implementing agencies provide a date certain for the 
release of the report so that Congress and the public may have access 
to the information needed to determine the best course of action for 
solving the identified problems with implementation.
      We believe that the declaration requirement is an 
important tool in ensuring that businesses all along the supply chain--
harvesting operations, manufacturers, brokers, importers, and 
retailers--become a part of the solution through joint action. The idea 
behind the 2008 amendments was not a heavy-handed government system of 
regulation, but a requirement that put the burden on the supply chain 
to exercise due care in knowing the source of the raw material.

        The implementation of the declaration requirement is a work in 
        progress. Several paper companies that have implemented 
        internal fiber tracking systems have told AF&PA that it will be 
        very difficult to identify the genus and species of the wood 
        fiber they use at their paper mills on a shipment-by-shipment 
        basis. Typically, their wood fiber comes from low-risk North 
        American sources.

        AF&PA would support constructive proposals that allow greater 
        flexibility for importers of composite wood and pulp and paper. 
        One option is provide a de minimis exemption to cover the odd 
        wood and pulp source where the mill cannot guarantee complete 
        knowledge of the country of harvest or the species. This would 
        provide importers more flexibility and reduce the liability of 
        having to verify and declare 100 percent knowledge of the 
        species and harvest location of imports.

      AF&PA believes that the Lacey Act Amendments should not 
apply to plants and plant products manufactured or imported prior to 
the enactment of the amendments. We agree that it is unreasonable to 
expect importers to obtain complete supply chain information pre-May 
2008. Specific language could be developed by stakeholders that would 
preclude unintended gaps.
      In the wake of the raid on the facilities by officers of 
the U.S. Fish and Wildlife Service on facilities of Gibson Guitars in 
2011, a great deal of concern was expressed by some in the musical 
instruments industry and by individual musicians about possible 
confiscation of musical instruments when entering or leaving the 
country. To assuage these concerns, Federal agencies should issue clear 
guidance that enforcement action will not be taken against individual 
consumers. There is no precedent in the Lacey Act's long enforcement 
history of the government targeting end users of individual products.
      The 2008 amendments reinforce and support the laws of 
other countries concerning the management and trade of plants and plant 
products. As stated above, a Lacey Act violation is triggered by laws 
concerning the way plants and plant products are taken, possessed, 
transported, imported, or exported. Bans and restrictions on exports of 
raw materials such as logs and sawwood are common laws in tropical 
countries and are directly linked to forest management and protection 
efforts. In countries where corruption is common or where there is weak 
governance, these laws are an important tool in controlling large 
exports of illegally logged timber.
      Finally, we believe that adequate funding for federal 
agencies responsible for carrying out the Lacey Act mandate is critical 
to ensure the full implementation of the Act. This should include 
funding for international programs that educate foreign governments and 
businesses on how to comply with the Lacey Act.
Conclusion
    Given that the U.S. is the largest importer of forest products, 
with proper implementation and enforcement, the Lacey Act can be an 
important tool for protecting forests around the world and controlling 
international trade in illegally logged and traded plants and plant 
products. By fighting illegal logging, the Lacey Act also is leveling 
the competition in the international wood market. We understand that 
many Asian manufacturers of wood products are returning to U.S. 
hardwood to avoid sourcing from questionable suppliers. This helps in 
preserving and growing jobs in U.S. communities.
    As with any other law, there is room for improvement in the manner 
the act is being implemented and enforced. We believe the first thing 
the federal agencies need to do is issue their report on the 
implementation and operation of the Lacey Act Amendments. If it is 
determined that the Act doesn't provide sufficient administrative 
authority and legislative changes are still needed, we would be glad to 
work with Congress to implement technical changes that would improve 
the effectiveness of the Lacey Act without diminishing its objectives.
                                 ______
                                 

        Statement submitted on behalf of the World Wildlife Fund

    World Wildlife Fund (WWF) appreciates this opportunity to provide 
written testimony to the House Natural Resources Subcommittee on 
Fisheries, Wildlife, Oceans and Insular Affairs for its May 16, 2013 
hearing on illegal logging and the 2008 Amendments to the Lacey Act.
    Forests have been at the heart of WWF's work for half a century. 
Invaluable to wildlife and people, forests house over two-thirds of 
known terrestrial species and act as an important source of livelihood 
for over 1.6 billion people. Nonetheless, every year the world loses an 
area larger than the state of New York to deforestation. An important 
contributor to this annual forest loss and degradation is illegal 
logging and the associate trade in illegally sourced wood products. A 
July 2010 study released by the London-based think tank Chatham House 
estimated that at the beginning of this century in five of the top ten 
most forested countries, at least half of the trees cut were felled 
illegally.\1\
---------------------------------------------------------------------------
    \1\ Chatham House. ``Illegal Logging and Related Trade: A global 
Response'', prepared by S. Lawson and L. McFaul, 2010.
---------------------------------------------------------------------------
    The impacts of illegal logging are devastating. Perpetrators often 
deliberately target remaining high-conservation-value forests, 
including protected areas, which contain the highly valuable species 
that have been over-exploited elsewhere. Economically speaking, illegal 
timber products depress world timber prices, disadvantaging U.S. 
companies that produce and sell legally sourced forest products. 
Studies have estimated that the U.S. wood products industry loses as 
much as $1 billion annually from illegal logging.\2\
---------------------------------------------------------------------------
    \2\ Seneca Creek Associates, LLC, and Wood Resources International, 
LLC. 2004. ``Illegal'' Logging and Global Wood Markets: The Competitive 
Impacts on the U.S. Wood Products Industry'', prepared for American 
Forest & Paper Association.
---------------------------------------------------------------------------
    In 2010 there was rising optimism, with reports noting that illegal 
logging declined as much as 25% worldwide in the millennium's first 
decade.\3\ However, more recent studies have shown that illegal loggers 
are becoming more organized and sophisticated in their tactics.\4\ It 
is clear that, while the 2008 Lacey Act Amendments contributed to the 
decline seen in the last decade, cartels involved in illegal logging 
are learning the loopholes and fighting back. Recent estimates suggest 
that between 50 and 90% of all logging in key producing tropical 
countries is illegal, with the economic value of global illegal logging 
between $30 and $100 billion, or 10-30% of global wood trade.\5\
---------------------------------------------------------------------------
    \3\ Chatham House. ``Illegal Logging and Related Trade: A global 
Response'', prepared by S. Lawson and L. McFaul, 2010.
    \4\ Nellemann, C., INTERPOL Environmental Crime Programme (eds). 
2012. Green Carbon, Black Trade: Illegal Logging, Tax Fraud and 
Laundering in the Worlds Tropical Forests. A Rapid Response Assessment.
    \5\ INTERPOL/World Bank. 2009. CHAINSAW PROJECT An INTERPOL 
perspective on law enforcement in illegal logging. INTERPOL General 
Secretariat, Lyon.
---------------------------------------------------------------------------
    But sobering statistics like these do not mean we throw up our 
hands, declare the 2008 amendments as ineffectual, and cede the world's 
forests to illegal loggers. Rather, this is the time to buckle down and 
provide U.S. government agencies the resources they need to fully 
implement the Lacey Act. This will not only benefit the wildlife and 
communities that depend on forests for their immediate survival, but 
will level the playing field for those U.S. businesses acting honestly. 
Based on financial data in the Global Trade Atlas, over the last four 
years, U.S. hardwood lumber exports have risen by more than 70%. In 
2012, the U.S. share of global hardwood lumber trade exceeded 20% for 
the first time--rising from 13% in 2008. Although this cannot be wholly 
attributed to the 2008 Lacey Act Amendments, there are definite 
correlations. In addition, recognizing the environmental and economic 
benefits of the 2008 Lacey Act Amendments, the European Union and 
Australia have passed similar legislation. WWF urges the Committee to 
assist stakeholders, including industry, labor, and environmental 
groups, in strengthening the Lacey Act Amendments and fully implement 
them across relevant U.S. government agencies.
Illegal Logging's Impacts:
The Russian Far East
    The forests of the Russian Far East (popularly called ``the Ussuri 
Taiga'') support extraordinary biological diversity, including nearly 
all of the world's remaining Amur tigers (around 450) and Far Eastern 
leopards (35). These rich temperate forests also support the 
traditional income generation activities of tens of thousands taiga 
villagers, such as pine nut collecting, hunting, sable trapping, and 
forest beekeeping. But the Ussuri Taiga is being pushed to the edge of 
destruction due to illegal logging by a violent ``forest mafia'' which 
conducts industrial-scale timber theft largely to supply Chinese 
furniture and flooring manufacturers, many whom in turn export to the 
U.S. and EU. To demonstrate the scale of this criminal activity, WWF 
Russia conducted an analysis that showed that the volume of Mongolian 
oak logged for export exceeded the volume authorized for logging by 
200%--meaning that at least half of the oak being exported across the 
border to China was stolen. Further analysis of export data showed that 
2010 was a mild year--in 2007 and 2008 the oak harvest was four times 
as large.
    This widespread illegality has four primary negative effects:

      Ecological. Illegal logging severs vital taiga food 
chains by removing the most productive wildlife food sources--Korean 
pine and Mongolian oak. Pine nuts and acorns are the main food source 
for wild boars and red deer, which in turn are the primary prey of the 
Amur tiger. The overharvesting of these tree species became so extreme 
that Prime Minister Putin completely banned the logging of Korean pine 
in 2010. But the plunder of oak resources continues unabated and total 
collapse of this wildlife food resource is imminent. Furthermore, as 
timber supplies dwindle illegal loggers are moving more and more into 
ecologically-sensitive forests like riparian buffers and wildlife 
reserves.
      Social. The vast majority of forest villagers receive no 
economic benefit from illegal logging. Instead, their traditional 
livelihoods of hunting, nut gathering and beekeeping are under threat. 
For instance, a sharp conflict has erupted between logging brigades and 
beekeepers in the Dalnerechensk region over the illegal logging of 
linden, a key honey species.
      Rule of law. Money from foreign purchasers, including the 
U.S., washes through China to the Ussuri Taiga, where it finances 
massive corruption in the Russian Forest Service and police. Bribed 
forest rangers and policemen essentially leave huge swathes of rural 
Russia at the mercy of a forest mafia that uses intimidation and 
violence to maintain control.
      Economic. In 15 years illegal logging has nearly tapped 
out the timber supply that should have supported legal forest industry 
for decades. Legal actors cannot compete in a market awash with illegal 
timber. Hope for economic development in depressed Taiga regions is 
disappearing as the resource is stolen for export.

    WWF Russia works with dedicated forest rangers and village 
activists to combat illegal logging in the Ussuri Taiga. Their stories 
demonstrate what's at risk both for the forest and local communities. 
Men like Anatoliy Kabanets, who has been hounding illegal loggers for 
15 years as a forest ranger, policeman, private forest guard and WWF 
specialist. Anatoliy's work has led to the numerous prosecutions and 
has successfully driven illegal loggers from key wildlife reserves. But 
it also cost him his oldest son, who died in a traffic accident 
believed to be rigged by illegal loggers. Faced day after day by 
glaring corruption and lawlessness, many others in his place have given 
in to apathy and cynicism. But Anatoliy is too dedicated to the Ussuri 
Taiga and the people who need it to walk away.
    Or Konstantin Dobrashevsky, a local legislator who organized his 
neighbors to monitor and report illegal logging of Korean pine, the 
source of a vital economic resource for the village--pine nuts. In 
response illegal loggers organized a campaign of intimidation against 
Konstantin and his neighbors, shooting out the windows of their homes 
and leaving bullets on their doorstep to be found by their children. 
Undaunted, Konstantin has continued to use his legislative post to 
organize illegal logging investigations, audit the actions of the 
deeply corrupt State Logging Company, and defend the rights of village 
beekeepers and hunters against illegal loggers. He told WWF Russian 
``[i]t gets better when they know you aren't afraid of them.''
Peru
    The mahogany trees of the Amazon are some of the most coveted and 
expensive woods on earth, with a single tree capable of fetching tens 
of thousands of dollars by the time it reaches the United States and 
Europe. For years, Brazil was a leading exporter of mahogany but a 2001 
moratorium on logging big-leaf mahogany forced importers to shift their 
attention to new sources. Peru quickly rose to become the world's 
largest supplier. Over a decade later, populations of mahogany and 
another highly sought species, Spanish cedar, have precipitously 
declined, leaving many of Peru's most precious watersheds without its 
most valuable trees.
    To make matters worse, much of the mahogany harvested was done so 
illegally. In 2005 alone, 20 of the 24 (83%) exporters of mahogany 
exported unlawful mahogany trees and products to the U.S. and 
Europe.\6\ This has continued into the present day, with estimates 
putting illegal activity as accountable for three-fourths of the annual 
Peruvian timber harvest.\7\ Now, the last stands of mahogany and 
Spanish cedar are nearly all in national parks, territorial reserves, 
or native Indian lands. This has led to a two-fold problem: loggers 
have begun to target new tree species with far less protections, and 
others still have ventured into restricted lands to target the last of 
Peru's mahogany and Spanish cedar.
---------------------------------------------------------------------------
    \6\  AIDESEP (2007) Illegal logging and international trade in 
mahogany from the Peruvian Amazon, AIDESEP, Rainforest Foundation 
Norway. http://www.illegal-logging.info/uploads/Mahogany_reportEng.pdf.
    \7\ Wallace, S. (2013) Mahogany's Last Stand, National 
Geographic.com April, 2013. http://ngm.nationalgeographic.com/2013/04/
mahogany/wallace-text.
---------------------------------------------------------------------------
    Rampant illegal logging prompted U.S. action in 2007 when Congress 
required a series of reforms by Peru as a prerequisite for a free-trade 
agreement. This included implementation of a plan on mahogany that 
would comply with the Convention on International Trade in Endangered 
Species of Wild Fauna and Flora (CITES). But changes have been slow to 
take effect, with minimal results for many of the remote communities 
that have watched their forest be decimated by organized illegal 
logging cartels.
    Despite these challenging circumstances, there are positive stories 
coming out of Peru, including the Consorcio Forestal Amazonico (CFA), 
holders of Peru's largest individual concession at 180,000 hectares. 
CFA is complying with Forest Stewardship Standards (FSC) and planning 
for a sustainable future.\8\ Scott Wallace, in an article for National 
Geographic titled ``Mahogany's Last Stand,'' notes that CFA is ``trying 
to do things right.'' \9\ The company's concession may lack a high 
density of valuable mahogany, but as the article reveals, they are 
targeting over ``20 different species with commercial potential'' in a 
cyclical approach that they hope will allow them to harvest 
indefinitely. It is the 2008 Lacey Amendments, as well as the newly 
enacted European Union Timber Regulations (EUTR) and the Australian 
Illegal Logging Prohibition Bill, that create the market for CFA to 
sell its legal, sustainable wood thereby encouraging new ways of doing 
business within Peru's forest industry.
---------------------------------------------------------------------------
    \8\ Global Wood, Consorcio Forestal Amazonico SAC; http://
www.globalwood.org/company/mgodetail.asp?id=22778.
    \9\ Wallace, S. (2013) Mahogany's Last Stand, National 
Geographic.com April, 2013. http://ngm.nationalgeographic.com/2013/04/
mahogany/wallace-text.
---------------------------------------------------------------------------
Economically Speaking: WWF's Work With The Global Timber Industry:
    Every business is in the forest business. Whether a company uses 
wood in its production or consumes wood fiber in paper or paper 
products, every company depends on the forest industry in some form or 
another. WWF believes that if companies practice sound forest 
management and responsible wood sourcing, it is possible to supply the 
world's needs for timber while also conserving the biodiversity of the 
world's last, great forest areas in places such as the Amazon, Borneo, 
the Congo Basin and the Russian Far East.
    WWF's Global Forest & Trade Network (GFTN) works with companies 
from all across the global forest products supply chain that are 
willing to lead the industry in responsible forest management and 
trade. First established in 1991, GFTN assists almost 300 companies 
world-wide in understanding the forest origin of their wood products, 
and implementing responsible sourcing action plans.
    Through its fieldwork and its collaboration with GFTN participants, 
WWF has witnessed first-hand how the 2008 Lacey Act Amendments have 
positively changed the practices of U.S. companies and their suppliers, 
strengthening their sourcing practices and leveling the playing field 
for U.S. companies that produce and sell legally sourced forest 
products. Attached to our testimony you will find a factsheet on Lacey 
that describes the law, its effects on industry, and includes quotes 
from different American companies that publicly articulate the positive 
impacts of the Lacey Act.
Conclusion
    By motivating companies to ensure that the timber used in their 
products is legally and responsibly harvested, the 2008 Lacey Act 
Amendments are a key driver in the global fight to stop illegal 
logging. But as crime cartels become more organized and sophisticated, 
so too must the legislation that prevents the systematic destruction of 
our most precious natural resources. The 2008 Lacey Act Amendments were 
a step in the right direction, and progress like this should be further 
supported by the U.S. Congress. Creating protected lands is not enough; 
without active enforcement measures to prevent illegal logging, many of 
the world's most biodiverse habitats will be lost. WWF urges the 
Committee to assist stakeholders, including industry, labor, and 
environmental groups, that have created a consensus document listing 
next steps for strengthening the Lacey Act Amendments to fully 
implement these suggestions with the relevant U.S. government agencies.
About World Wildlife Fund
    WWF is the world's largest conservation organization, working in 
100 countries for nearly half a century to build a future in which 
people live in harmony with nature. With the support of almost 5 
million members worldwide, WWF is dedicated to conserving nature and 
reducing the most pressing threats to the diversity of life on Earth.
                               Attachment

 The Lacey Act: Good for Forests, Good for Responsible U.S. Businesses

WHY ARE THE 2008 LACEY ACT AMENDMENTS SO IMPORTANT?
    As one of the world's largest producers and consumers of forest 
products, the United States plays a key role in deterring illegal 
logging and associated trade. A 2010 Chatham House study estimated that 
illegal wood and paper imports into the U.S. could represent almost 4% 
of all U.S. wood and paper imports, valued at $4 billion.\1\ 
Deforestation and forest degradation caused by illegal logging often 
results in devastating impacts to local communities, wildlife, and 
ecosystem services such as clean air and water. Illegal logging also 
disadvantages U.S. companies that produce and sell legally sourced 
forest products. Traders of illegal timber can flood the market with 
cheap products, creating an unlevel playing field. The Lacey Act is 
important in maintaining a fair market in which responsible U.S. 
companies can compete.
---------------------------------------------------------------------------
    \1\ Chatham House. 2010. Illegal Logging and Related Trade: 
Indicators of Global Response. Prepared by S. Lawson and L. MacFaul.
---------------------------------------------------------------------------
WHAT DOES THE LAW SAY?
    The 2008 Amendments to the Lacey Act of 1900 represent the first 
piece of U.S. legislation to combat the trade of illegal plants and 
plant products including timber, wood, and paper products. The law 
addresses illegal logging in three ways:

      It prohibits all trade of plant and plant products that 
are illegally sourced from any U.S. state or foreign country;
      Requires a declaration of the country of origin of 
harvest, value, volume, and species name of all plants contained in 
imported products; and
      Establishes penalties for violations of this law 
including forfeiture of goods and vessels, fines, and jail time.
HOW DOES ILLEGAL LOGGING AFFECT INDUSTRY?
    Studies have estimated that the U.S. wood products industry loses 
as much as $1 billion annually from illegal logging.\2\ The World Bank 
estimates annual global economic loss from the illegal trade to be 
approximately $10 billion, and losses due to tax evasion and royalties 
on legally sanctioned logging are valued at approximately $5 
billion.\3\ Illegal logging depresses global prices for timber and 
timber products by up to 16%.\4\ These lower values in price weaken the 
U.S. forest industry's ability to compete in the global marketplace and 
threaten the industry's job security.
---------------------------------------------------------------------------
    \2\ Seneca Creek Associates, LLC, and Wood Resources International, 
LLC. 2004. ``Illegal'' Logging and Global Wood Markets: The Competitive 
Impacts on the U.S. Wood Products Industry. Prepared for American 
Forest & Paper Association.
    \3\ The World Bank. 2006. Strengthening Forest Law Enforcement and 
Governance: Addressing a Systemic Constraint to Sustainable 
Development.
    \4\ Chatham House. 2010. Illegal Logging and Related Trade: 
Indicators of Global Response. Prepared by S. Lawson and L. MacFaul.
---------------------------------------------------------------------------
INDUSTRY SUPPORT FOR RESPONSIBLE FORESTRY AND TRADE
    In addition to strong support from the NGO community, the Lacey Act 
Amendments have garnered widespread support from U.S. businesses that 
believe in the importance of legal timber trade. Many U.S. companies 
continue to publicly articulate the positive impacts of the Lacey Act 
in reducing illegal logging, raising awareness and attention on the 
part of companies about the forest origin of their wood products, and 
supporting the U.S. economy, jobs, and their businesses.
    The following quotes are from companies that participate in WWF's 
Global Forest & Trade Network (GFTN), expressing their support for this 
important tool that reinforces their commitments to responsible 
forestry and trade.
Hewlett Packard Company (NYSE: HPQ)
    ``Having the Lacey Act compliance requirements in place supports 
HP's efforts towards achieving our responsible sourcing goals.''--
Engelina Jaspers, Vice President, Environmental Sustainability
Domtar Corporation (NYSE: UFS)
    ``Domtar strongly believes that illegal logging is a serious global 
problem with detrimental environmental and economic consequences and we 
support the efforts of governments to continue working on this very 
important issue. A successful implementation of the Lacey Act should 
help level the playing field for all companies, recognizing the 
importance of using only legally and responsibly harvested wood.''--
Lewis Fix, Vice President, Sustainable Business and Brand Management
Williams-Sonoma, Inc. (NYSE: WSM)
    ``The Lacey Act legislation has been pivotal in helping us deliver 
on our commitment to eliminate unwanted and unknown wood from WSI's 
supply chain, by motivating our suppliers to ensure that the timber 
used in their products is legally and responsibly harvested.'' --David 
Williams, Sustainable Development Analyst
Tetra Pak Inc.
    ``The Lacey Act is an important tool that supports global companies 
like Tetra Pak that have long been committed to doing what's right for 
the environment. The Lacey Act complements our efforts to reduce 
illegal logging and warrants a code of conduct which is implemented 
wide across all players in the wood and timber market.'' --Elisabeth 
Comere, Director, Environment and Government Affairs
IKEA
    ``Wood is one of IKEA's most important raw materials, which is why 
we have been working on sustainable wood sourcing for more than a 
decade. Harmonized international legislation against the unlawful 
trading and handling of harvested wood is an important tool to curb 
illegal logging and a stepping stone towards sustainable forestry. 
Additionally, when fully and efficiently implemented, it will provide a 
common approach for all businesses to adhere to.''--Anders Hildeman, 
Global Forestry Manager, IKEA
ABOUT WORLD WILDLIFE FUND
    WWF is the world's leading conservation organization, working in 
100 countries for nearly half a century to build a future in which 
people live in harmony with nature. With the support of almost 5 
million members worldwide, WWF is dedicated to conserving nature and 
reducing the most pressing threats to the diversity of life on Earth. 
Visit www.worldwildlife.org to learn more.
ABOUT GFTN
    The Global Forest & Trade Network is WWF's initiative to eliminate 
illegal logging and drive improved forestry in the world's most 
valuable and threatened forests, by engaging with companies across the 
forest products supply chain that are committed to legal and 
responsibly sourced forest products. First established in 1991, GFTN 
assists almost 300 companies world-wide in understanding the forest 
origin of their wood products, and implementing responsible sourcing 
action plans. GFTN seeks to strengthen market conditions that help 
conserve forests, while providing economic and social benefits for the 
businesses and people that depend on them. With combined annual sales 
of $70 billion, trading by GFTN participants represents 20% of all 
forest products bought or sold internationally every year. For more 
information on WWF's Global Forest & Trade Network visit 
gftn.panda.org.
                                 ______
                                 
    Dr. Fleming. As I indicated at the beginning of this 
hearing, this is just the first in a series of hearings on the 
Lacey Act. And it is likely that a second oversight hearing 
will be held within the next 2 months.
    I want to thank Members and staff for their contributions 
to this hearing. And thereby being no further business, the 
Subcommittee is hereby adjourned.
    [Whereupon, at 12:31 p.m., the Subcommittee was adjourned.]

    [Additional material submitted for the record follows:]

             Statement of the National Wildlife Federation

    The National Wildlife Federation appreciates the opportunity to 
submit the following statement for the record of the oversight hearing 
on the 2008 Lacey Act Amendments:
    The National Wildlife Federation (NWF) is America's voice of 
conservation, protecting wildlife for our children's future. With 47 
state affiliates and over four million members and supporters across 
the country, including hunters, anglers, gardeners, and other outdoor 
enthusiasts, NWF has been in the forefront of national and 
international efforts to conserve wildlife and natural habitats 
including forests, for the last 77 years. Illegal logging has long been 
one of the major threats to the world's remaining forests, particularly 
in developing countries. Damage includes thefts from national parks and 
other protected areas, loss of habitat for many endangered species, and 
conflicts with local communities who are dependent on forests for their 
livelihoods. NWF believes that a range of tools are needed to help save 
the world's remaining tropical rainforests and other natural habitats, 
and we continue to support the Lacey Act Amendments of 2008 because 
they provide an important such tool. Significantly, the Lacey 
Amendments resulted from a major bi-partisan effort to promote both 
forest conservation and fair treatment for companies who work to 
eliminate illegal wood products from their supply chains.
    NWF has worked for years to promote sustainable forest management, 
and to provide incentives for best practices in the industry. Members 
of our staff have held leadership positions on the board of a key 
organization in this space, the Forest Stewardship Council (FSC), which 
established voluntary ``sustainability standards'' for forest products 
around the globe through consensus between industry and civil society. 
FSC offers not only clear environmental and social standards, but also 
a chain of custody system, that can be relied upon by businesses to 
demonstrate their sustainability credentials. But honest firms, and 
market mechanisms like the FSC, have a hard time competing when 
significantly cheaper, illegal wood enters the supply chain in global 
commerce. The Lacey Act Amendments help to level this playing field--
they make it illegal to trade in and to import to the U.S. forest 
products that were harvested or traded illegally in the country or 
state where they came from. This provides an excellent complement to 
the FSC's private sector certification standards.
    NWF's analysis of recent market data reveals that the Lacey 
amendments have begun to demonstrate the benefits that they promised, 
even though they are not yet fully implemented: they are bolstering 
forest conservation efforts by countries beset by criminal logging 
enterprises; and they are leveling the playing field, and, in some 
cases, providing an advantage to industry actors who obey the law. One 
reason for this success is that the leadership shown by the United 
States in amending our century old Lacey Act has encouraged other 
countries to step up with their own measures. Soon after passage of the 
Lacey Act Amendments, the European Union established its own Timber 
Regulation and the Australian Parliament passed the Illegal Logging 
Prohibition Act. Other nations are considering similar steps and/or 
improving enforcement of laws against illegal logging. These laws in 
the U.S. and other major wood consuming countries are helping to back 
up the efforts of developing countries and emerging economies who are 
struggling against ``forest mafias''. It would be a shame for the U.S. 
to undercut these valiant measures to fight corruption, violence and 
theft, just as they are ramping up and showing results.
    We are pleased that many U.S. based forest products producers and 
manufacturers joined NWF in support of the 2008 Lacey Act Amendments, 
and the reasons are not hard to understand: they have a hard time 
competing with the illegal loggers who undercut them by stealing the 
trees, or evading the payment of fees to land owners or the costs of 
good land management. Recent trade figures suggest that the timber 
industries of countries like the U.S., who have laws such as Lacey in 
place, are gaining market share: for example, the imports of hardwood 
lumber from the U.S. to China rose in 2012 by 5%, while imports to 
China from other areas declined by 6%. Since these imports are mostly 
for processing and re-export to consuming nations, this is one 
indication of the power of legality requirements, such as Lacey, to 
influence the trade. Market mechanisms have the potential to discourage 
illegal logging and to push for further transformation of the wood 
products industries toward legal and sustainable production for the 
long term. Having taken the lead on this market improvement, the United 
States should not abandon the hardworking companies, many of them small 
businesses, who are obeying the law.
    Some firms have complained about the costs of compliance with the 
Lacey Act, and we have worked with a coalition to help smooth out some 
of the wrinkles of early implementation. There may be additional 
improvements which can be made in the documentation system, and we will 
continue to collaborate on those.
    We believe that FSC certification is a useful tool to help 
determine legal provenance of wood sourcing. But in general, we think 
that industries can be expected to understand their own supply chains, 
and to assure that they are not trafficking in illegal goods--this is a 
normal cost of doing business, and timber products should not be 
treated any differently. The Lacey Act is part of the American 
tradition of rewarding honest businesses which follow the rules, since 
it promotes increased transparency about where products come from. 
While not yet fully implemented, the Lacey amendments are on the right 
track--they should be fully put in place, with full funding for the 
modest electronic data management systems and equipment that will make 
them more effective and efficient.
                                 ______
                                 

         [From Hardwood Floors Magazine, October/November 2012]

       With Gibson Settlement, `Due Care' is Slightly More Clear
          (By Marcus Asner, Samuel Witten & Katherine Ghilain)
    The Criminal Enforcement Agreement that Gibson Guitar signed with 
the Department of Justice (DOJ) brings some clarity to the Lacey Act's 
mandate that companies . . .

    While not a binding legal precedent for other cases, the compliance 
program included in the Criminal Enforcement Agreement that Gibson 
Guitar recently signed with the Department of Justice (DOJ) brings 
welcome clarity to the Lacey Act's mandate that companies exercise 
``due care'' when identifying the source of a wood product.
    The Criminal Enforcement Agreement resolved a nearly three-year 
investigation and set of legal proceedings concerning wood that was 
allegedly illegally harvested and/or exported from Madagascar and 
India. Gibson promised to pay a $300,000 penalty and a $50,000 
``community service payment,'' cooperate in Lacey Act investigations 
and prosecutions, and drop forfeiture challenges with respect to some 
of the wood previously seized by DOJ.
    Perhaps most significant for the many industries directly affected 
by the Lacey Act--including wood flooring importers, manufacturers, 
distributors and installers--was the rigorous Lacey Act Compliance 
Program that Gibson was required to implement as part of the agreement. 
The compliance program provides some welcome clarity on the contours of 
the Act's much-discussed ``due care'' requirement.
    The Lacey Act requires that companies exercise ``due care'' in 
identifying the source of their goods, but does not spell out what has 
to be done to meet this standard. According to DOJ, ``due care means 
that degree of care which a reasonably prudent person would exercise 
under the same or similar circumstances,'' and it ``is applied 
differently to different categories of persons with varying degrees of 
knowledge and responsibility.'' The standard is generally high in a 
commercial context. With few precedents for guidance, both regulators 
and affected industries naturally will look to the Gibson outcome for 
guidance and to supplement industry customs and standards.
Gibson's Program
    As explained in section 2.3 of the Gibson Compliance Program, the 
Lacey Act due care requirement is designed to ``minimize the risk of 
purchasing plant products that were harvested or traded illegally.'' To 
comply with this expectation, the program requires Gibson to follow 
these steps before buying any wood or wood product:

    1. Work with suppliers to ensure they can implement Gibson's 
policies, which include procuring wood from either recycled sources or 
forests where legal harvest and chain of custody can be verified, and 
obtaining copies of all relevant import and export documentation and 
business or export licenses;
    2. Ask questions to gather information about suppliers and the 
source of the wood and wood products to determine whether the products 
meet Gibson's requirements for known/legal wood products;
    3. ``. . . Conduct independent research and exercise care before 
making a purchase,'' which may include everything from Internet 
research to consulting with U.S. or foreign experts or authorities and 
making site visits;
    4. Request sample documentation from suppliers to evaluate Lacey 
Act compliance and document validity;
    5. Make a determination prior to making a purchase based on all of 
the information collected;
    6. Maintain records of these efforts; and
    7. Decline to pursue the purchase if there is any uncertainty of 
legality.

    Section 3 of the Compliance Program sets forth Gibson's policies 
with respect to wood procurement, verification of foreign law and 
certifications/licenses, risk determinations, supply chain audits, 
employee training, record retention, and internal disciplinary actions 
for non-compliance.
Industry Implications
    Gibson's Lacey Act Compliance Program is binding only on Gibson and 
it is not meant as an official DOJ pronouncement of what ``due care'' 
is supposed to mean in other cases. That said, in the absence of other 
notable precedents, Gibson's program, as a practical matter, helps 
articulate the industry standard for due care.
    Companies engaged in the trade of wood should see the compliance 
program as a useful guide that may well help protect them from 
liability. There is no ``silver bullet'' solution to meeting the due 
care standard. But companies nevertheless would be well served to 
implement compliance programs reflecting procedures set out in Gibson's 
program, tailored to their own circumstances and supply chains. 
Adopting an appropriately adapted Gibson-style program will give a 
company a decent argument that it exercised ``due care'' and therefore 
complied with the requirements of the law, if it ever unwittingly ends 
up with some illegal wood and the feds come knocking. DOJ tries to take 
a consistent approach to enforcement, so the Gibson agreement, and 
particularly the compliance program, has practical precedential value, 
even if it is not binding as law on other companies and industries.
    International attention on illegal harvesting and environmental 
commerce is likely to increase. That, in turn, will heighten companies' 
exposure to civil and criminal enforcement actions under the Lacey Act. 
Wood products companies would be wise to review their policies and 
procedures and ensure that they have in place comprehensive programs 
like Gibson's. This will help insulate them from Lacey Act liability 
and help further the sustainability of the natural resources that are 
critical to their operations.
                                 ______
                                 

    The documents listed below have been retained in the 
Committee's official files.

      Bloomberg BNA, Daily Environmental Report 
TM, Gibson Guitar, Forfeiture, and the Lacey Act 
Strike a Dissonant Chord
      Congressional Research Report for Congress, The 
Lacey Act: Compliance Issues Related to Importing Plants and 
Plant Products

                                 # # #

                                     

     OVERSIGHT HEARING ON ``THE 2008 LACEY ACT AMENDMENTS.'' PART 2

                              ----------                              

                        Wednesday, July 17, 2013

                     U.S. House of Representatives

    Subcommittee on Fisheries, Wildlife, Oceans, and Insular Affairs

                     Committee on Natural Resources

                            Washington, D.C.

                              ----------                              

    The Subcommittee met, pursuant to notice, at 2 p.m., in 
room 1324, Longworth House Office Building, Hon. John Fleming 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Fleming, Runyan, Sablan, Shea-
Porter, and Lowenthal.
    Dr. Fleming. The Subcommittee will come to order. The 
Chairman notes the presence of a quorum.

    STATEMENT OF THE HON. JOHN FLEMING, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF LOUISIANA

    Dr. Fleming. Good afternoon. Today the Subcommittee will 
continue its oversight examination of the Lacey Act, by 
focusing on the provision of that law that requires American 
citizens to comply with the laws of foreign Nations.
    Article I of our Constitution stipulates that ``all 
legislative powers herein granted shall be vested in a Congress 
of the United States.'' While I am not a constitutional expert, 
I find nothing in that landmark document that allows the 
Congress to delegate law making authority to foreign countries. 
However, that is essentially what the Congress did in 1935, 
when the Lacey Act was amended to prohibit the importation of 
all wildlife taken contrary to a foreign law. If I had been a 
Member of the 74th Congress--by the way, I wasn't even born 
then--I would have voted against the provision, because it is 
simply wrong to force American citizens to comply with laws of 
other Nations.
    Regrettably, the 2008 amendments have significantly 
compounded this problem. Instead of having to comply with a 
limited number of foreign laws by expanding coverage to include 
plant and plant products, this has triggered literally tens of 
thousands of foreign laws.
    In addition, because of the Federal court decisions, the 
term ``foreign law'' has now been greatly expanded to include 
foreign regulations, foreign resolutions, and foreign decrees 
and, thanks to the 2003 U.S. v. McNab case, ``other such 
legally binding provisions that foreign governments may 
promulgate.''
    Based on testimony we received, there is no data base of 
those foreign laws and, frankly, the Federal enforcement 
agencies have no idea how many were triggered by the 2008 
Amendments. Yet, we are allowing our Federal courts to send our 
constituents to overcrowded Federal prisons for violating laws 
enacted not only by the British Parliament but also the 
National People's Congress of the People's Republic of China, 
the National Assembly of Venezuela, and the National Congress 
of Honduras.
    This is truly madness, and I agree with the Heritage 
Foundation that this ``violates one of the fundamental tenets 
of Anglo-American common law: that men of common intelligence 
must be able to understand what a law means. No one should be 
forced to run the risk of conviction and imprisonment for 
making a mistake under foreign law.''
    It is one thing for an American living abroad to comply 
with the laws where they are living. It is quite another to 
convict one of our citizens living here for violating the laws 
of one of the 192 countries recognized by the United Nations. 
The Lacey Act demands that you know every law, civil and 
administrative, as well as criminal, of every foreign land. 
This is simply wrong.
    During the course of today's testimony, I am interested in 
finding out from our distinguished panel of witnesses the 
legislative history explaining the rationale for requiring 
compliance with foreign laws, why the Congress has never 
provided a definition for the term ``foreign law,'' and why 
this provision is even necessary in the Lacey Act, that we are 
willing to sacrifice the freedom and liberty of our citizens.
    [The prepared statement of Dr. Fleming follows:]

  Statement of The Honorable John Fleming, Chairman, Subcommittee on 
            Fisheries, Wildlife, Oceans and Insular Affairs

    Good afternoon, Today, the Subcommittee will continue its oversight 
examination of the Lacey Act by focusing on the provision of that law 
that requires American citizens to comply with the laws of foreign 
nations.
    Article 1 of our Constitution stipulates that ``All legislative 
powers herein granted shall be vested in a Congress of the United 
States.''
    While I am not a constitutional expert, I find nothing in that 
landmark document that allows the Congress to delegate law making 
authority to foreign countries. However, that is essentially what the 
Congress did in 1935 when the Lacey Act was amended to prohibit the 
importation of all wildlife taken contrary to a foreign law.
    If I had been a member of the 74th Congress, I would have voted 
against that provision because it is simply wrong to force American 
citizens to comply with the laws of other nations.
    Regrettably, the 2008 Amendments have significantly compounded this 
problem. Instead of having to comply with a limited number of foreign 
laws, by expanding coverage to include plant and plant products this 
has triggered literally tens of thousands of foreign laws.
    In addition because of federal court decisions, the term ``foreign 
law'' has now been greatly expanded to include foreign regulations, 
foreign resolutions, and foreign decrees and thanks to the 2003 U.S. v. 
McNab case ``other such legally binding provisions that foreign 
governments may promulgate.''
    Based on testimony we received, there is no database of those 
foreign laws and frankly the federal enforcement agencies have no idea 
how many were triggered by the 2008 Amendments. Yet, we are allowing 
our federal courts to send our constituents to overcrowded federal 
prisons for violating laws enacted not only by the British Parliament 
but also the National People's Congress of the People's Republic of 
China, the National Assembly of Venezuela and the National Congress of 
Honduras.
    This is truly madness and I agree with the Heritage Foundation that 
this ``violates one of the fundamental tenets of Anglo-American common 
law: that ``men of common intelligence'' must be able to understand 
what a law means. No one should be forced to run the risk of conviction 
and imprisonment for making a mistake under foreign law.''
    It is one thing for an American living abroad to comply with the 
laws where they are living. It is quite another to convict one of our 
citizens living here for violating the laws of one of the 192 countries 
recognized by the United Nations. The Lacey Act demands that you know 
every law--civil and administrative as well as criminal--of every 
foreign land. This is simply wrong.
    During the course of today's testimony, I am interested in finding 
out from our distinguished panel of witnesses the legislative history 
explaining the rationale for requiring compliance with foreign laws, 
why the Congress has never provided a definition for the term ``foreign 
law'' and why this provision is even necessary in the Lacey Act that we 
are willing to sacrifice the freedom and liberty of our citizens.
                                 ______
                                 
    Dr. Fleming. At this time I am pleased to recognize the 
distinguished Ranking Member, the gentleman from the 
Commonwealth of the Northern Marianas, Congressman Sablan, for 
any opening statement he would like to make.

    STATEMENT OF THE HON. GREGORIO KILILI CAMACHO SABLAN, A 
DELEGATE IN CONGRESS FROM THE TERRITORY OF THE NORTHERN MARIANA 
                            ISLANDS

    Mr. Sablan. Thank you very much, Mr. Chairman. And good 
afternoon, everyone.
    The title of today's hearing poses a question that is 
simple enough to answer. We expect people from other countries 
who are visiting or operating a business in the United States 
to follow our laws. And so, of course, those countries should 
expect the same from Americans traveling or working within 
their sovereign territory. With that, we should all be able to 
call it a day and move on to more pressing business.
    The question posed by the Majority misses the point of the 
Lacey Act's foreign law provisions, which is to protect 
Americans from unwittingly buying seafood stolen from the 
waters of another country, or guitars made from illegal wood. 
It also ignores the interests Americans have in protecting 
wildlife abroad, and the fact that the Lacey Act is one of the 
most effective tools we have for doing that.
    Finally, the Lacey Act does not require U.S. citizens to 
comply with foreign laws. But, instead, bans trade in illegally 
harvested wildlife and plants.
    So, as we speak, the illegal timber trade is funding al-
Qaeda-linked terrorists. Ivory is helping Joseph Kony and the 
Lord's Resistance Army to continue to commit atrocities and 
destabilize Central Africa. And sophisticated criminal networks 
with helicopter, night vision goggles, and automatic weapons 
are profiting from killing the last rhinos on the planet.
    We should not muddy the waters by distorting the intent and 
effect of one of our strongest conservation laws. Rather, we 
should hold a hearing to ask what we can do to help this global 
criminal assault on the wildlife and habitats that Americans 
cherish, and that developing countries need to feed their 
people.
    Unfortunately, this Committee's Majority has ignored our 
requests for such a hearing. And that is a shame, because we 
should all benefit from hearing different perspectives on the 
kind of serious crime the Lacey Act works to deter and punish. 
But the Majority did not invite the Department of the Interior 
to discuss how additional resources for conservation, 
education, and natural resources law enforcement could turn the 
tide against criminal deforestation in South America. They did 
not invite the Department of State to learn about diplomatic 
efforts to curb demand for elephant ivory, rhino horn, and 
shark fin in East Asia. And they did not invite the Department 
of Defense to learn whether bringing a stop to poaching in 
Africa could make the United States a safer place. They did, 
however, choose to ignore all of this, all some very real 
challenges we face.
    We will not ignore these challenges. We have a 
responsibility on this Committee to address, head on, the 
threats to natural resources that Americans value. And we will 
not shirk that responsibility.
    The Lacey Act is a good and legitimate law, one of which we 
should be proud. That includes the foreign law provisions which 
have been on the books for more than 80 years. Every 
constitutional challenge to the Lacey Act has failed. But if 
the Majority wants to bring another one, then they should 
pursue that in the courts, not in our Committee. If Majority 
Members want to introduce legislation that would damage the 
Lacey Act, they are welcome to do so. But I would expect it 
would meet a similar fate as that of last year's anti-Lacey Act 
bills. In the meantime, we will do our best to highlight the 
depth and breadth of transnational wildlife and timber crime, 
and hope that they will join us together--join us so that we 
can take on those problems together.
    I welcome all of our witnesses, and I look forward to your 
testimony.
    And, Mr. Chairman, I ask for unanimous consent to enter 
into the record four items.
    The first is a United Nations Secretary General's report 
from May 2003 that references the link between poaching and 
other transnational organized criminal activities, including 
terrorism.
    The second is a statement from the U.S. Director of 
National Intelligence, James R. Clapper, during the worldwide 
threat assessment hearing in the Senate Select Committee on 
Intelligence on March 12, 2003. His testimony states that 
elicit trade in wildlife, timber, and marine resources 
constitute a multi-billion-dollar industry annually, and that 
these criminal activities are linked to insurgent groups and 
transnational organized crime organizations.
    The third is President Obama's Executive Order from July 1, 
2013, which states that combating wildlife trafficking is in 
the national interests of the United States, because poaching 
operations have expanded beyond small-scale opportunistic 
actions to coordinated slaughter commissioned by armed and 
organized criminal syndicates.
    And finally, the fourth is a recently released report on 
the global security implications of the illegal wildlife trade 
from the International Fund for Animal Welfare, which 
demonstrates that we urgently need to increase our attention 
and resources to fully understand the pathways of the illegal 
wildlife trade and connections to all the illicit activities, 
such as arms trafficking, corruption of--militancy and 
terrorism, all of which threaten our global security. Mr. 
Chairman, I thank you very much.
    Dr. Fleming. Without objection, so ordered.
    [The information submitted for the record by Mr. Sablan has 
been retained in the Committee's official files:]
    Dr. Fleming. The gentleman yields his time.
    [The prepared statement of Mr. Sablan follows:]

  Statement of The Honorable Gregorio Kilili Camacho Sablan, Ranking 
Member, Subcommittee on Fisheries, Wildlife, Oceans and Insular Affairs

    Thank you, Mr. Chairman.
    The title of today's hearing poses a question that is simple enough 
to answer. We expect people from other countries who are visiting or 
operating a business in the United States to follow our laws, so of 
course those countries should expect the same from Americans traveling 
or working within their sovereign territory. With that, we should all 
be able to call it a day and move on to more pressing business.
    The question posed by the majority misses the point of the Lacey 
Act's foreign law provisions, which is to protect Americans from 
unwittingly buying seafood stolen from the waters of another country, 
or guitars made from illegal wood. It is also ignores the interest 
Americans have in protecting wildlife abroad, and the fact that the 
Lacey Act is one of the most effective tools we have for doing that. 
Finally, the Lacey Act does not require U.S. citizens to comply with 
foreign laws, but instead bans trade in illegally harvested wildlife 
and plants.
    As we speak, the illegal timber trade is funding Al Qaeda-linked 
terrorists. Blood ivory is helping Joseph Kony and the Lord's 
Resistance Army to continue to commit atrocities and destabilize 
central Africa. And sophisticated criminal networks with helicopters, 
night vision goggles, and automatic weapons are profiting from killing 
the last rhinos on the planet. We should not muddy the waters by 
distorting the intent and effect of one of our strongest conservation 
laws. Rather, we should hold a hearing to ask what we can do to help 
stop this global criminal assault on the wildlife and habitats that 
Americans cherish and that developing countries need to feed their 
people. Unfortunately, this committee's majority has ignored our 
request for such a hearing.
    That is a shame, because we could all benefit from hearing 
different perspectives on the kinds of serious crime the Lacey Act 
works to deter and punish. But the majority did not invite the 
Department of the Interior to discuss how additional resources for 
conservation, education, and natural resources law enforcement could 
turn the tide against criminal deforestation in South America. They did 
not invite the Department of State, to learn about diplomatic efforts 
to curb demand for elephant ivory, rhino horn, and shark fin in East 
Asia. And they did not invite the Department of Defense, to learn 
whether bringing a stop to poaching in Africa could make the United 
States a safer place. They did, however, choose to ignore all of the 
very serious and very real challenges we face.
    We will not ignore these challenges. We have a responsibility on 
this committee to address head on the threats to natural resources that 
Americans value, and we will not shirk that responsibility. The Lacey 
Act is a good and legitimate law--one of which we should be proud. That 
includes the foreign law provisions, which have been on the books for 
more than 80 years. Every constitutional challenge to the Lacey Act has 
failed, but if the majority wants to bring another one then they should 
pursue that in the courts, not in our committee. If majority members 
want to introduce legislation that would damage the Lacey Act they are 
welcome to do so, but I expect it would meet a similar fate as that of 
last year's anti-Lacey Act bills. In the meantime, we will do our best 
to highlight the depth and breadth of transnational wildlife and timber 
crime, and hope that they will join us soon so that we can take on 
these problems together. I welcome all of our witnesses, and I look 
forward to your testimony.
                                 ______
                                 
    Dr. Fleming. A notice to our panel. First of all, thank you 
for being here today. We are going to be called for votes in 
the next few minutes. What we are going to try to do is get 
through as much testimony as we can. And then we will recess 
for votes and come right back. So we want to be sure we are 
sitting on the edge of our seats to hear your testimony today.
    We will now hear from our panel of witnesses, which 
includes Ms. Kristina Alexander, Legislative Attorney, American 
Law Division, Congressional Research Service; Mr. Alexander von 
Bismarck, Executive Director, Environmental Investigation 
Agency; Mr. Marcus A. Asner, Arnold and Porter; Mr. Reed D. 
Rubinstein, Partner, Dinsmore and Shohl, representing the U.S. 
Chamber of Commerce; Mr. Paul J. Larkin, Jr., who is a Senior 
Legal Research Fellow at the Heritage Foundation; and Mr. Paul 
D. Kamenar, a former Senior Executive Counsel, Washington Legal 
Foundation.
    Your written testimony will appear in full in the hearing 
record, so I will ask that you keep your oral statements to 5 
minutes, as outlined in our invitation letter to you, under the 
Committee Rule 4(a).
    Our microphones are not automatic. And also, be sure the 
tip is close enough. You have to, I guess, share a little bit 
of microphone today. So be aggressive about shifting it so it 
can get there close to you and we can hear you.
    We will move forward, then. Ms. Alexander, you are now 
recognized for 5 minutes.
    Ms. Alexander. Good afternoon, Mr.----
    Dr. Fleming. Oh, let me interrupt you just for a second. 
One thing I left out, our lighting system. You are on the green 
light for 4 minutes, and then yellow for a minute. And when it 
turns red, if you haven't completed, be sure and go ahead and 
wrap up. Your full testimony in writing will be submitted for 
the record, so we will have it all.
    Thank you. I now open it up to you, Ms. Alexander.

STATEMENT OF KRISTINA ALEXANDER, LEGISLATIVE ATTORNEY, AMERICAN 
   LAW DIVISION, CONGRESSIONAL RESEARCH SERVICE, LIBRARY OF 
                            CONGRESS

    Ms. Alexander. Good afternoon, Mr. Chairman, members of the 
Subcommittee. My name is Kristina Alexander. I am a legislative 
attorney with the Congressional Research Service. I am here to 
introduce the Lacey Act and explain its legislative history 
regarding the ban on trade of plants and animals taken in 
violation of foreign law.
    The Lacey Act has a 113-year history that I will now review 
in 5 minutes.
    It was enacted in 1900 and has been amended many times 
since. Speaking generally, it is against Federal law to buy or 
sell plants or animals that were taken or traded in violation 
of State, Federal, tribal, or foreign law. When enacted, the 
Lacey Act was designed to prevent killing wildlife in violation 
of one State's laws and escaping prosecution by selling game in 
another State. In 1900, it applied to game that was killed in 
violation of the laws of a State, territory, or district. Thus, 
the Lacey Act has always been a two-part law: a violation of 
the Federal law is predicated on the violation of another law.
    In 1900, Congressman John Lacey acknowledged that his 
legislation would require those who sold game to understand the 
laws of the jurisdiction from which the game originated. At the 
start, the Lacey Act regulated just wild animals and birds. 
Fish were separate. A companion law, the Black Bass Act of 
1926, addressed the illegal trade of fish. It shared the same 
structure as the Lacey Act: a violation of Federal law could be 
found if underlying law were violated. At the time, the 
predicate acts included violations of State, territorial, and 
district law.
    In 1930, Congress enacted the Tariff Act, which prohibited 
importing wildlife if taken in violation of the laws of a 
foreign country, unless a certificate were issued. Congress's 
discussion of the Tariff Act gives perhaps the fullest 
congressional treatment of banning wildlife imports taken or 
exported contrary to the laws of a foreign nation: ``By law and 
treaty, the United States has recognized the desirability of 
the protection and conservation of wildlife. Certain practices 
of a commercial nature involving violations of laws of other 
countries, though not of laws of the United States, are 
entirely contrary to the intent and purpose of this policy of 
conservation.''
    There was some initial dissent to this law, however. In 
September 1929, the Senate opposed legislation that required 
compliance with foreign law. Senator Smoot of Utah expressed 
concern not regarding any imposition on U.S. citizens, but 
about interfering with the sovereignty of other countries. An 
amendment removed the wildlife trade language, but 6 months 
later the wildlife ban was included in the Act.
    In 1935 the Lacey Act was amended to make violations of 
foreign law a predicate act, as well. The legislative record 
surrounding the 1935 amendment is not rich with explanation. In 
fact, the total remarks are as follows: ``It is proposed also 
to extend the operation of the Lacey Act to foreign commerce 
and game and other wildlife.''
    In 1969, a comprehensive wildlife law was enacted which 
amended the Lacey Act to include more types of animals, and 
amended the Black Bass Act to make foreign law violations a 
predicate act for fish. The law also prohibited importing 
species in violation of foreign law that were at risk of 
becoming extinct.
    The legislative history for adding foreign laws to fish 
trade is more substantial than in 1935, perhaps because the 
1969 change was part of a larger bill. A House report describes 
the purpose of the Black Bass amendment as assisting in 
reducing commercial traffic in fish illegally taken in a 
foreign country. The Senate Committee describes the 
international purpose as both reducing demand for poached 
wildlife, as well as promoting reciprocity among other 
countries that might prohibit the sale of wildlife taken 
illegally in the United States.
    Testimony before Congress in the 1960s addressed the 
foreign law provision of the Lacey Act. Witnesses indicated 
that it would be difficult to know of and comply with laws of 
foreign countries when importing species. However, there is no 
discussion by a Member of Congress in the debate on the 1969 
amendments on any difficulties in making it a violation of U.S. 
law to violate a foreign law.
    A trade protocol similar to that required by the Lacey Act 
is in place for the Convention on International Trade of 
Endangered Species of Wild Fauna and Flora, known as CITES, 
which entered force in 1975. While CITES does not explicitly 
require compliance with foreign law, it does require that for 
certain listed species, U.S. importers must have a valid export 
certificate. That export certificate would demonstrate 
compliance with foreign law. CITES, in contrast to the Lacey 
Act, provides a list of species for which an export permit is 
required.
    The Black Bass Act and the Lacey Act were combined in 1981. 
At that time some plants were added, and in 2008 the plant 
provisions were amended. In terms of the plant provisions, 
therefore, the predicate violation of foreign law has always 
existed.
    Mr. Chairman, that concludes my prepared statement. I am 
happy to answer any questions you or others may have.
    [The prepared statement of Ms. Alexander follows:]

  Statement of Kristina Alexander, Legislative Attorney, American Law 
     Division, Congressional Research Service, Library of Congress

    Mr. Chairman and Members of the Subcommittee:
    My name is Kristina Alexander. I am a Legislative Attorney with the 
Congressional Research Service. I am here to introduce the Lacey Act 
and explain its legislative history regarding the restriction on trade 
in plants and animals taken in violation of foreign laws.
    The Lacey Act was enacted in 1900 addressing imports of injurious 
species and wildlife trafficking between states. My testimony is 
limited to the wildlife trafficking provisions of the Lacey Act, which, 
generally speaking, make it a violation of federal law to buy or sell 
plants or animals that were taken or traded in violation of state, 
federal, tribal, or foreign law. More specifically, with regard to 
foreign law, the Lacey Act makes it unlawful to import, export, 
transport, sell, receive, acquire, or purchase in interstate or foreign 
commerce any fish, wildlife, or plant taken, possessed, transported or 
sold in violation of any foreign law.\1\ In the case of plants, the 
underlying foreign law must protect or regulate plants.
---------------------------------------------------------------------------
    \1\ 16 U.S.C. Sec. 3372(a)(2). Other prohibited acts are described 
in 16 U.S.C. Sec. Sec. 3372(a)(1)-(4). For a fuller analysis of the 
Lacey Act, see CRS Report R42067, The Lacey Act: Protecting the 
Environment by Restricting Trade, by Kristina Alexander.
---------------------------------------------------------------------------
    The Lacey Act of 1900 was intended to prevent hunters from killing 
wildlife in violation of one state's laws and escaping prosecution by 
selling the game in another state. It was unlawful to transport the 
dead bodies of wild animals or birds from one state to another if the 
animals or birds were killed in violation of the laws of the ``State, 
Territory, or District in which the same were killed.''\2\ Thus, a 
Lacey Act violation has always been predicated on a violation of 
another law. In 1900 those predicate acts were limited to the laws of a 
state, territory, or district. The sponsor of the act, Congressman John 
F. Lacey, acknowledged that the law would require those who sold game 
to understand the laws of the jurisdiction from which the game 
originated in order to avoid violating the Lacey Act.\3\
---------------------------------------------------------------------------
    \2\ Lacey Act, ch. 553, 31 Stat. 187, 188 (1900).
    \3\ 56 Cong. Rec. 4,873-74 (1900). Mr. Lacey: ``It will simply do 
this: Suppose the closed season in Virginia commences on the 1st of 
December, and the closed season in Georgia is the 1st of October. Now, 
it will be lawful to ship animals and birds from Virginia into the 
District of Columbia and Baltimore longer than it would be from 
Georgia, because the closed season is different; and the man that 
receives and handles them must know that he is dealing in something 
that has not been killed in violation of the State law from which the 
game comes.''
---------------------------------------------------------------------------
    Initially, the Lacey Act regulated trade of ``wild animals and 
birds,'' while the Black Bass Act of 1926 addressed illegal trade in 
fish.\4\ The Black Bass Act shared the same structure as the Lacey Act, 
making it a federal offense to violate the laws of a State, Territory, 
or the District of Columbia with respect to fish.
---------------------------------------------------------------------------
    \4\ Black Bass Act, ch. 346, 44 Stat. 576 (1926).
---------------------------------------------------------------------------
    In 1930, Congress passed the Tariff Act of 1930, which prohibited 
importing wildlife that was taken in violation of foreign law.\5\ The 
Tariff Act of 1930 specifies that unless a certificate is issued, a 
``mammal or bird, or part or product thereof'' may not be imported into 
the United States if the laws of the country of origin ``restrict the 
taking, killing, possession, or exportation to the United States.''\6\ 
During debate on the Tariff Act in September 1929, the Senate opposed 
legislation to require compliance with a foreign law. Senator Smoot of 
Utah questioned whether the provision amounted to undue interference 
with the enforcement rights of other countries:
---------------------------------------------------------------------------
    \5\ Tariff Act of 1930, ch. 497, 46 Stat. 590, 741 (codified as 
amended at 19 U.S.C. Sec. 1527).
    \6\ 46 Stat. 741; 19 U.S.C. Sec. 1527.

        The House bill contained a new provision prohibiting the 
        importation of wild mammals or birds unless accompanied by the 
        certification of an American counsel that such articles have 
        not been acquired or exported in violation of the laws of the 
        country from which they come. . . . The provision partakes of 
        the nature of an attempt to enforce the laws of foreign 
        countries in respect to matters of their internal policy. While 
        it may not be proper to encourage violation of foreign laws, it 
        would seem to be beyond the proper purpose of a tariff bill to 
        adopt the amendment proposed by the House bill.\7\
---------------------------------------------------------------------------
    \7\ 71 Cong. Rec. 3,628 (Sept. 14, 1929).

    A 1929 House Report provides additional insight regarding the ban, 
centering not around trade obligations, but around the stated purpose 
---------------------------------------------------------------------------
of wildlife conservation:

        By law and treaty the United States has recognized the 
        desirability of the protection and conservation of wild life. 
        Certain practices of a commercial nature involving violations 
        of laws of other countries, though not of laws of the United 
        States, are entirely contrary to the intent and purpose of this 
        policy of conservation. Many foreign countries have passed and 
        are passing laws for the protection of wild birds and mammals 
        either directly or through prohibition of exportation of such 
        articles. In view of the policy of our Government in these 
        matters, it is believed that we should not countenance 
        disregard of the laws of these countries by permitting the 
        importation of birds or mammals taken or exported in violation 
        of such laws . . ..\8\
---------------------------------------------------------------------------
    \8\ H. Rep. 71-7 at 181 (May 9, 1929).

    While a Senate amendment removing the foreign law provision from 
the House bill was approved, six months later, a foreign law provision 
substantially similar to that in the House bill was included in the 
bill that became the Tariff Act of 1930.\9\
---------------------------------------------------------------------------
    \9\ 72 Cong. Rec. 5521 (March 18, 1930).
---------------------------------------------------------------------------
    In 1935, the Lacey Act was amended to add violations of foreign 
laws as predicate acts. At that time, it became a federal crime to 
capture, kill, take, ship, transport, carry, purchase, sell, or possess 
wild animals or birds ``contrary to the law of any State, Territory, or 
the District of Columbia, or foreign country or State, Province, or 
other subdivision thereof'' in which the game was captured, killed, 
taken, delivered, or knowingly received for shipment, transportation, 
or carriage, or from which it was shipped, transported, or carried.\10\ 
The legislative record surrounding the 1935 amendment provides little 
explanation regarding the foreign laws amendment. The only germane 
published remarks were in a House Report: ``It is proposed also to 
extend the operation of the Lacey Act to foreign commerce in game and 
other wildlife.''\11\
---------------------------------------------------------------------------
    \10\ Act of June 15, 1935, P.L. 74-148, Sec. 201, 49 Stat. 378, 
380.
    \11\ H. Rep. No. 74-886 (May 13, 1935).
---------------------------------------------------------------------------
    Subsequent amendments to the Lacey Act expanded the law's reach. In 
1948, federal law was added to the list of predicate acts.\12\ 
Amendments of 1969 extended the act's coverage to wild mammals, wild 
birds, amphibians, reptiles, mollusks, or crustaceans ``or the dead 
body or parts thereof.''\13\
---------------------------------------------------------------------------
    \12\ Act of June 25, 1948, P.L. 80-772, Sec. 42, 62 Stat. 683, 687.
    \13\ Act of Dec. 5, 1969, P.L. 91-135, Sec. 7, 83 Stat. 275, 281.
---------------------------------------------------------------------------
    Also in 1969, the Black Bass Act was amended to include foreign law 
violations among its predicate acts.\14\ The legislative history for 
this amendment is more substantial than for the 1935 change to the 
Lacey Act, possibly because the 1969 change was part of a larger bill 
to ban importing species at risk of becoming endangered. A House Report 
by the Committee of Merchant Marine and Fisheries describes the Black 
Bass Act amendment as enabling the United States to ``assist in 
reducing commercial traffic in black bass or other fish illegally taken 
in a foreign country.''\15\ The Senate Committee on Commerce described 
the international purpose:
---------------------------------------------------------------------------
    \14\ Act of Dec. 5, 1969, P.L. 91-135, Sec. 7, 83 Stat. 275, 281.
    \15\ H. Rep. 90-1102, at 10 (Feb. 21, 1966).

        By prohibiting the sale in the United States of wildlife 
        protected by a foreign government, the demand for poached 
        wildlife from that country will be sharply reduced. In 
        addition, however, such a law is also designed to promote 
        reciprocity. If we assist a foreign country in enforcing its 
        conservation laws by closing our market to wildlife taken 
        illegally in that country, they may in turn help to enforce 
        conservation laws of the United States by prohibiting the sale 
        within their borders of wildlife taken illegally within the 
        United States.\16\
---------------------------------------------------------------------------
    \16\ S. Rep. 91-526, at 12 (Nov. 6, 1969).

    Congressional hearings for the 1969 amendments addressed the 
foreign law issue regarding endangered species import bans, as well as 
the extension of the Lacey Act to other species. Witnesses indicated 
that it was difficult to know of or comply with laws of foreign 
countries when importing species. For example, the Director of the 
---------------------------------------------------------------------------
National Zoological Park stated:

        Often we don't know which countries animals came from or what 
        borders they have crossed. Let us say that before buying an 
        animal I want to be sure that it was captured and exported 
        legally from its country of origin. There is no way I can do 
        this.

        First, it would require a large staff of lawyers and 
        translators to assemble and analyze the enormous mass of 
        national, State, provincial and local and tribal wildlife 
        protection laws for more than a hundred nations.

        Next, one would have to collect the regulations, then somehow 
        discover what procedures are followed . . .''\17\
---------------------------------------------------------------------------
    \17\ House Committee on Merchant Marine and Fisheries, Subcommittee 
on Fisheries and Wildlife Conservation, Fish and Wildlife Legislation, 
Part 1, hearing on H.R. 6138, H.R. 8693, H.R. 11618, H.R. 3327, and 
H.R. 10923, 90th Cong., 1st sess., Oct. 4, 1967, Testimony of Dr. 
Theodore H. Reed, Director, National Zoological Park.

    Almost a year later, the Assistant Director of the Zoo testified 
that ``experience has shown that enforcement of this provision of the 
Lacey Act is next to impossible.''\18\ Similarly, a report by the 
Senate Commerce Committee includes a letter from the Deputy Assistant 
Secretary of the Interior stating that the proposed endangered species 
provision, which would require the Department of the Interior to 
assemble a list of at risk species, would ``make enforcement easier, 
because it is now very difficult to tell whether a particular mammal or 
bird or part thereof was taken illegally in a foreign country.''\19\
---------------------------------------------------------------------------
    \18\ Senate Committee on Commerce, Subcommittee on Merchant Marine 
and Fisheries, Endangered Species, hearing on S. 2984 and H.R. 11618, 
90th Cong., 2nd Sess., July 24, 1968, Testimony of Mr. John Perry, 
Assistant Director, National Zoological Park.
    \19\ S. Rep. 90-1668, at 15 (Oct. 10, 1968). Letter of Clarence F. 
Pautzke, Deputy Assistant Secretary of the Interior.
---------------------------------------------------------------------------
    However, there is no discussion in the legislative history of the 
1969 amendments by a Member of Congress on any compliance difficulties 
in making it a violation of U.S. law to violate a foreign law.
    A trade protocol similar to the Lacey Act requirements went into 
effect in 1975, when the Convention on International Trade of 
Endangered Species of Wild Fauna and Flora, known as CITES, entered 
into force.\20\ While CITES, through its enabling act, the Endangered 
Species Act, does not explicitly require compliance with foreign law, 
it does require U.S. importers to have a valid export certificate for 
certain listed species to demonstrate compliance with foreign law. 
CITES, in contrast to the Lacey Act, identifies the species for which 
an export permit is required.
---------------------------------------------------------------------------
    \20\ 16 U.S.C. Sec. 1538(c). The United States ratified the treaty 
in 1974.
---------------------------------------------------------------------------
    In 1981, the Lacey Act and the Black Bass Act were combined, 
keeping the name the Lacey Act. Also in 1981, the Lacey Act was amended 
to add tribal laws as predicate acts,\21\ and to cover some plants.\22\ 
In 2008, the plant provisions were expanded to the current 
language.\23\ Accordingly, in terms of plant provisions of the Lacey 
Act, foreign law violations have always been included as predicate 
acts.
---------------------------------------------------------------------------
    \21\ Lacey Act Amendments of 1981, P.L. 97-79, Sec. 3, 95 Stat. 
1073, 1074.
    \22\ Lacey Act Amendments of 1981, P.L. 97-79, Sec. 3, 95 Stat. 
1073.
    \23\ Food, Conservation, and Energy Act of 2008, P.L. 110-246, 
Sec. 8204(b), 122 Stat. 1651, 2053-55. See, 16 U.S.C. Sec. 3371(f) 
(definition of plant); 16 U.S.C. Sec. 3372 (prohibited activities 
related to plants); 16 U.S.C. Sec. 3372(f) (plant declarations).
---------------------------------------------------------------------------
    Mister Chairman, that concludes my prepared statement. I would be 
happy to answer any questions that you or other Members of the 
Subcommittee might have, and I look forward to working with all Members 
and staff of the Subcommittee on this issue in the future.
                                 ______
                                 
    Dr. Fleming. Thank you.
    Next, Mr. von Bismarck for 5 minutes.

   STATEMENT OF ALEXANDER VON BISMARCK, EXECUTIVE DIRECTOR, 
               ENVIRONMENTAL INVESTIGATION AGENCY

    Mr. von Bismarck. Thank you, Mr. Chairman, Ranking Member, 
and members of the Subcommittee, for inviting me to appear 
today. As Executive Director and an investigator for the 
Environmental Investigation Agency, I have conducted field 
investigations on every continent into the criminal networks 
making their living off of stealing the world's natural 
resources. In this work I am grateful for the training and 
experiences I received as a U.S. Marine.
    EIA has worked for nearly 30 years to expose environmental 
crimes and advocate for effective solutions. For example, EIA's 
investigations led to the international ivory ban in the late 
1980s.
    I would like to provide an update from the field, if you 
will, to help illustrate why the respect for foreign laws 
within Lacey is so critical. A 1-minute video will show the 
most recent investigations we are conducting. The first 
undercover clip illustrates the tiger parts trade, where the 
role of organized criminal networks is becoming clearer. 
Militant groups affiliated with al-Qaeda, such as the Harakat 
ul-Jihad-Islami-Bangladesh and Jamaat-ul Mujahedin Bangladesh, 
designated as foreign terrorist organizations by the State 
Department, are suspected of poaching tigers in India's 
Kaziranga National Park to support terrorist activities.
    The second clip shows undercover meetings with ivory 
smugglers who said that 90 percent of the trade is illegal, 
30,000 elephants are killed each year by organized crime 
syndicates, threatening not just animals, but people. The 
Lord's Resistance Army is slaughtering elephants in the 
Democratic Republic of Congo's Garamba National Park for ivory 
to fund its atrocities, which include rape, large-scale 
massacres, sexual slavery, and abduction. Similar, Somalia's 
militant group, al-Shabaab, is poaching elephants in Kenya, 
while the Sudanese Janjaweed militias are reportedly 
responsible for the recent mass elephant slaughters in Chad and 
Cameroon.
    The final clip was from Madagascar, from EIA's 
investigation which contributed to the Gibson case. A Chinese 
trader in a Mercedes was explaining to me how he was friends 
with the new President of Madagascar, and helped finance his 
coup with profits from the rosewood and ebony trade. I am aware 
that the Gibson case has been politicized. Luckily, the facts 
can ultimately come forward. Gibson purposefully sought out 
Malagasy wood when others wouldn't, when they knew that cutting 
had been illegal since 2006. This was unfair to Madagascar, and 
unfair to other American companies working hard to play by the 
rules.
    If anybody spent a single day in the logging town, you 
would be convinced of this fact. I posed as a new buyer, and 3 
days later I was taken by the Gibson suppliers into the 
national park to show where they illegally cut the ebony. And 
Gibson had much better tools to find that out. And, in fact, 
they did find that out. They did a fact-finding mission. They 
wrote about it in emails. And they decided that, despite that, 
to keep buying the wood.
    Luckily, the efforts by this company to try to change a law 
here in Washington while it was being investigated under that 
law ultimately didn't work. We have seen this kind of thing 
happen in Indonesia, but I am glad it didn't work in the United 
States. Because of this Lacey case, Madagascar national parks 
made it through a turbulent coup bruised, but still intact. 
Because of this Lacey case, manufacturers in China stopped 
buying Malagasy wood. Because of this Lacey case, Madagascar's 
forests still have a chance. And because of this Lacey case, 
the U.S. has a chance to cement new rules of the road in 
international commerce, particularly in China.
    If we want to imagine the consequences of removing concern 
for foreign laws from the Lacey Act, we can look to China. The 
Chinese Government has answered the question posed by this 
hearing clearly. They say, ``No, we generally do not need to 
follow the rules of other countries.'' As a result, many of 
their companies steal natural resources around the globe. I 
cannot imagine that it is the intent of this Committee or this 
hearing to follow China down a path of rewarding commerce in 
stolen goods.
    The irony is we are at the cusp of encouraging new rules of 
the road in other countries, as a result of American 
leadership. China spoke to the U.S. Trade Delegation on Monday 
about instituting measures to stop the import of illegal wood 
into its borders. A retreat on this principle of respecting 
foreign laws will destroy this progress and condemn U.S. 
companies to having to compete on the basis of who can buy more 
illegal wood.
    Timber smuggling, like the wildlife trade, is about 
national security. For countries around the world, such as in 
Madagascar's case, and for U.S. direct interest, USAID's Harry 
Bader, who received the State Department's USAID award for 
heroism, says the Lacey Act is a critical counter-terrorism 
tool, because of its coverage of foreign laws. His counter-
insurgency cell in Eastern Afghanistan found that the 
international sale of cedars was funding attacks on U.S. 
troops. This trade has fallen entirely now into the hands of 
insurgents like the Haqqani Network, and the forests are 
currently being liquidated to prepare for the summer fighting 
season. That is happening now to replace ``ordnance seized or 
destroyed'' by successful coalition operations. Illegal logging 
similarly supports insurgencies that threaten ongoing U.S.-
supported counter-insurgency efforts in the Southern 
Philippines and Colombia.
    Mr. Chairman, I urge you not to follow China, but to lead 
and support our present chance to set up norms of international 
trade that dry up the markets for goods that were stolen, that 
fund drug cartels, human rights abuses, and terrorism. Thank 
you, Mr. Chairman.
    [The prepared statement of Mr. von Bismarck follows:]

       Statement of Alexander von Bismarck, Executive Director, 
                   Environmental Investigation Agency

Introduction
    Mr. Chairman, Ranking Member, and members of the Subcommittee on 
Fisheries, Wildlife, Oceans and Insular Affairs, thank you for inviting 
me to appear before the Subcommittee today for the oversight hearing, 
``Why Should U.S. Citizens Have to Comply with Foreign Laws''.
    I have investigated and studied global crime in natural resources 
for over 15 years. As an investigator and the Executive Director of the 
Environmental Investigation Agency, I have conducted international 
field investigations on every continent into criminal networks dealing 
in illegal wood, endangered species and harmful chemicals. Before 
joining EIA I researched linkages between economics, ecology and human 
health with the Harvard School of Public Health and the New England 
Aquarium. I have a masters of science from the London School of 
Economics in Environment and Development and a BSc from Harvard 
University in Environmental Science and Public Policy. I am also proud 
to have served as a U.S. Marine.
    The Environmental Investigation Agency, Inc. (EIA), a non-profit 
501(c)(3) organization, has worked for nearly 30 years to investigate 
and expose environmental crimes, and advocate for creative and 
effective solutions. EIA's analyses of the trade in illegal timber, 
wildlife, and ozone-depleting substances have been globally recognized. 
As an example, our investigative work in the late 1980s provided 
evidence that led to the international ban on ivory trade.
    Since 1999, EIA has also used its undercover methodologies in 
partnership with local organizations to document the environmental and 
social impacts of illegal logging, as well as its context of corruption 
and criminal activity, in countries including China, Peru, Indonesia, 
Malaysia, Honduras and Russia. Our experience has shown us 
unequivocally that the illegal logging which causes the most serious 
environmental and social harm is inextricably linked to international 
trade, and that any solution will therefore require action and 
cooperation from both producer and consumer nations.
    We were honored to represent a broad coalition of industry, labor 
and environmental stakeholders when we testified before this 
subcommittee in 2007 about the need for amendments to the Lacey Act to 
include coverage of plants and timber taken or traded in violation of 
foreign law.\1\ Since the passage of the 2008 amendments, we have 
continued to work closely with a coalition of organizations, which 
represent a majority of affected stakeholders, to identify potential 
challenges with the implementation of the Act and to propose solutions 
that protect the environment and promote good governance while 
minimizing unnecessary regulatory burdens or regulatory uncertainty for 
legitimate businesses engaged in legal trade.
---------------------------------------------------------------------------
    \1\ We refer you to our 2007 testimony, which goes into greater 
detail than we do here about the devastating impacts of illegal logging 
around the globe and the need for a robust Lacey Act: http://eia-
global.org/PDF/testimony-EIA-forests-oct07.pdf.
---------------------------------------------------------------------------
    In my testimony I will highlight the facts on the ground that the 
Lacey Act is designed to combat, and document how effective 
implementation of this law is having a positive impact in the United 
States and around the globe. I will stress that more effective 
implementation is needed, rather than less. In a world where illegal 
logging and other poaching of natural resources funds terrorism, 
destabilizes rule of law and development around the world, and 
undercuts all law abiding U.S. companies, we should all be supporters 
of a U.S. law that protects U.S. citizens from unwittingly supporting 
these crimes.
Constitutionality of the Lacey Act
    First, I would like to state the obvious that the Lacey Act is a 
U.S. law. The U.S. legislature has on many occasions chosen to pass 
laws which, in plain English, state that the United States does not 
support commerce in stolen goods. The Lacey Act is one of these laws; 
so are laws that prohibit counterfeiting and smuggling, trafficking in 
stolen property, as well as many customs laws. The Lacey Act 
essentially prohibits the trade in illegally taken wildlife and plants. 
When an elephant is poached in Africa, the U.S. government has made it 
clear that it does not want to provide safe harbor for the buyer that 
financed that poaching. This has been the case since 1935 and there is 
no serious question that the laws prohibiting interstate or foreign 
trade in ivory or other poached goods are constitutional. Without 
prohibitions against trafficking in illegal wildlife and timber, the 
U.S. market would become a world leader in rewarding the organized 
crime that drives this trade.
Environmental Crimes: A Threat to National Security
    Wildlife and forest crime is the 4th largest transnational crime in 
the world, worth an estimated U.S. $17 billion annually.\2\ In March 
2013, the U.S. Worldwide Threat Assessment, produced by the U.S. 
intelligence community, also highlighted the threat of environmental 
crimes to our national security:
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    \2\ Haken, J. 2011. Transnational Crime In The Developing World. 
Global Financial Integrity, Washington, DC, USA.

        ``Illicit trade in wildlife, timber, and marine resources 
        constitutes a multi-billion dollar industry annually, endangers 
        the environment, and threatens to disrupt the rule of law in 
        important countries around the world. These criminal activities 
        are often part of larger illicit trade networks linking 
        disparate actors--from government and military personnel to 
        members of insurgent groups and transnational organized crime 
        organizations.''\3\
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    \3\ Clapper, James. U.S. Intelligence Community Worldwide Threat 
Assessment Statement for the Record. March 12, 2013. Accessed July 16, 
2013. http://www.intelligence.senate.gov/130312/clapper.pdf.

    Recognizing the importance of this issue and the challenge it 
poses, on July 1st, President Obama issued an Executive Order to 
address ``the significant threats of wildlife trafficking on the 
national interests of the United States.''\4\
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    \4\ White House Press Release. July 1, 2013. http://
www.whitehouse.gov/the-press-office/2013/07/01/executive-order-
combating-wildlife-trafficking.
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    In 2010, the United Nations Office of Drugs and Crime (UNODC) 
produced a major report on the Globalization of Crime: A Transnational 
Organized Crime Threat Assessment,\5\ which included environmental 
resources crime as one of the top eight offenders. In the report UNODC 
noted that:
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    \5\ United Nations Office of Drugs and Crime, ``Globalization of 
Crime: A Transnational Organized Crime Threat Assessment,'' 2010: 
http://www.unodc.org/documents/data-and-analysis/tocta/
TOCTA_Report_2010_low_res.pdf.

        ``Crime has diversified, gone global and reached macro-economic 
        proportions: illicit goods are sourced from one continent, 
        trafficked across another, and marketed in a third. Mafias are 
        today truly a transnational problem: a threat to security, 
        especially in poor and conflict-ridden countries. Crime is 
        fuelling corruption, infiltrating business and politics, and 
        hindering development. And it is undermining governance by 
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        empowering those who operate outside the law.''

    The top three recommendations from the UNODC report follow:

          Because most trafficking flows are driven more by the 
        market than by the groups involved in them, efforts that target 
        these groups--the traditional law enforcement response--are 
        unlikely to be successful on their own.
          Because transnational organized crime markets are 
        global in scale, global strategies are required to address 
        them, and anything else is likely to produce unwanted side 
        effects, often in the most vulnerable countries.
          Because globalized commerce has made it difficult to 
        distinguish the licit from the illicit, enhanced regulation and 
        accountability in licit commerce could undermine demand for 
        illicit goods and services.

    All three of these recommendations are supported by full and 
effective implementation of the Lacey Act, which has at its heart the 
intent to ferret out and dismantle international criminal networks 
profiting from poaching of wildlife and illegal harvest of plants. The 
United States was also a proponent of a resolution urging member states 
to formally view the illicit trade in plants and wildlife as a 
``serious crime,''\6\ that was finally adopted by the UN Commission on 
Crime Prevention and Criminal Justice (CCPCJ) in April 2013.\7\ Turning 
away from that mandate means green-lighting activities of transnational 
organized crime with our eyes wide open to the threats and 
consequences.
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    \6\ Biron, Carey L. ``Africa: UN Recognizes Wildlife Trafficking As 
`Serious Crime' '' All Africa, April 29, 2013. Accessed July 15, 2013. 
http://allafrica.com/stories/201304300508.html?viewall=1.
    \7\ UN Commission on Crime Prevention and Criminal Justice. 22nd 
Session, UNODC. April 2013. Accessed July 15, 2013. http://
www.unodc.org/unodc/en/commissions/CCPCJ/session/22.html.
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    I will now share with you some illustrative examples of what this 
transnational crime looks like in practice on the ground, and, where 
possible, I provide examples of Lacey Act enforcement actions aimed to 
deter further criminal activity.
Illegal Logging in Afghanistan: Funding Insurgents
    There are many examples around the world where forests offer an 
important mechanism to both finance and provide a base of operations 
for insurgents and other elements eager to avoid the rule of law. 
Current examples include Muslim separatists in Southern Philippines, 
cocaine cartels in Central America, and insurgents in Afghanistan.
    A recent article reporting on the work of the U.S. Natural 
Resources Counterinsurgency Cell (NRCC) in eastern Afghanistan, 
established under Task Force Mountain Warrior (TFMW), shows that the 
illegal timber trade was funding insurgent groups in Afghanistan.\8\ 
Profits from this trade likely funded the killing of U.S. troops on the 
ground in Afghanistan.
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    \8\ Harry R. Bader, Clint Hanna, Clint Douglas & John D. Fox 
(2013): Illegal Timber Exploitation and Counterinsurgency Operations in 
Kunar Province of Afghanistan: A Case Study Describing the Nexus Among 
Insurgents, Criminal Cartels, and Communities Within the Forest Sector, 
Journal of Sustainable Forestry, 32:4, 329-353: http://dx.doi.org/
10.1080/10549811.2013.767913.
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    Members of the U.S. counterinsurgency cell found that, ``The 
success of the timber smuggling networks created a sort of forced 
collaboration, transcending friction points and enabling tribal and 
politically antagonistic entities to cooperate. Thus, insurgent 
organizations freely coordinated with corrupt Afghan government 
officials, local warlords, village elders, and Pakistan government 
intelligence services in order to gain revenue from harvesting 
timber.'' This led to the conclusion that, ``whoever keeps the timber 
industry working, have the people's hearts . . . and their guns.''\9\
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    \9\ Ibid, pg. 340.
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    The report further explains that ``it is believed that the 
insurgent effort to dominate the timber trade in Kunar began as a 
deliberate operation to liquidate valuable forests in order to obtain 
revenue to procure ordnance, men, and other supplies in anticipation of 
the 2011 and 2012 fighting seasons . . . a need by insurgent elements 
to replenish ordnance seized or destroyed by successful coalition 
operations.''\10\
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    \10\ Ibid, pg. 343.
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    Much of this timber was smuggled through Pakistan, where it 
received fraudulent paperwork intended to make it appear legal and was 
traded onward to global markets. International buyers not practicing 
due care will have purchased this timber and thus, knowingly or not, 
financed the continuation of insurgent and terrorist activities.
    The Lacey Act is designed to help the United States fight these 
insurgent and terrorist operations, and protect U.S. interests, by 
helping ensure that companies in the business of selling goods in the 
United States take reasonable measures to know their suppliers. Anybody 
interested in ensuring that we, as American citizens and consumers, are 
not unwittingly funding insurgent groups that are killing U.S. 
servicemen and women overseas, should be working to strengthen the 
implementation of the Lacey Act, not weaken or dismantle it.
    By fully funding the implementation of the Lacey Act, including its 
declaration requirement and enforcement, leading by example, and 
encouraging other countries to pass similar measures, the U.S. 
government can dry up the international profit centers for wood trade 
that supports terrorism.
Illegal Logging in Peru: Destabilizing a U.S. trading partner
    EIA's April 2012 report on the illegal logging situation in Peru--
``The Laundering Machine'',\11\ analyzed official documents which 
demonstrate that at least 112 illegal shipments of cedar or mahogany 
wood--laundered with fabricated papers and signed off on by Peruvian 
government officials--arrived in the U.S. between 2008 and 2010. These 
shipments account for over 35% of all trade in these protected species 
between the U.S. and Peru. Our field investigators found that this 
pervasive laundering and corruption have been an open secret in Peru's 
wood trade for years, and that any exporter or importer still relying 
only on paper permits to claim legality should know better by now.
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    \11\ Environmental Investigation Agency. ``The Laundering Machine: 
How Fraud and Corruption in Peru's Concession System are Destroying the 
Future of its Forests.''
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    Illegal timber in the Peruvian Amazon is cut by crews of loggers, 
often under abysmal and abusive conditions, and stolen from protected 
areas including national parks, indigenous territories, and other 
government lands. Migrant workers find themselves trapped in camps 
located deep in the jungle, and indigenous communities are left with 
massive debts after intermediaries swindle them out of their valuable 
trees. These practices are financed by powerful timber barons, some 
connected to organized crime, who turn a blind eye to the human rights 
abuses and crimes committed. This timber is then laundered with 
documents based on false information.
    In 2006, the World Bank estimated that the illegal logging sector 
in Peru generated between $44.5 and $72 million dollars annually,\12\ 
while recorded legal profits from timber sales in the same year reached 
only 31.7 million.\13\ By 2011, the government and industry of Loreto, 
Peru's largest region, estimated that illegal logging was causing the 
country annual losses greater than $250 million dollars--1.5 times the 
value of total timber exports.\14\
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    \12\ Pautrat, L. and I. Lucich. Analisis Preliminar Sobre 
Gobernabilidad y Cumplimiento de la Legislacion del Sector Forestal en 
el Peru. 2006.
    \13\ Fordaq. Peru: Timber exports fall 11% in first quarter. June 
6, 2011. Accessed July 14, 2013. http://www.fordaq.com/fordaq/news/
logs_softwood_plywood_26553.html.
    \14\ OSINFOR Comunicado: ``Gobierno Regional de Loreto, 
Concesionarios y OSINFOR unidos para promover el desarollo forestal 
sostenible con inclusion social.'' October 2011.
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Cocobolo, Inc.: The U.S. Department of Interior v. Three Pallets of 
        Tropical Hardwood
    In June 2009, agents of the U.S. Fish & Wildlife Service seized 
three pallets of tropical hardwood as they entered the Port of Tampa, 
Florida from Iquitos, Peru. Originating deep in the Amazon, the pallets 
contained numerous species of decorative woods, including tigrillo 
(Swartzia arborescens), palisangre (Brosimum rubescens), and tigre 
caspi (Zygia cataractae). Agents confiscated the wood on grounds that 
the shipment violated the Lacey Act's declaration requirements.\15\ The 
seizure was supported by substantial evidence that the exporter was 
using stolen and forged documents. The FWS Agents were acting on 
information from a Peruvian business owner, who learned that his 
business had been used as a front to fraudulently ship the wood in 
question.
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    \15\ 16 U.S.C. Sec. 3372(f).
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    The U.S. importer filed a petition for remission of the wood, but 
the Solicitor's office found that Mr. Crouch, owner of Cocobolo, Inc., 
failed to take reasonable steps to comply with the regulations and 
ensure that the shipment was authorized by an export permit that 
properly documented the required information and was declared 
appropriately under the Lacey Act upon arrival into the United States. 
Evidence that the tropical hardwood was stolen to begin with, using 
forged documents led the Solicitor's Office to conclude that the 
exporter did not have legal title to the shipment.\16\
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    \16\ U.S. Department of the Interior v. Three Pallets of Tropical 
Hardwood (Crouch), INV No. 2009403072 (Office of the DOI Solicitor June 
22, 2010).), (Decision in Response to Petition for Remission).
---------------------------------------------------------------------------
    This case demonstrates how strict liability forfeiture is 
implemented by government agencies and that the Lacey Act does provide 
both legal and administrative remedies to ensure a company gets to 
`have its day in court'.
Illegal Logging in Russia: Threatening the Last Siberian Tigers and 
        American Business
    In the Russian Far East (RFE) region lie the hardwood forests of 
the Sikhote-Alin mountain range, home to numerous threatened species, 
including the world's largest cat, the endangered Siberian (Amur) tiger 
(Panthera tigris ssp. altaica). The forests of the RFE are being cut at 
an alarming rate; last year, nearly 20 million cubic meters of timber 
flowed across the border into neighboring China.\17\ According to the 
local WWF office in Vladivostok, in 2010, an equivalent harvested 
volume of approximately 900,000 cubic meters of oak was exported, most 
of it to China. Data from Russian provincial forest agencies authorized 
only 452,213 cubic meters of oak to be cut in 2010, indicating that at 
least 50% of the oak exported into China from Russia was illegally 
harvested.\18\
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    \17\ Russian Customs data as reporting in United Nations COMTRADE.
    \18\ Smirnov, D.Y. (ed.) Kabanets, A.G., Milakovsky, B.J., 
Lepeshkin, E.A., Sychikov, D.V. 2013. Illegal logging in the Russian 
Far East: global demand and taiga destruction. WWF, Moscow.
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    Oak, ash, linden, elm and other precious hardwoods are manufactured 
in China into flooring and furniture, much of which is then re-exported 
onwards to the U.S., EU, and Japan. All of these products have numerous 
substitutes from around the world; the U.S. and Europe both export 
significant quantities of temperate hardwoods to China. However, the 
high quality and low cost of illegally harvested old-growth Russian 
hardwoods has historically served to undercut U.S. and European 
products.
    Oak, ash, and other hardwood species from across the northern 
hemisphere differ little in their utility as raw materials for 
furniture and flooring. The key factor that has changed since 2008 is 
that, with passage of the Lacey Act amendments, suppliers in China now 
have a motivation to use timber from low-risk countries to avoid 
complications with their U.S. buyers. The Lacey declaration 
requirement, the PPQ 505 form, is the key element for tracking and 
promoting shifts such as these. On the PPQ 505 form, U.S. importers 
must list the species name and country of harvest of the wood in their 
imports. This is one of the few ways for U.S. importers to distinguish 
whether the oak in their Chinese-manufactured flooring comes from a 
high-risk country or a low-risk one, and is thus the key factor 
motivating a shift in raw-materials sourcing.
Illegal Logging in Madagascar: Undermining a Fragile State
    Over the past ten years, the impoverished island nation of 
Madagascar has experienced a crisis of rampant illegal logging, which 
has decimated the world-renowned biodiversity of its national parks, 
impoverished local communities, and fueled corruption and a coup in 
2009. Hundreds of thousands of tons of extremely high value rosewood 
and ebony have been illegally cut and smuggled out of the country to 
serve consumer markets, with the vast majority going to China for the 
high-end domestic furniture market.\19\
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    \19\ EIA and Global Witness, Investigation Into the Global Trade in 
Malagasy Precious Woods: Rosewood, Ebony and Pallisander, October 2010.
---------------------------------------------------------------------------
    In 2009, the U.S. government investigated Gibson Guitar Inc. for 
importing illegally harvested ebony from Madagascar. In 2012, Gibson 
acknowledged that it imported ebony from Madagascar despite knowing 
that harvest of ebony had been illegal for many years. Gibson agreed to 
pay over $600,000 in fines and forfeited ebony, and also committed to 
follow a detailed compliance process for future imports. This action 
has had a significant impact on sourcing practices within the music 
industry worldwide and validates the effort of all American companies 
that invest in sourcing legal wood.
    The spotlight the case placed on the illegal Malagasy rosewood and 
ebony trade also led to crackdowns in China on Chinese importers of 
these precious woods. As a result of increased international scrutiny 
of the illegal timber trade, evidenced by laws such as the Lacey Act 
amendments and the European Union Timber Regulation, China for the 
first time has publicly acknowledged the problem of illegal timber 
imports. These actions to curb demand led to a decrease in illegal 
logging in Madagascar. On Monday, a high level delegation from China 
met with U.S. counterparts to discuss concrete steps it could take to 
stop its own role in illegal logging, particularly in Madagascar. U.S. 
leverage to encourage China to address illegal logging in these 
discussions stems from the Lacey Act, since it allows us to challenge 
imports of wood products that are misrepresented or shown to be made 
from illegal timber.
    As in many Lacey cases, the enforcement action involving Gibson 
Guitar Inc. had positive impacts in fighting the illicit trade that 
went beyond the case itself; it had the effect of curbing the illegal 
logging of national parks in Madagascar, having the Chinese patrol more 
thoroughly the role their businesses play in the illegal destruction of 
Malagasy forests, and encouraged the global musical instruments 
industry to more thoroughly examine its sourcing practices. All of 
these are important elements for challenging international criminal 
networks, establishing sustainable business practices for the future of 
the trade, protecting forest resources, and rewarding American guitar 
companies that are playing by the rules.
Chinese Response to Lacey Act Plant Amendments
    In 2009, following the new Lacey Act amendments, the People's 
Democratic Republic of China also introduced the ``Guide on Sustainable 
Overseas Forest Management and Utilization by Chinese Enterprises'', 
emphasizing the responsibility of Chinese forestry companies operating 
overseas to abide by host-country laws and to practice sustainable 
forest management. In 2011, the government proposed a draft legality 
verification system. Over the past five years, in a significant shift, 
Chinese officials have taken a more active role in international 
forestry discussions, reflecting increased international pressure and 
focus on issues relating to timber legality.
    In addition, recent years have demonstrated dramatic changes in 
Chinese timber product sourcing practices. Chinese official import data 
illustrates these trends: while Russia still accounts for 37% of total 
log and lumber imports by China, the share made up by Canada, New 
Zealand, and the United States has more than tripled from 10% in 2007 
to 33% in 2010 (Please see attached graphic). At a recent conference, 
Chinese government officials noted that China is importing less wood 
from high-risk countries due to legality concerns on the part of U.S. 
and European buyers. This data indicates that laws like the amended 
Lacey Act are already starting to positively impact supply chains 
around the world.
The Current Wildlife Poaching Crisis
    The illegal wildlife trade is believed to be equivalent--in both 
revenue produced for criminals and level of threat to national 
security--to arms and narcotics trafficking. The links between wildlife 
poaching, the associated illegal trade, and transnational organized 
crime are increasingly complex and require more U.S. resources and 
attention than currently exist, certainly not less. Far greater 
investment is required to institutionalize intelligence-led, multi-
agency enforcement in key source, transit and destination countries in 
order to identify and apprehend key criminals in the trade chain and 
disrupt these criminal networks.
Elephants
    Elephants are being slaughtered in large numbers, an estimated 
30,000 per year, by organized crime syndicates for their ivory to feed 
Asian, and particularly Chinese, demand. Though China claims to have a 
controlled domestic legal ivory market, EIA investigations have shown 
that up to 90% of the ivory in China is illegal and supplied by poached 
elephants in Africa.\20\ Evidence indicates a growing involvement of 
organized crime networks, and these syndicates rely on corruption, 
collusion and protection from different government institutions and 
private sector operators to thrive.
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    \20\ Environmental Investigation Agency. ``Blood Ivory: Exposing 
the myth of a regulated market.'' 2010.
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    There is a growing body of evidence that the slaughter of majestic 
and iconic elephants is supporting crimes against humanity, showing 
that the illegal wildlife trade threatens not only animals but also 
people. A recent report, ``Kony's Ivory: How Elephant Poaching in Congo 
Helps Support the Lord's Resistance Army,'' provides field evidence 
confirming that the Lord's Resistance Army (LRA) is slaughtering 
elephants in the Democratic Republic of Congo's Garamba National Park 
for ivory to fund its atrocities.\21\ The LRA is known for vast human 
rights violations, including murder and large-scale massacres, rape and 
sexual slavery as well as abduction. Joseph Kony, the criminal leader 
of this rebel group, has ordered his followers to bring him elephant 
ivory to obtain food, arms and other supplies to fuel more rebel unrest 
and violence. Thus, the illicit ivory trade is serving to help sustain 
violence and terrorism that the United States has vowed to combat.
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    \21\ Kasper Agger and Jonathan Hutson. ``Kony's Ivory: How Elephant 
Poaching in Congo Helps Support the Lord's Resistance Army.'' June 
2013. A co-production of the Enough Project, The Resolve, Invisible 
Children, and the Satellite Sentinel Project (with DigitalGlobe).
---------------------------------------------------------------------------
    Sadly, the LRA is not the only armed group targeting elephants to 
fund criminal activity. Somalia's militant group al-Shabaab has been 
implicated in poaching elephants in Kenya while the Sudanese Janjaweed 
militias are reportedly responsible for the recent mass elephant 
slaughters in Chad and Cameroon.\22\
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    \22\ International Fund for Animal Welfare (IFAW). ``Criminal 
Nature: The Global Security Implications of the Illegal Wildlife 
Trade.'' June 2013.
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    As one of the world's largest consumers of illegal wildlife, the 
U.S. plays a significant role in the international ivory trade.\23\ The 
U.S. is now leading the international community's growing focus on the 
poaching crisis by recognizing that wildlife crime is serious organized 
crime--it's now time to act on this recognition by fully implementing 
its commitment to ending wildlife trafficking.
Rhinos
    Thus far in 2013, more than two rhinos per day have been poached 
for their horns to feed Asian demand. The Convention on International 
Trade in Endangered Species (CITES) Secretariat believes the rhino horn 
trade to be ``one of the most structured criminal activities currently 
faced by CITES.''\24\ If the current rate continues, more than 900 
rhinos will be killed in South Africa this year, easily surpassing last 
year's record high of 668 poached rhinos. The well-funded and 
sophisticated criminal poaching networks have thus far overwhelmed the 
capacity of local enforcement officials to adequately stop the 
slaughter in range states.
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    \24\ CITES Secretariat, Species Trade and Conservation--
Rhinoceroses: Report of the Secretariat, SC62 Doc. 47.2.
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    The Lacey Act has made it possible to charge and prosecute those 
involved in the killing and trafficking of globally threatened rhinos 
and their parts. As an example, in September 2012, members of an 
international smuggling ring pled guilty to federal charges for 
illegally trafficking rhino horn.\25\ In addition to charges of money 
laundering and tax fraud, Vinh Chuong ``Jimmy'' Kha and Felix Kha and 
the Win Lee Corporation pled guilty to conspiracy, smuggling and 
wildlife trafficking in violation of the Lacey Act. The case surfaced 
as part of the U.S. Fish and Wildlife Service's (USFWS) ``Operation 
Crash,'' an ongoing nationwide crackdown targeting those involved 
specifically in illegal killing of rhinos and unlawful trafficking of 
rhino horn. At sentencing, the defendants were ordered to pay a total 
of $800,000 in restitution to the Multinational Species Conservation 
Fund, managed by the USFWS, to support international rhino conservation 
efforts.
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    \25\ FWS News Release. ``Members of International Smuggling Ring 
Plead Guilty to Federal; and also Charges of Illegally Trafficking 
Endangered Rhinoceros Horns.'' September 14, 2012. Accessed July 17, 
2013 http://www.fws.gov/le/pdf/rhino-horns-news-release-09172012.pdf.
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    USFWS Director Dan Ashe commented on the sentencing in this case as 
follows: ``Criminals in this country who are cashing in on this illegal 
trade should know that the United States will hold them accountable for 
their crimes and do everything possible to protect wild populations of 
rhinos.''\26\
---------------------------------------------------------------------------
    \26\ 7th Space Interactive. ``USDOJ: Smuggling Ring Sentenced in 
Los Angeles for Criminal Trafficking of Endangered Rhinoceros Horn'' 
Found at: http://7thspace.com/headlines/437930/
usdoj_smuggling_ring_sentenced_in_los_angeles_for_criminal_trafficking_o
f_endangered_
rhinoceros_horn.html.
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Tigers
    The role of organized criminal networks in the international 
illegal trade in skins, bones and other body parts of tigers and other 
Asian big cats between India, Nepal and China became apparent in 1999 
and continues to be documented.\27\ Further, militant groups affiliated 
with al-Qaeda (such as the Harakat ul-Jihad-Islami-Bangladesh (HUJI-B) 
and Jamaat-ul Mujahedin Bangladesh (JMB), two entities designated as 
foreign terrorist organizations by the U.S. Department of State and 
European governments) and based in Bangladesh are suspected of 
sponsoring the poaching of tigers and other protected species at 
India's Kaziranga National Park to support terrorist activities.\28\ 
The poaching crisis has been exacerbated by a surge in demand for the 
use of skins for luxury home decor and for use as bribes and 
prestigious gifts in China, which has put not just tigers at risk, but 
leopards and snow leopards as well.
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    \27\ See, e.g., EIA (Feb 2013), Hidden in Plain Sight: China's 
Clandestine Tiger Trade; EIA (Oct. 2012), Briefing on Snow Leopards in 
Illegal Trade--Asia's Forgotten Cats; EIA (Nov. 2011), Key features of 
the Asian big cat skin and bone trade in China in 2005-2011.
    \28\ (ref supra to IFAW 2013 Criminal Nature report) at p.12.
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    With as few as 3,200 wild tigers remaining, it is critical that all 
countries introduce domestic measures to end all trade, in all tiger 
parts and products from all sources; captive-bred as well as wild. 
During this year alone, based on poaching incidents and seizures, 
approximately 24 tigers have been killed in India.\29\ Major seizures 
of parts and products of tigers and other Asian big cats confirm that 
the illegal trade is ongoing and that more resources and political will 
are required to end all big cat trade.\30\
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    \29\ Wildlife Protection Society of India (WPSI), Tiger Deaths in 
2013, http://www.wpsi-india.org/wpsi/index.php.
    \30\ See, e.g., Chetan Chauhan (Feb. 18, 2013), Rich haul of tiger 
body parts in Nepal shows increased threat to Indian tigers (Hindustan 
Times, New Delhi), http://www.hindustantimes.com/India-news/NewDelhi/
Rich-haul-of-tiger-body-parts-in-Nepal-shows-
increased-threat-to-Indian-tigers/Article1-1013268.aspx; Phoenix Fund 
(Feb 2013), Sad statistics from the Amur!, http://
www.rewildingfoundation.org/2013/02/26/sad-statistics-from-the-amur/.
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Facts of the McNab Case
    Opponents of the Lacey Act repeatedly cite the case of McNab v. 
United States of America and Blandford, Schoenwetter, and Huang v. 
United States of America as an example of over-regulation to validate 
the push for change to the law. However, they fail to share fundamental 
elements of the case that illustrate why the violations were so 
egregious. In this case, the persistent and willful failure to comply 
with foreign laws led to disastrous ecologic, human and economic 
consequences. We would like to make some clarifications for the record.
    The fishing of lobsters off the Caribbean coast of Honduras and 
Nicaragua is having increasingly devastating human as well as 
environmental consequences. It is largely done by indigenous Miskito 
men who free-dive to deeper and deeper waters to grab lobsters that 
have become increasingly scarce due to over-exploitation. The average 
life span of these men is now under 40 as so many die of decompression 
sickness (also known as ``the bends'') because they do not have proper 
equipment to dive at those depths. These are the lobsters that are then 
loaded onto boats such as the one McNab operated.
    During the period covered by the indictment, the Republic of 
Honduras had imposed conservation regulations to protect its lobster 
fishery from over-exploitation and health regulations to ensure safe 
processing of fishery products. McNab owned and operated a fleet of 
lobster fishing boats that harvested Caribbean spiny lobster in 
Honduran fishing waters. The McNab case involved a very large amount of 
lobster: 400,000 lbs with a value of $4.6 million.\31\
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    \31\ David Henson McNab vs. United States of America: http://
www.justice.gov/osg/briefs/2003/0responses/2003-0622.resp.html.
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    A number of Honduran laws and regulations were broken by McNab's 
fleet throughout its operations, including regulations intended to 
prevent harvesting of juveniles, illegal transport, failure to report 
harvest to the appropriate Honduran fishing authorities, and failing to 
ensure that the lobsters were inspected and processed in Honduras. 
While one of the underlying laws that McNab's Lacey violation was 
eventually based upon involved the packaging material, the extent of 
McNab's illegal activity was much more extensive. Even the packaging 
violation is more meaningful than it might appear, as the incorrect 
packaging allowed the company to better hide the under-sized lobsters 
from authorities.
    The National Marine Fisheries Service agents (NOAA) repeatedly 
consulted with Honduran officials and determined through their 
investigation that Honduran law had been violated by McNab's company, 
and by those that bought the lobster in the United States. The Honduran 
law was changed subsequently due to corruption and bribery in Honduras, 
and the courts saw it for what it was. This is a case in which the 
Lacey Act did exactly what it was supposed to do: prevent destruction 
of a natural resource in violation of the conservation laws of a 
trading partner.
Conclusion
    U.S. industry and consumers do not want to fund human rights 
violations in Peru, Kony and the Lord's Resistance Army in the DRC, 
insurgents in Afghanistan, the junta in Burma, the extinction of the 
Amur Tiger in Russia, or the decimation of elephants and rhinos 
throughout the continent of Africa. This is a limited list of how 
profit from illicit trade in wildlife, fish and plants has become one 
of the leading sources of finance for criminal networks. Why is this? 
It is precisely because there is not enough enforcement and respect for 
the rule of law that governs the take and trade of natural resources. 
The Lacey Act is one of the laws working effectively to change this 
reality.
    Europe, Australia and perhaps soon Japan are following the United 
States' lead in this area in order to make sure that their domestic 
laws also deter the international trade in illegal plant species. Here 
the U.S. has led by its example of respect for the rule of law.
    By the title of this hearing, the subcommittee seems to propose an 
alternative view that the United States should allow its citizens and 
businesses to abdicate all responsibility for lawful conduct as soon as 
their activities move beyond U.S. borders. We don't have to imagine 
what the consequences of such an approach are: China has no measures 
similar to the U.S. Lacey Act and consequently is largely responsible 
for the giant sucking sound of natural resources illegally taken from 
around the globe. Chinese companies exhibit blatant disregard for the 
rule of law overseas, bribing officials and smuggling vast quantities 
of precious wildlife, timber and other natural resources to their 
factories. The only forces now frustrating these practices are the 
Lacey amendments and similar laws which close markets to such lawless 
and destructive practices.
    Times have changed in the more than 100 years since the Lacey Act 
first became law, and Congress has kept apace, through thoughtful 
amendments over that time, to meet the challenges that globalization 
and increasingly sophisticated international criminal networks pose to 
legal trade.
    Mr. Chairman, I cannot imagine it is your intention that the United 
States should cease to lead in the fight against transnational 
organized crime and the protection of our natural heritage.
    Removing coverage of foreign laws from the Lacey Act would fatally 
undermine this effective tool and reveals a disinterest in conducting 
responsible trade. In this age of globalized trade--the Lacey Act 
supports and, in fact, rewards those traders that want to play by the 
rules. Removing these protections for legitimate business operators 
would leave them once again vulnerable to be undercut by illegal 
competitors. American businesses operating overseas and trying to 
follow the rules would be without a future.
    As we are faced with a wildlife poaching crisis raging out of 
control, ever more sophisticated illegal timber networks, and over 80% 
of global fishery stocks at risk as they struggle with illegal, 
unreported and unregulated fishing, there is not a better proven tool 
than a well-funded and effectively enforced U.S. Lacey Act.
    Thank you for your time, and I would be happy to answer any 
questions.
                                 ______
                                 
    Dr. Fleming. Yes, thank you for your testimony.
    Well, votes have been called. I am going to go ahead and 
recess. We will probably be approximately an hour. So don't run 
far. And we will be back. We are waiting at the edge of our 
seats for the rest of the testimony and the questions today. 
Thank you.
    [Recess.]
    Dr. Fleming. The Committee is now brought back to order. I 
think we left off with Mr. Asner next. So, Mr. Asner, you are 
now recognized for 5 minutes.

      STATEMENT OF MARCUS A. ASNER, ARNOLD AND PORTER, LLP

    Mr. Asner. Thank you, Mr. Chairman. This hearing is focused 
on the Lacey Act, and it asks a simple question: Why should 
U.S. citizens have to comply with foreign laws? The answer is 
simple. The Lacey Act has no such requirement. Lacey does not, 
in fact, require U.S. citizens to comply with foreign law. In 
fact, the Act requires only that people in the U.S. comply with 
the U.S. law, the Lacey Act, which, in turn, prohibits trade in 
the United States of illegal fish, wildlife, plants, and plant 
products.
    American consumers have a right to buy legal goods, and 
people who traffic in illegal goods should be punished. If 
someone steals a truckload of cattle in Ontario and smuggles it 
into Michigan, no one in this room would quarrel that the 
person has committed a crime. In fact, the smuggler would have 
violated a whole slew of Federal laws, including laws that bar 
interstate transportation of stolen property, and laws that 
prohibit the theft of livestock. And if someone steals tons of 
lobster from South Africa, as the defendants did in the Bengis 
case that I handled as a prosecutor, and dumps the stolen 
lobster on unknowing American consumers, all for a huge profit, 
that person has committed a crime. She has violated the Lacey 
Act.
    In both cases, whether cattle or lobster is stolen, 
deciding whether the defendant has committed a U.S. crime 
necessarily will turn, at least in part, on foreign law. To 
find out whether the cattle was stolen, we have to look to the 
laws of Canada, and to find out whether the lobster was stolen, 
we have to look to the laws of South Africa. U.S. courts are 
well equipped to do this, and have been doing so for as long as 
anybody can remember.
    The invitation also asks about whether the foreign law 
provision of the Lacey Act is constitutional. Every single 
circuit court to consider the issue has upheld the Lacey Act as 
constitutional. Courts addressing the issue have described the 
contrary argument--and I am quoting--as ``patently frivolous, 
without merit, and neither original nor meritorious.'' As the 
third circuit said, ``The Act does not delegate legislative 
power to foreign governments, but simply limits the exclusion 
from the stream of foreign commerce to wildlife unlawfully 
taken abroad.''
    The Lacey Act is good for America and protects the rights 
of victims. Allowing importers to ignore the legality of the 
goods they sell to Americans will encourage trade in illegal 
goods, which, in turn, will put legitimate U.S. businesses at a 
disadvantage, threaten the sustainable supply of resources we 
need, undermine the rule of law in other countries, and 
threaten our national security.
    The Lacey Act also protects victims, including individuals 
in countries who had their resources stolen or illegally taken, 
as the court made clear in Bengis, when it ordered the 
defendants to pay compensation to South Africa for the lobster 
that they stole.
    Now, some of my colleagues argue in their written testimony 
that the Lacey Act is unfair and even unconstitutional. I 
disagree. One argument is that the Lacey Act makes it a crime 
to violate foreign law, and that it requires Americans to be 
familiar with tens of thousands of foreign law. That is not 
accurate. Lacey punishes trafficking in the United States in 
certain illegal goods, but only if the defendant knew, or 
should have known, that the goods were illegal.
    Another argument is that the Lacey Act holds someone 
criminally liable for the violation of even the most technical 
foreign law, rule, or local ordinance, without any evidence of 
intent. Again, that is not true. If you unwittingly and 
reasonably find yourself in possession of illegal goods, you 
are not guilty under the Lacey Act.
    Another argument is that no one reasonably can be expected 
to know the laws of other countries. In fact, the categories of 
laws triggering the Lacey Act are clear. They are laws 
governing wildlife, fish, and plants. The seafood industry has 
been living with Lacey for decades. And, despite the rhetoric, 
no one is charged with knowing tens of thousands of foreign 
laws. But if somebody imports rosewood from Madagascar as part 
of their business, we frankly expect that they would try to 
find out whether the wood is legal.
    Finally, some of my colleagues argue that the Lacey Act can 
lead to some unfair results, claiming that in McNab, innocent, 
hardworking, small businessmen trying to make a living were 
unjustly imprisoned for unknowingly violating Honduran law. I 
have been involved with the criminal justice system for many 
years now, both in the prosecution side, and now as a defense 
lawyer. And I have seen many sad and sympathetic cases. McNab 
is not one of those cases.
    It involved a large, sophisticated, and destructive 
international scheme that included more than 40 shipments of 
illegal lobster tails, with a retail value of over $17 million. 
Defendants in McNab illegally harvested quantities of under-
sized and egg-bearing lobster, purposely misreported their 
catch to Honduran authorities, packaged the illegal goods in 
ways that helped them avoid detection, and smuggled their 
illegal contraband into the United States, where it was sold to 
unwitting consumers for significant profit.
    Innocent, hardworking Americans just trying to make a 
living don't do things like that. Thank you, your Honor.
    [The prepared statement of Mr. Asner follows:]

          Statement of Marcus A. Asner, Arnold and Porter, LLP

Introduction
    Mr. Chairman, Ranking Member, and members of the Subcommittee on 
Fisheries, Wildlife, Oceans and Insular Affairs, thank you for inviting 
me to appear before the Subcommittee today to address the topic of 
``Why Should Americans Have to Comply with the Laws of Foreign 
Nations?''
    I am a partner in the New York office of Arnold & Porter LLP where 
I routinely advise companies on Lacey Act and other environmental and 
criminal matters. Although I am advising several clients on legal 
matters relating to the Lacey Act, I am appearing today in my personal 
capacity and not on behalf of Arnold & Porter or any client.
    For nine years (2000-2009), I served as an Assistant United States 
Attorney (AUSA) in the Southern District of New York where I was Chief 
of the Major Crimes unit from 2007 to 2009. When I was an AUSA, I led 
the investigation and prosecution of United States v. Bengis, one of 
the largest Lacey Act cases in history, involving the smuggling of 
massive quantities of illegally harvested rock lobster from South 
Africa. Since I joined Arnold & Porter in 2009, I have counseled 
clients on a wide variety of Lacey Act issues, including assisting 
clients in complying with the 2008 Amendments. I have written 
extensively on the Lacey Act, and I have been invited to speak at 
numerous domestic and international meetings concerning environmental 
crime. In the past year or so, for example, I have spoken on Lacey Act 
issues at the World Fisheries Conference, the Forest Legality Alliance, 
INTERPOL, and the Boston Seafood Show. In May, I testified before this 
Subcommittee regarding ``The 2008 Lacey Act Amendments.''
    Today, I will explain my thoughts on how the Lacey Act's 
requirement that individuals and companies ensure that the wildlife, 
fish, and plants in which they are trading are legal under both U.S. 
and foreign law is a constitutional and effective way of furthering the 
goals of the Lacey Act and protecting U.S. interests. I also will 
address some concerns that have been raised about the foreign laws 
provision of the Lacey Act.
Discussion
    The Lacey Act is designed to further U.S. interests by keeping 
illegal fish, wildlife, plants and plant products from flooding the 
U.S. market, and by protecting our supplies of sustainable natural 
resources. The Act helps disrupt criminal organizations and fight 
corruption in foreign countries, which in turn helps level the playing 
field for legitimate businesses and improves our national security. By 
making it illegal to ``import, export, transport, sell, receive, 
acquire, or purchase any fish or wildlife or plant taken, possessed, 
transported, or sold in violation of any law, treaty, or regulation'' 
of the United States or foreign countries, the Lacey Act furthers these 
goals and protects the victims of environmental crime, both in the U.S. 
and abroad.
    The United States is very much the leader in this area. Other 
countries, including Australia and Canada, are now using the Lacey Act 
as a model for their own laws. That other countries are adopting their 
own versions of the Lacey Act is good for America; if someone pillages 
our resources and then flees beyond the reach of American law 
enforcement, we certainly would insist that they be held responsible 
for their crimes.
    This oversight hearing asks: ``Why should Americans have to comply 
with the laws of foreign nations?'' To be clear, the Lacey Act does not 
in fact require U.S. citizens to comply with foreign law, nor does it 
require the U.S. to enforce other countries' laws. The Act requires 
only that people in the U.S. comply with a U.S. law (the Lacey Act), 
which in turn prohibits trade in the United States in illegal fish, 
wildlife, plants, and plant products. American consumers have a right 
to buy legal goods, and the Lacey Act provides a proper (and 
constitutional) means to help enforce that right.
    Frequently, determining whether particular goods are legal 
necessarily will turn on the law of a state or a foreign country. The 
Lacey Act's ``assimilation of [foreign] laws is designed to reduce 
demand in the United States for species poached in foreign countries 
and to encourage international cooperation and mutual reciprocal 
enforcement efforts.''\1\ U.S. courts routinely address issues of 
foreign law, and are well-equipped to do so.\2\ In cases where a 
foreign law is ambiguous or difficult to understand, the Lacey Act's 
state of mind (mens rea or scienter) requirement--that importers act 
``knowingly'' for a felony conviction or with ``due care'' for a 
misdemeanor--protects people who unwittingly find themselves dealing in 
illegal goods.\3\ In the context of forfeiture, the remission 
procedures provided by the agencies charged with enforcing the Lacey 
Act help protect innocent importers who exercise due care, by giving 
them an opportunity to argue for the return of seized goods. The case 
of Gibson Guitar is a prime example; while the wood from Madagascar was 
clearly illegal and had to be forfeited (as Gibson ultimately 
conceded), there was some ambiguity in the Indian law, so Gibson was 
permitted to submit an unopposed petition for remission \4\ and obtain 
the return of the Indian wood.\5\
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    \1\ Legal Timber Protection Act: Hearing before the House of 
Representatives Committee on Natural Resources, Subcommittee on 
Fisheries, Wildlife and Oceans on H.R. 1497, 110th Cong. 7 (2007) 
(statement of Eileen Sobeck, Deputy Assistant Att'y Gen., Env't & 
Natural Res. Div., U.S. Dep't of Justice).
    \2\ See, e.g., United States v. Bengis, 631 F.3d 33, 39-41 (2d Cir. 
2011) (looking to South African law to determine property rights); see 
also Fed. R. Civ. P. 44.1 and Fed. R. Crim. P. 26.1 (rules on how 
courts interpret foreign law).
    \3\ See United States v. Lee, 937 F.2d 1388, 1394-95 (9th Cir. 
1991) (citing Village of Hoffman Estates v. Flipside, Hoffman Estates, 
Inc., 455 U.S. 489, 499 (1982)).
    \4\ Criminal Enforcement Agreement Between U.S. Dep't of Justice 
and Gibson Guitar Corp. at 3 (July 27, 2012) [hereinafter Gibson CEA], 
available at http://www.fws.gov/home/feature/2012/
USvGibsonGuitarAgreement.pdf.
    \5\ See Gibson USA--Electric Guitars, http://www.gibson.com/press/
usa/(last visited July. 15, 2013) (advertising the sale of ``Government 
Series'' guitars made from wood reclaimed from FWS in the remissions 
process); Musician's Friend, Gibson Les Paul Government Series Electric 
Guitar, http://www.musiciansfriend.com/guitars/gibson-les-paul-
government-series-electric-guitar (last visited Jun. 20, 2013) 
(describing the commemorative Les Paul guitars and noting that 
``[i]nterspersed among the general production run of the Government 
Series, the confiscated and returned components will be `golden 
tickets' of a sort, rendering these particular guitars instantly 
collectible'').
---------------------------------------------------------------------------
    The Lacey Act's approach to protecting the legality of U.S. 
commerce is constitutional. In fact, the approach of referencing state 
or foreign law is employed in a wide variety of circumstances. Allowing 
importers to ignore the provenance of products would thwart the 
laudable goals of the Act and encourage trade in illegal goods, which 
in turn would put legitimate U.S. businesses at a disadvantage, 
threaten the sustainable supply of resources upon which American 
consumers rely, undermine the rule of law in other countries, and 
threaten our national security.
History of the Lacey Act
    Passed in 1900, the Lacey Act is the United States' oldest wildlife 
protection law. Its original goals were to address issues including the 
interstate shipment of unlawfully killed game, the introduction of 
harmful invasive species, and the killing of birds for the feather 
trade. It has been amended several times since 1900. The 1935 amendment 
expanded the scope of predicate laws to include federal and foreign 
laws. This amendment was necessary to address the evolution of 
international commerce stemming from the invention of the automobile 
and the airplane.\6\ While not the subject of much discussion in the 
1935 record, the purpose of the foreign laws provision was elaborated 
upon in the Senate Report issued in connection with the 1969 
Amendments:
---------------------------------------------------------------------------
    \6\ H.R. Rep. No. 74-886, at 2 (1935). ``The Lacey Act of 1900 (31 
Stat. 188) was in large part designed to aid the States by prohibiting 
shipment in interstate commerce of game and other wildlife killed or 
shipped in violation of their laws. The customary and ordinary means of 
transportation of game at the time the act was passed were common 
carriers by rail and water, and the act was limited to shipment by such 
carriers. Advent of the automobile, and now the airplane, has 
introduced means of conveyance of game from State to State that have 
almost completely supplanted the railroads and water carriers. It is 
proposed to amend the Lacey Act so that it will apply to the present-
day vehicles and methods of transportation.'' Id.

        On the international level . . . [b]y prohibiting the sale in 
        the United States of wildlife protected by a foreign 
        government, the demand [in the U.S.] for poached wildlife from 
        that country will be sharply reduced. In addition, however, 
        such a law is also designed to promote reciprocity. If we 
        assist a foreign country in enforcing its conservation laws by 
        closing our market to wildlife taken illegally in that country, 
        they may in turn help to enforce conservation laws of the 
        United States by prohibiting the sale within their borders of 
        wildlife taken illegally within the United States.\7\
---------------------------------------------------------------------------
    \7\ S. Rep. No. 91-526, at 12 (1969).

    The Lacey Act was overhauled in 1969, when Congress extended it to 
cover additional species, increased the maximum penalty, imposed a 
``knowingly and willfully'' standard for criminal violations, and 
beefed up civil penalties to apply to negligent violations (for 
violating the ``due care'' standard). In the 1981 amendments, Congress 
sought to strengthen the Lacey Act in light of the discovery that the 
``massive illegal trade in fish and wildlife . . . handled by well 
organized large volume operations run by professional criminals'' was 
causing ``grim environmental consequences'' and ``severe'' economic 
consequences.\8\ The 1981 amendments were designed to bolster 
enforcement under the Act. Those amendments combined the Lacey Act with 
the Black Bass Act to create a ``single comprehensive law addressing 
illegal trade in fish, wildlife and rare plants,''\9\ making the 
culpability standard less stringent (``knowingly'' instead of ``knowing 
and willfully''), increasing the civil penalties, adding a felony 
punishment scheme to encourage the DOJ to prioritize Lacey Act cases, 
and adding the strict liability forfeiture provision.\10\ The 2008 
amendments adding plants and plant products grew out of the same 
concerns leading to the strengthening of the Lacey Act in 1981--the 
``global problem of illegal logging and timber trafficking and the need 
for stronger enforcement tools to address it.''\11\
---------------------------------------------------------------------------
    \8\ S. Rep. No. 97-123, at 1 (1981): ``The illegal wildlife trade 
has grim environmental consequences. It threatens the survival of many 
species of wildlife particularly those which we value because of their 
aesthetic or commercial values. The economic consequences of this trade 
are also severe. It directly threatens America's agriculture and pet 
industries and indirectly burdens individual taxpayers. Imported 
wildlife carry diseases that can affect poultry, livestock, fish and 
pets.''
    \9\ H.R. Rep. 97-276, at 30 (1981).
    \10\ S. Rep. No. 97-123, at 2-3. ``Providing for a felony penalty 
scheme for unlawful importations of wildlife is consistent with 
existing customs law . . . By specifying in this Act that such 
importations are felonies, notice is given to all wildlife importers 
who are unaware of the fact that the customs felony law applies to 
their activities [and] that their illegal activities may subject them 
to a felony punishment scheme.'' Id. at 11; H.R. Rep. 97-276 at 20.
    \11\ Sobeck Statement, supra note 1.
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Judicial Review of the ``Foreign Laws'' Provision of the Lacey Act
    The Chairman has asked whether the Supreme Court has ever addressed 
section 3 of the Lacey Act--the section prohibiting the trade in fish, 
wildlife, plants or plant products that are illegal according to U.S. 
or foreign laws or regulations.\12\ The Supreme Court has not directly 
addressed whether the Lacey Act's use of foreign laws violates Article 
I of the Constitution. However, every circuit court to consider the 
issue has upheld the Lacey Act against constitutional challenge.\13\ 
The argument that the Lacey Act's reliance on foreign laws is 
unconstitutional has been described as ``patently frivolous,''\14\ 
``without merit,''\15\ and ``neither original nor meritorious.''\16\ As 
the United States Court of Appeals for the Third Circuit explained:
---------------------------------------------------------------------------
    \12\ 16 U.S.C. Sec. 3372(a).
    \13\ See, e.g., United States v. Rioseco, 845 F.2d 299, 302 (11th 
Cir. 1988) (Lacey Act is not an unconstitutional delegation of 
legislative power); United States v. Bryant, 716 F.2d 1091, 1094-95 
(6th Cir. 1983) (same); United States v. Molt, 599 F.2d 1217, 1219 n.1 
(3d Cir. 1979) (same); Rupert v. United States, 181 F. 87, 90 (8th Cir. 
1910) (Lacey Act is a proper exercise of Congress' power under the 
Commerce Clause); cf. United States v. Senchenko, 133 F.3d 1153, 1158 
(9th Cir. 1998) (federal regulation, which was the basis for a Lacey 
Act conviction, did not unconstitutionally delegate legislative power 
by basing a federal offense on violations of state law).
    \14\ Bryant, 716 F.2d at 1094; Molt, 599 F.2d at 1219 n.1.
    \15\ Senchenko, 133 F.3d at 1158.
    \16\ Rioseco, 845 F.2d at 302.

        The Act does not delegate legislative power to foreign 
        governments, but simply limits the exclusion from the stream of 
        foreign commerce to wildlife unlawfully taken abroad. The 
        illegal taking is simply a fact entering into the description 
        of the contraband article, just as if importations of wine or 
        automobiles were restricted to bottles bearing an official 
        foreign designation of Appellation controllee or cars bearing 
        indicia of a foreign safety inspection. Congress could 
        obviously exercise its plenary power over foreign commerce in 
        such a manner if it so chose.\17\
---------------------------------------------------------------------------
    \17\ Molt, 599 F.2d at 1219 n.1 (citing United States v. Sharpnack, 
355 U.S. 286, 294 (1958); Kentucky Whip & Collar Co. v. Illinois Cent. 
R. Co., 299 U.S. 334, 347-49 (1937); Gibbons v. Ogden, 22 U.S. 1, 207 
(1824)); accord Lee, 937 F.2d at 1393 (``Although the Act does depend 
upon violations of foreign law, . . . `the [United States] government 
is not applying the foreign law per se, but rather it is looking to the 
foreign law to determine if the Act's provisions are triggered; if so, 
then it will apply the Act, and not the foreign law.' Read in this 
manner, the Act delegates no power to foreign governments, and 
therefore does not violate article I.'').

    Prohibiting the flow of illegally obtained goods in interstate 
commerce is well within the scope of Congress' power under the Commerce 
---------------------------------------------------------------------------
Clause. As the Supreme Court explained long ago:

        Congress can certainly regulate interstate commerce to the 
        extent of forbidding and punishing the use of such commerce as 
        an agency to promote immorality, dishonesty or the spread of 
        any evil or harm to the people of other states from the state 
        of origin. In doing this it is merely exercising the police 
        power, for the benefit of the public, within the field of 
        interstate commerce.\18\
---------------------------------------------------------------------------
    \18\ Kentucky Whip, 299 U.S. at 346-47 (quoting Brooks v. United 
States, 267 U.S. 432, 436-37 (1925)).

    Accordingly, the Lacey Act's restrictions on the flow of illegal 
goods in interstate commerce are well within the scope of Congress' 
commerce power.\19\
---------------------------------------------------------------------------
    \19\ See, e.g., Rupert, 181 F. at 90; United States v. Romano, 929 
F. Supp. 502, 507-09 (D. Mass. 1996).
---------------------------------------------------------------------------
    Courts similarly have rejected arguments that the ``foreign law'' 
provision of the Lacey Act is unconstitutionally vague.\20\ Any concern 
about the vagueness of a local or foreign law is handled by the Act's 
scienter or mental state requirements.\21\ Put simply, people who 
unwittingly and reasonably find themselves in possession of illegal 
goods are not guilty under the Lacey Act. The argument that the foreign 
law provision of the Lacey Act is unconstitutionally vague--like the 
commerce power argument--is meritless.
---------------------------------------------------------------------------
    \20\ Lee, 937 F.2d at 1394-95; see also Bryant, 716 F.2d at 1095.
    \21\ See Lee, 937 F.2d at 1394-95 (citing Village of Hoffman 
Estate, 455 U.S. at 499).
---------------------------------------------------------------------------
A Wide Range of United States Laws Involve Foreign Law Predicates
    The Chairman also asked about other U.S. laws that reference 
foreign laws. The concept that American law in some circumstances must 
look to the laws of other countries is neither new nor unique to the 
Lacey Act. The fish and seafood industries, as well as the pet trade, 
have been subject to this requirement under the Lacey Act for decades. 
In United States v. Bengis, for example, the Court of Appeals for the 
Second Circuit looked to South African law to determine South Africa's 
property rights in lobster poached from its waters, ultimately 
concluding that South Africa had a property right in poached lobster, 
and was entitled to restitution for defendants' illegal poaching and 
trafficking scheme.\22\ Importers of all sorts of goods long have had 
to make sure that the goods they were importing were not considered 
stolen property under the laws of foreign countries, at the risk of 
violating the National Stolen Property Act \23\ and similar 
statutes.\24\ Indeed, the fact that foreign law at times may be 
relevant in the United States is so well established that the Federal 
Rules of Civil Procedure and the Federal Rules of Criminal Procedure 
contain explicit rules on how U.S. courts are to determine issues of 
foreign law.\25\
---------------------------------------------------------------------------
    \22\ Bengis, 631 F.3d at 39-41.
    \23\ 18 U.S.C. Sec. Sec. 2314-15; see United States v. Portrait of 
Wally, 663 F. Supp.2d 232 (S.D.N.Y. 2009) (local law determines 
property rights)
    \24\ See, e.g., 18 U.S.C. Sec. 667 (theft of livestock), Sec. 670 
(theft of medical products).
    \25\ See Fed. R. Civ. P. 44.1; Fed. R. Crim. P. 26.1.
---------------------------------------------------------------------------
    Many U.S. statutes look to foreign laws to determine legality.\26\ 
The Tariff Act of 1930, for example, prohibits the importation of any 
wild mammal or bird, or any part thereof, if ``the laws or regulations 
of [the exporting] country . . . restrict the taking, killing, 
possession, or exportation to the United States[] of any wild mammal or 
bird, alive or dead, or restrict the exportation to the United States 
of any part or product of a wild mammal or bird.''\27\ Similarly, it is 
illegal to export ``a listed chemical in violation of the laws of the 
country to which the chemical is exported,''\28\ as well as to export 
or serve as a broker or trader in an international transaction 
involving a listed chemical while knowing or having reasonable cause to 
believe ``that the chemical will be used to manufacture a controlled 
substance in violation of the laws of the country to which the chemical 
is exported.''\29\ Another statute prohibits interstate commerce in 
certain hazardous substances, with an exception for shipments that are 
being exported to a foreign country and comply with the laws of the 
importing country.\30\
---------------------------------------------------------------------------
    \26\ See, e.g., 19 U.S.C. Sec. 1527 (criminalizing importation of 
wild mammals and birds in violation of foreign law); 18 U.S.C. Sec. 546 
(prohibiting smuggling of goods into foreign countries in violation of 
that country's law); 21 U.S.C. Sec. 960(d)(2) (prohibiting exportation 
of listed chemicals in violation of foreign laws); 15 U.S.C. 
Sec. Sec. 1263-64 (exemptions from restrictions on commerce and trade 
in hazardous substances where the substances are being exported to a 
foreign country and meet that country's legal requirements); 21 U.S.C. 
Sec. 606(a) (exemption from food safety requirements food products for 
exportation where the product is legal under the foreign country's 
laws); 46 U.S.C. Sec. 30306 (creating liability in the U.S. for deaths 
at sea where, under the law of a foreign country, a cause of action 
exists for death by wrongful act, neglect, or default). U.S. laws also 
look to foreign laws for other purposes. See, e.g., 20 CFR Sec. 404.356 
(regulation providing that Social Security Administration will look to 
adoption laws of foreign country where adoption took place to determine 
whether the person is the insured's legally adopted child); 18 U.S.C. 
Sec. 1956(b)(2) (service of process on a foreign person is effective if 
it accords with the law of the country in which the person is found).
    \27\ 19 U.S.C. Sec. 1527(a).
    \28\ 21 U.S.C. Sec. 960(d)(2). Liability extends to anyone who 
``serves as a broker or trader for an international transaction 
involving a listed chemical, if the transaction is in violation of the 
laws of the country to which the chemical is exported.'' Id.
    \29\ 21 U.S.C. Sec. 960(d)(4).
    \30\ 15 U.S.C. Sec. 1264(b)(3).
---------------------------------------------------------------------------
Businesses Should Comply with the Lacey Act
    The Lacey Act helps deter companies from using suppliers that 
procure goods in an illegal or unsustainable manner. This in turn 
protects U.S. interests by ensuring a level playing field for 
legitimate businesses, helping in the fight against foreign corruption 
that threatens our national security, and protecting our supply of 
sustainable natural resources. It also helps protect victims, by 
ensuring that, when possible, the rightful owners obtain either the 
return of their stolen goods or appropriate compensation.
            Compliance Protects U.S. Interests and Reduces Corruption
    The evils targeted by the Lacey Act affect the United States' 
economic, social, environmental, and national security interests. As 
noted in the President's July 1, 2013 Executive Order:

        The poaching of protected species and the illegal trade in 
        wildlife and their derivative parts and products (together 
        known as ``wildlife trafficking'') represent an international 
        crisis that continues to escalate. Poaching operations have 
        expanded beyond small-scale, opportunistic actions to 
        coordinated slaughter commissioned by armed and organized 
        criminal syndicates. The survival of protected wildlife species 
        such as elephants, rhinos, great apes, tigers, sharks, tuna, 
        and turtles has beneficial economic, social, and environmental 
        impacts that are important to all nations. Wildlife trafficking 
        reduces those benefits while generating billions of dollars in 
        illicit revenues each year, contributing to the illegal 
        economy, fueling instability, and undermining security. Also, 
        the prevention of trafficking of live animals helps us control 
        the spread of emerging infectious diseases. For these reasons, 
        it is in the national interest of the United States to combat 
        wildlife trafficking.\31\
---------------------------------------------------------------------------
    \31\ Exec. Order No. 13,648 (2013), 78 Fed. Reg. 40,621-23 (July 5, 
2013).

    The Lacey Act helps reduce corruption and promote the rule of law 
in foreign countries, which in turn helps to level the playing field 
for U.S. companies and enhances our national security. There is a close 
link between corruption and natural resources crime. In his Statement 
for the Record on the 2012 Worldwide Threat Assessment of the U.S. 
Intelligence Community, the Director of National Intelligence included 
``environmental crime'' in the list of ways in which transnational 
organized crime threatens U.S. national interests:
    Illicit trade in wildlife, timber, and marine resources constitutes 
a multi-billion dollar industry annually, endangers the environment, 
and threatens to disrupt the rule of law in important countries around 
the world. These criminal activities are often part of larger illicit 
trade networks linking disparate actors--from government and military 
personnel to members of insurgent groups and transnational organized 
crime organizations.\32\
---------------------------------------------------------------------------
    \32\ Statement for the Record on the Worldwide Threat Assessment of 
the U.S. Intelligence Community, Before the S. Select Comm. On 
Intelligence, 113th Cong. 5-6 (2013) (statement of James R. Clapper, 
Director of National Intelligence, available at http://
www.intelligence.senate.gov/130312/clapper.pdf. The Statement also 
noted that ``[t]ransnational organized crime (TOC) networks erode good 
governance, cripple the rule of law through corruption, hinder economic 
competitiveness, steal vast amounts of money, and traffic millions of 
people around the globe.'' Id. at 5.

        Corruption related to environmental crimes presents a threat to 
        the United States' interests generally, and to U.S. companies 
        specifically. Companies that turn a blind eye to their supply 
        chains enjoy a competitive advantage that in turn adversely 
        affects legitimate companies' business and customer relations. 
        Meanwhile, overharvesting seriously affects the worldwide and 
        U.S. market's supply. As a result, any reduction in market 
        price in the short-term due to the influx of illegal goods is 
        short-lived, and prices will increase in the long-term as 
        supply is depleted due to illegal and often unsustainable 
        practices. By reducing the supply of illegal goods in the 
        marketplace, the Lacey Act benefits U.S. companies and 
        consumers. The Act reduces the demand for illegal and 
        unsustainably harvested goods, which also helps to protect the 
        global supply of natural resources upon which American 
        consumers depend. By providing a powerful enforcement tool on 
        the one hand and encouraging the creation of compliance 
        programs that help identify supply chain issues on the other, 
        the Lacey Act helps to reduce the specter of corruption, and 
        ultimately fosters an environment favorable to legitimate 
        American businesses.
            Compliance Protects the Victims of Crime
    Penalties under the Lacey Act protect victims by deterring the 
theft of fish, wildlife, and plants and plant products. Moreover, just 
as property laws protect owners' rights by requiring the return of 
stolen livestock or furniture stolen from your home, the Lacey Act 
protects the rights of victims of illegal harvesting and trade, whether 
such victims are in the U.S. or abroad.
    Victims of environmental crime might be individuals, states, or 
countries. Individuals from whom fish, wildlife, or plants or plant 
products are taken are victims who have a right to the return of their 
goods or compensation in the form of restitution. The intervening 
illegal activity does not extinguish those property rights. In 
addition, the states or countries in which the illegal takings occur 
have a right to enforce their laws, which includes the right to seize 
illegal property. This right was recognized in Bengis, where the Second 
Circuit Court of Appeals ruled that South Africa should be awarded 
compensation for the lobster stolen as part of the scheme.\33\ As Preet 
Bharara, the U.S. Attorney for the Southern District of New York, 
explained recently:
---------------------------------------------------------------------------
    \33\ See, e.g., Memorandum Opinion, United States v. Bengis, No. 
1:03-cr-00308-LAK (S.D.N.Y. Jun. 14, 2013), ECF No. 249 (awarding 
restitution to South Africa for illegally harvested lobster imported 
into the United States or intended for shipment to the United States).

        [T]hose who violate the environmental laws of another country 
        by illegally taking fish, wildlife, or plants and then import 
        these items into the U.S. will be required to pay back the 
        victims of their offenses. This Office remains committed to 
        ensuring, no matter how long it takes, that those who would 
        damage another country's environment and seek to profit in the 
        U.S. market will have to remedy their violations of law and 
        repay those foreign governments.\34\
---------------------------------------------------------------------------
    \34\ Press Release, United States Attorney's Office, Southern 
District of New York, Officers of Fishing and Seafood Corporations 
Ordered to Pay Nearly $22.5 Million to South Africa for Illegally 
Harvesting Rock Lobster and Smuggling It into the United States (June 
14, 2013), available at http://www.justice.gov/usao/nys/pressreleases/
June13/BengisArnoldetalRestitutionPR.php?print=1.

    By protecting the property rights of victims, the Lacey Act 
provides justice to victims and deters future criminal activity. It is 
the importer's responsibility to know its suppliers and put measures in 
place to ensure that its goods are legal. Just as a legitimate art 
gallery requires evidence of provenance before purchasing paintings or 
artifacts, or a seller of name-brand shoes needs comfort that it is not 
buying counterfeits, companies that are dealing in goods covered by the 
Lacey Act are responsible for understanding and controlling their 
supply chains and, if appropriate, demanding contractual warranties to 
protect themselves.
Responses to Concerns
            Scope of Foreign Laws
    Some have argued that the scope of foreign laws triggering a 
violation of the Lacey Act is too broad. In fact, the categories of 
foreign laws implicated by the Lacey Act are clear and well-defined. 
Legitimate seafood companies have been complying with the Lacey Act for 
decades.
    Critics of the Lacey Act frequently point to the case of United 
States v. McNab as an example, claiming that the defendants in that 
case somehow were convicted unjustly of Lacey Act violations and sent 
to jail for technical violations. That argument disingenuously 
misconstrues the McNab case. A closer look reveals that law 
enforcement, relying in part on the Lacey Act, in fact put an end to a 
large, sophisticated, and destructive international criminal 
organization engaged in a massive scheme that involved more than 40 
shipments of illegal spiny lobster tails from Honduras, adding up to 
more than 1.6 million pounds of illegal spiny lobster with a retail 
value of over $17 million.\35\
---------------------------------------------------------------------------
    \35\ Press Release, NOAA, McNab to Continue Serving Federal Prison 
Sentence for Lobster Smuggling (Mar. 22, 2004), available at http://
www.publicaffairs.noaa.gov/releases2004/mar04/noaa04-r119.html.
---------------------------------------------------------------------------
    As a part of the scheme, Honduran national David McNab and his co-
conspirators (among other things) illegally harvested massive 
quantities of undersized and egg-bearing lobster, misreported their 
catch to Honduran authorities, packaged the illegal goods in ways that 
helped them avoid detection, and smuggled their illegal contraband into 
the United States, where it was were sold to unwitting American 
consumers for significant profit. The co-conspirators intentionally 
falsified import documents by using a secret code to disguise the true 
size of illegal, undersized lobster. With at least one shipment, a co-
conspirator falsely relabeled cases of Honduran lobster as a product of 
the United States. After law enforcement intercepted one illegal 
shipment on its way to Alabama, the co-conspirators tried to evade law 
enforcement and continue their scheme by shipping illegal lobster tails 
from Honduras to Los Angeles via airplane. After one of those shipments 
was caught and seized in Los Angeles, the co-conspirators continued 
with their illegal smuggling by trying to ship the illegal lobster 
through Canada.
    A jury in Alabama found each of the four defendants in McNab guilty 
of knowingly violating the law by committing one or more of the 
following crimes: conspiracy, smuggling, money laundering, Lacey Act 
violations, and false labeling.\36\ The defendants' criminal scheme had 
a devastating impact on lobster populations in Honduras.\37\ The scheme 
impacted the United States' supplies as well; the offspring of lobster 
populations in areas like Honduras and Nicaragua are, given the current 
flows in the Gulf, the primary parental source for replenishing lobster 
stocks in the southeastern United States.\38\ Florida's lobster 
harvests dramatically declined in part because of the illegal harvest 
of small lobsters and female egg-bearing lobsters in the source 
fisheries off Central America.\39\ The McNab defendants were guilty, 
they were found guilty by a jury, and their convictions were upheld on 
appeal. The United States Supreme Court denied McNab's petition for a 
writ of certiorari.
---------------------------------------------------------------------------
    \36\ United States v. McNab, 331 F.3d 1228, 1234 n.10 (11th Cir. 
2003).
    \37\ Press Release, NOAA, supra note 35.
    \38\ Id.
    \39\ Id.
---------------------------------------------------------------------------
    Critics frequently claim that the McNab defendants went to jail for 
violating a Honduran ``cardboard box'' regulation. That is simply 
false, as explained above. Moreover, critics' protestations 
notwithstanding, the Honduran inspection and processing requirements 
played an important role in Honduras' efforts to combat the illegal 
lobster trade. By packaging lobster in seventy-pound frozen, unsorted 
clumps, McNab made it virtually impossible for authorities to inspect 
for illegal undersized or egg-bearing lobster, which in turn helped the 
co-conspirators better hide the illegal lobsters from authorities and 
continue their criminal scheme, all to the detriment of the species, 
the legitimate fishermen relying on the harvest for their livelihood, 
and the consumers (including American consumers) of the lobsters. In 
that regard, the Honduran processing regulations--while seemingly 
technical--are quite similar to the technical labeling and packaging 
requirements the United States commonly uses in areas such as food 
safety, drug safety, and environmental protection. Such requirements 
provide a common and useful tool in the battle against illegal poaching 
and logging. Indeed, a wide range of legal regimes employ similar 
technical processing, declaration, or permitting requirements because 
such requirements often provide the best way to prevent the abuse and 
degradation of the environment. The Clean Water Act, which requires 
that dischargers apply for a permit to release pollutants into the 
waters of the United States,\40\ provides one example; the permitting 
requirements help regulators ensure that the water bodies are 
adequately protected from excessive pollution. The Lacey Act's foreign 
laws provision acknowledges the importance of the laws and regulations 
designed to promote resource conservation through these vitally 
important, indirect measures.
---------------------------------------------------------------------------
    \40\ 33 U.S.C. Sec. 1342.
---------------------------------------------------------------------------
            Database of Foreign Laws
    Some have suggested that the government should create a list or 
database of the foreign statutes that could trigger Lacey Act 
violations, and that only laws on that list could support a prosecution 
under the Lacey Act. However, creating such a database would be both 
inefficient and unproductive. Companies selling goods in the United 
States should know where the goods come from, and are in the best 
position to make sure that their suppliers are following the law. It 
would not be in their best interest to have someone in the government 
create a list of laws that could trigger the Lacey Act; such a list 
inevitably would be over- or under-inclusive, and it would not provide 
any meaningful protection for the company in court, for consumers 
seeking comfort that they are purchasing legal goods, or for the 
victims who had their resources stolen. In an enforcement action, 
companies should have the right to argue their understanding of the 
predicate law at issue, and it is up to the judge or jury to determine 
whether a particular good or activity is illegal under a particular 
law.
            Alleged Ambiguity of Foreign Laws
    Some have raised concerns that an ambiguous foreign law could 
result in a criminal conviction and/or the forfeiture of goods. That 
argument misunderstands the Lacey Act.
    Mens rea/scienter. For an importer to be found guilty of a felony 
under the Lacey Act, the government must show that she imported fish, 
wildlife, plants, or plant products that she knew were illegal. In 
cases where a person, in the exercise of due care, should have known 
that wood she imported had been stolen, she is guilty of a 
misdemeanor.\41\ Where a foreign law is ambiguous or indecipherable, 
the government will be hard pressed to prove either knowledge or the 
absence of due care, and most likely would never bring such a case. As 
the Ninth Circuit Court of Appeals explained in Lee:
---------------------------------------------------------------------------
    \41\ The ``due care'' standard serves an important role in 
reinforcing lawful behavior and in leveling the playing field between 
legitimate companies that strive to ensure the legality of their 
operations and those companies that are indifferent as to the legality 
of the goods they are importing and supplying to the American consumer. 
The ``due care'' standard's fact-specific and flexible nature helps 
protect companies that are taking measures to ensure their goods are 
legal. Not only does the due care standard allow companies to tailor 
their compliance programs to their own supply chains, but it also takes 
into account the foreign laws under which the companies are operating 
so that ambiguous laws do not subject innocent, diligent companies to 
unfair liability.

        [The Lacey Act] scienter element prevents the Act from 
        criminally punishing those who violate the Act's provisions but 
        are reasonably unaware that they are doing so. The protections 
        inserted by Congress prevent the Act from ``trap[ping] the 
        innocent by not providing fair warning,'' and therefore 
        mitigate any potential vagueness of the Act.\42\
---------------------------------------------------------------------------
    \42\ Lee, 937 F.2d at 1395 (internal citations omitted).

    CAFRA and Remission. The Civil Asset Forfeiture Reform Act 
(``CAFRA''), incorporated by reference in the Lacey Act, explicitly 
contemplates a process under which a person may file a claim for the 
return of seized property. After the seizure, the government must 
provide notice to the person from whom the property was seized. That 
person may either: (1) file a claim in court contesting forfeiture; or 
(2) submit a petition straight to the agency that seized the 
property.\43\ The second option commonly is referred to as 
``remission.'' The federal departments charged with enforcing the Lacey 
Act, including the Departments of Justice, Interior, and Agriculture, 
and the National Oceanic and Atmospheric Administration, all have 
regulations permitting people to petition for remission and seek the 
return of goods that otherwise would be illegal to possess under the 
Lacey Act.\44\ The petitioner sets forth the reasons why the goods 
should be returned and the agency determines whether, in light of the 
particular circumstances, mitigation is warranted or the goods should 
be returned.\45\ In fact, that is what happened in Gibson. Gibson 
conceded that the Madagascar wood was illegal and that wood was 
forfeited. However, as noted above, because the Indian law was 
ambiguous with respect to whether the Indian wood Gibson had imported 
was legally exported ``finished'' wood or illegally exported 
``unfinished'' wood, the government allowed Gibson to file an unopposed 
petition for remission to seek the return of that wood.\46\ Gibson 
filed the remission petition and that Indian wood was in fact 
returned.\47\
---------------------------------------------------------------------------
    \43\ See 18 U.S.C. Sec. 983(a).
    \44\ See 50 CFR Sec. 12.24 (FWS, Department of Interior); 7 CFR 
Sec. 356.7 (Department of Agriculture); 15 CFR Sec. 904.506 (NOAA); 28 
CFR Sec. 9.4 (DOJ).
    \45\ See, e.g., 50 CFR Sec. 12.24(e).
    \46\ Gibson CEA, supra note 4 at 3.
    \47\ See note 5, supra.
---------------------------------------------------------------------------
Conclusion
    The Lacey Act provides an important tool that helps enforcement 
officials fight crime, corruption, and the theft of fish, wildlife, and 
plants and plant products. The foreign law provision of the Lacey Act 
is neither unique nor unconstitutional. It is a perfectly legitimate 
means of furthering the goals of the Act and ensuring that only legal 
goods are imported into the United States. Companies operating in or 
procuring materials from other countries have a responsibility to 
ensure that the materials they bring into the United States are legal. 
As a consumer, I expect companies to do so and it is hard to imagine 
that any responsible, law-abiding American would want to buy goods that 
were stolen in another country or otherwise obtained in violation of 
another country's laws. Without the foreign law provision of the Lacey 
Act, the problems of wildlife poaching, fish overharvesting, and 
illegal logging would proliferate, to the detriment of American 
businesses and consumers of present and future generations.
    Thank you again for inviting me to appear today. I would be happy 
to answer any questions.
                                 ______
                                 
    Dr. Fleming. Yes. Thank you, Mr. Asner.
    We now move along to Mr. Rubinstein. You are recognized for 
5 minutes, sir.

 STATEMENT OF REED D. RUBINSTEIN, ESQ., PARTNER, DINSMORE AND 
                             SHOHL

    Mr. Rubinstein. Thank you, Mr. Chairman, Ranking Member 
Sablan, members and staff of the Committee. My name is Reed 
Rubinstein, I am a partner with the firm of Dinsmore and Shohl 
in Washington, D.C. I am testifying here today on behalf of the 
U.S. Chamber Institute for Legal Reform.
    First of all, it is a real pleasure, again, to be before 
you talking about this critically important issue. To begin 
with, I want to make it clear--and clarity is important--that 
ILR strongly supports the Lacey Act's important fish, wildlife, 
and plant conservation goals. Those in our country who import 
or use medicines containing rhino horns, tiger bone, or bear 
bile, who eat sea turtle eggs and bush meat, seek out religious 
articles made from ivory obtained through the murderous 
poaching of elephants or rhinos, or purchase wood products 
known to have been illegally imported ought to be prosecuted. 
But ILR believes that the Lacey Act reform is needed, 
desperately so.
    As written, it requires American citizens to comply with 
foreign law, very broadly defined, and as interpreted by U.S. 
bureaucrats, to avoid criminal and civil jeopardy under U.S. 
law. The government refuses to translate and specify the 
applicable foreign laws that are to provide basic rules of the 
road so that stakeholders may distinguish permitted from 
proscribed conduct.
    The dynamic incorporation of foreign law into the U.S. code 
is a prima facie threat to democratic principles, contrary to 
all prudential principles of government transparency and 
accountability, and it should not be tolerated in a well-
ordered constitutional republic.
    Furthermore, the government's refusal to maintain a data 
base of applicable foreign wildlife and plant laws, and to 
articulate intelligible principles of due care, so that 
stakeholders have reasonable notice of proscribed conduct is 
profoundly unfair to the regulated community, and has, 
paradoxically, hampered Lacey Act compliance.
    The Congressional Research Service reports that, lacking 
clear standards, government officials ``might use information 
gained from foreign governments, non-governmental 
organizations, private citizens, anonymous tips, declarations, 
industry and border agents, among others,'' to enforce Lacey. 
The disorganized, ad hoc enforcement approach means agencies 
and prosecutors are afforded unbounded discretion to prosecute 
Americans in U.S. courts for violations of foreign laws that 
are enacted, interpreted, and ``enforced'' by corrupt 
authoritarian regimes based on information obtained from highly 
questionable and biased sources.
    Also, there is more than ample evidence that the 
implementation of the 2008 Lacey Act amendments has proven to 
be expensive and unwieldy and ineffective. There is no evidence 
that those amendments have actually reduced the illegal logging 
rate. Although 5 years have passed since enactment, the USDA 
still cannot provide specific cost figures for the new 
requirements on legal plant imports, nor has it been able to 
determine whether the Act has led to a reduction in the level 
of illegal logging and trafficking.
    Nevertheless, reform opponents will tell you that Congress 
must choose between aligning Lacey with core American legal 
norms and values, or protecting wildlife, fish, and plants. 
This is a false choice.
    First, the Lacey Act's unique dynamic incorporation of 
foreign law is contrary to our most basic legal norms, and 
simply bad public policy, because it gives the government such 
broad enforcement discretion. On August 24, 2011, the Gibson 
Guitar factories in Nashville and Memphis were raided by armed 
agents from the U.S. Government. The company was not accused of 
importing banned wood. Rather, guns were drawn against the 
company and its workers because someone somewhere in the 
Federal bureaucracies thought that Gibson ran afoul of a 
technical Indian regulation governing the export of finished 
wood products designed to protect Indian woodworkers from 
foreign competition. To make matters worse, the Indian 
Government certified that the goods were properly and legally 
exported.
    In July of 2012, Gibson and the government settled. 
Interestingly, the settlement, which was praised by the Justice 
Department in a press release, speaks very little to the Indian 
wood, other than to say that, notwithstanding the armed raid, 
certain questions and inconsistencies exist regarding the 
tariff classification of the wood. And, accordingly, until the 
Indian Government informs the U.S. Government that such imports 
are expressly prohibited by laws related to Indian foreign 
trade policy, there will be no enforcement against Gibson.
    Frankly, it is difficult to imagine anyone who cares about 
Anglo-American principles of due process and the rule of law 
justifying the armed raid of Gibson.
    My time is up. I would be happy to answer questions. Thank 
you.
    [The prepared statement of Mr. Rubinstein follows:]

Statement of Reed D. Rubinstein, Esq., Partner, Dinsmore & Shohl, LLP, 
      for the U.S. Chamber of Commerce Institute for Legal Reform

    My name is Reed D. Rubinstein and I am a partner in the Washington, 
D.C. office of Dinsmore & Shohl, LLP. For over twenty-five years, I 
have practiced environmental and administrative law, defending 
individuals and companies in federal civil and criminal enforcement 
matters. I also have served as the U.S. Chamber of Commerce's Senior 
Counsel for Environment, Technology and Regulatory Affairs, and as an 
adjunct professor of environmental law at the Western New England 
School of Law.
    I am testifying today on behalf of the U.S. Chamber's Institute for 
Legal Reform (``ILR'') in support of Lacey Act reform. ILR promotes 
civil justice reform through legislative, political, judicial and 
educational activities at the national, state and local levels. The 
U.S. Chamber is the world's largest business federation, representing 
the interests of more than three million businesses and organizations 
of every size, sector, and region.
I. SUMMARY
    ILR strongly supports the Lacey Act's important fish, wildlife and 
plant conservation goals.\1\ Those who import, use, consume, collect or 
benefit from ``medicines'' containing rhino horns, tiger bone or bear 
bile; shark fins, sea turtle eggs and ``bush meat''; ``religious 
articles'' made from ivory obtained through the murderous poaching of 
elephants; or rare wood illegally cut from protected forests ought to 
be prosecuted. However, the Lacey Act needlessly subjects American 
citizens to criminal and civil jeopardy for ``violations'' of an 
impossibly broad range of foreign laws, regulations and enactments.\2\ 
The statute's broad and non-specific incorporation of foreign law is a 
prima facie threat to democratic principles;\3\ functionally 
inconsistent with core republican values and basic due process; and 
contrary to all prudential principles of government transparency and 
accountability.\4\
---------------------------------------------------------------------------
    \1\ 18 U.S.C. Sec. Sec. 42-43; 16 U.S.C. Sec. 3371 et seq.
    \2\ Indonesia, for example, has over nine hundred laws, 
regulations, and decrees that govern timber exploitation, 
transportation, and trade. Saltzman, Establishing a ``Due Care'' 
Standard Under the Lacey Act Amendments of 2008, 109 Mich. L. Rev. 
First Impressions 1, 6 (2010). That foreign ``laws'' lack a direct 
nexus to fish, wildlife or plant conservation, or provide only for 
civil fines, or even are ruled invalid and retroactively repealed by 
the government that enacted them in the first instance, is of no 
moment. See generally United States v. McNab, 324 F.3d 1266, 1268 (11th 
Cir.) cert. denied 540 U.S. 1177 (2004); United States v. Lee, 937 F.2d 
1388, 1393 (9th Cir.) cert. denied 502 U.S. 1076 (1992).
    \3\ Dorf, Dynamic Incorporation of Foreign Law, 157 Penn. L. Rev. 
103, 115 (2008); Grossman, TESTIMONY BEFORE THE SUBCOMMITTEE ON THE 
CONSTITUTION, COMMITTEE OF THE JUDICIARY, UNITED STATES HOUSE OF 
REPRESENTATIVES (December 14, 2011) available at http://
www.heritage.org/research/testimony/2011/12/judicial-reliance-on-
foreign-law#_ftn5 (accessed July 8, 2013). As Grossman put it: 
Important American interests may go unrepresented (to say the least) 
when, for example, we incorporate Indian trade-protection law into our 
criminal code . . . Why should we adopt laws that are not only 
difficult to ascertain and apply, but are also inconsistent with, or 
even contrary to, our preferences, values, and interests?
    \4\ See generally City of Chicago v. Morales, 527 U.S. 41 (1999); 
Grayned v. City of Rockford, 408 U.S. 104, 108 (1972); Posner, 
Foreword: A Political Court, 119 Harv. L. Rev. 31, 88-89 (2005).
---------------------------------------------------------------------------
    The government's failure to both maintain a database of applicable 
foreign wildlife and plant laws and to articulate intelligible 
principles of ``due care'' to guide stakeholders has hampered Lacey Act 
compliance. Currently, the government charges American musicians, 
fishermen and florists with knowledge of all potentially applicable 
foreign ``laws'' and then requires them to guess, at the risk of their 
liberty and property, how much ``due diligence'' is needed in any given 
case.\5\ Such a legal regime tramples ordinary notions of fair play, 
offends well-settled rules of law and should not be tolerated in a 
well-ordered, constitutional republic.\6\
---------------------------------------------------------------------------
    \5\ See PowerPoint: Wayne D. Hettenbach, Senior Trial Attorney 
Environmental Crimes Section, U.S. Department of Justice, The Lacey 
Act: Implications for Supply Chains, available at 
http://www.google.com/
url?sa=t&rct=j&q=the%20lacey%20act%3A%20implications%20for%20supply%20ch
ains&source
=web&cd=1&ved=0CCoQFjAA&url=http%3A%2F%2Fwww.americanbar.org%2Fcontent%2
Fdam
%2Faba%2Fadministrative%2Flitigation%2Fmaterials%2F2013_jointcle%2Fthe_l
acy_act_
implications_supply_chains.authcheckdam.pdf&ei=MTPbUcWjC4_BywGY8oGgBA&us
g=
AFQjCNFsj6zvWlQ7_3KVBDnIrQH1IFq17w (accessed July 8, 2013); Testimony 
of Craig Foster, Legal Timber Protection Act: Hearing on H.R. 1497 
Before the Subcomm. on Fisheries, Wildlife and Oceans of the H. Comm. 
on Natural Resources, 110th Cong. at 55 (2007)(discussing compliance 
barriers and explaining that ``it is necessary to understand that long 
supply chain and the fact that there are many people along that supply 
chain . . . I cannot audit the entire supply chain . . . Criminal 
behavior is criminal behavior. All I can do is work with the best of my 
knowledge''); United States v. 144,774 Pounds of Blue King Crab, 410 
F.3d 1131 (9th Cir. 2005).
    \6\ See Morales, 527 U.S. at 56 (citation omitted). As the Supreme 
Court held long ago: That the terms of a penal statute . . . must be 
sufficiently explicit to inform those who are subject to it what 
conduct on their part will render them liable to its penalties, is a 
well-recognized requirement, consonant alike with ordinary notions of 
fair play and the settled rules of law. And a statute which either 
forbids or requires the doing of an act in terms so vague that men of 
common intelligence must necessarily guess at its meaning and differ as 
to its application, violates the first essential of due process of law. 
Connally v. General Constr. Co., 269 U.S. 385, 391 (1925).
---------------------------------------------------------------------------
    As the Congressional Research Service points out, this troubling 
failure to distinguish between permissible and proscribed conduct also 
renders enforcement ``challenging.''\7\ Lacking clear standards, 
government officials ``might use information gained from foreign 
governments, nongovernmental organizations, private citizens, anonymous 
tips, declarations, industry, and border agents, among others . . ..'' 
This disorganized, ad hoc enforcement approach raises the troubling 
specter of Americans being prosecuted in U.S. courts for violations of 
foreign laws enacted, interpreted and ``enforced'' by corrupt, 
authoritarian regimes.\8\
---------------------------------------------------------------------------
    \7\ Cong. Res. Service, ``The Lacey Act: Compliance Issues Related 
to Importing Plants and Plant Products'' at 8 (May 10, 2013)(citations 
omitted).
    \8\ As one commentator put it: Consider, for example, the case of 
Bigleaf mahogany imports from Peru . . . Peruvian officials have . . . 
supplied false documentation for these products . . . Not only was 
timber being illegally harvested in Peru, but illegal timber was also 
being moved into Peru from neighboring countries to be laundered . . . 
Such ``deeply entrenched patronage systems'' are most often linked to 
political networks . . . Clearly, it is wrong to require U.S. importers 
to comply with a myriad of foreign laws when the governments enacting 
these laws not only fail to adhere to them, but seem to be at the very 
root of the problem. Tanczos, A New Crime: Possession of Wood--
Remedying the Due Care Double Standard of the Revised Lacey Act, 42 
Rutgers L. J. 549, 572 (2011); see also Henry Juszkiewicz, Repeal the 
Lacey Act? Hell No, Make It Stronger! The Huffington Post Green Blog 
(Nov. 2, 2011) available at http://www.huffingtonpost.com/henry-
juszkiewicz/gibson-guitars-lacey-act_b_1071770.html (accessed July 14, 
2013) (``The U.S. should also use the power of the marketplace to 
encourage sustainable harvesting practices in countries whose forestry 
systems are rife with graft and corruption'') (emphasis added).
---------------------------------------------------------------------------
    Finally, although there is ample evidence that implementation of 
the 2008 Lacey Act amendments has proven to be expensive and unwieldy 
and ineffective,\9\ there is no evidence that the amendments have 
actually reduced the illegal logging rate.\10\ Although five years have 
passed since enactment, the USDA still cannot provide specific cost 
figures for the new requirements on legal plant imports or been able to 
``determine whether the Act has led to a reduction in the level of 
illegal logging and trafficking.''\11\
---------------------------------------------------------------------------
    \9\ Animal and Plant Health Inspection Service, U.S. Dep't of 
Agric., Report to Congress with Respect to Implementation of the 2008 
Amendments to the Lacey Act at 10 (``15 percent of the electronic 
declarations . . . [and] 32 percent of the paper declarations appear to 
be missing . . . information''); 11-15 (describing implementation 
problems and errors); 17 (``About 46% of the electronic declarations 
are missing accurate information . . . This makes it impossible to 
accurately reconcile the cumulative value reported on electronic import 
declarations with the value reported for customs purposes'') (May, 
2013).
    \10\ Id. at 25.
    \11\ Id.
---------------------------------------------------------------------------
    ILR believes that Congress needs to take a hard look at the Lacey 
Act to determine whether it has an appropriate threshold mens rea 
requirement; adequately defines both the actus reus (guilty act) and 
the mens rea of the offense in specific and unambiguous terms; clearly 
states whether the mens rea requirement applies to all the elements of 
the offense or, if not, which mens rea terms apply to which elements of 
the offense; sets proper limits on enforcement discretion; and 
incorporates the performance metrics required for meaningful 
oversight.\12\ ILR further believes that Congress needs to correct the 
Lacey Act's unduly broad incorporation of foreign law, perhaps by 
specifically defining those foreign laws that are jeopardy 
``triggers.'' Congress should also clarify the ``due care'' defense so 
that Americans have fair notice of prohibited conduct. U.S. courts, 
enforcement agencies and citizens all would benefit from clear ``rules 
of the road.''\13\ In any event, our Constitution and our legal 
traditions demand nothing less. Finally, Congress should address the 
``contraband'' issue by ensuring that Civil Asset Forfeiture Relief Act 
(``CAFRA'')-defined innocent owners \14\ are not subject to Lacey Act 
forfeiture.
---------------------------------------------------------------------------
    \12\ See generally Walsh & Joslyn, Without Intent: How Congress Is 
Eroding the Intent Requirement in Federal Law 26-31 (2010) available at 
http://www.nacdl.org/withoutintent/(accessed July 8, 2013).
    \13\ See Juszkiewicz, supra at note 8. Gibson CEO Juszkiewicz 
suggests that limited government enforcement dollars are likely better 
devoted to fighting illegal logging and poaching by bad actors and not 
to fights with American companies that try hard to comply with the law. 
Therefore, he advocates creating a compliance system that allows 
businesses to know before they buy wood and other plant products 
whether or not they are in compliance. Id.
    \14\ 18 U.S.C. Sec. Sec. 983(d)(2)-(3).

---------------------------------------------------------------------------
II. DISCUSSION.
A. The Lacey Act's Background.
    Passed by Congress in 1900, the Lacey Act was the first federal 
wildlife protection law. In its initial iteration, the Act supported 
state game animal and bird protection efforts by prohibiting the 
interstate shipment of wildlife killed in violation of state or 
territorial law, requiring wildlife to be clearly marked when shipped 
in interstate commerce, banning the importation of certain animals 
(including English sparrows) that could harm U.S. crop production and 
authorizing the federal government to preserve and restore game bird 
populations.\15\ Amendments in 1935 prohibited interstate commerce in 
wildlife captured or killed in violation of any federal or foreign law. 
Amendments in 1945 banned the importation of wildlife under ``inhumane 
or unhealthful'' conditions.\16\ Amendments in 1981 diluted the mens 
rea requirement from ``willfully'' to ``knowingly.''\17\ And, 
amendments in 2008 criminalized the import, export, transport, sale, 
receipt, acquisition or purchase of any plant or plant product taken, 
possessed, transported or sold in violation of any domestic or foreign 
law.\18\
---------------------------------------------------------------------------
    \15\ U.S. Fish & Wildlife Service, ``Nation Marks Lacey Act 
Centennial, 100 Years of Federal Wildlife Law Enforcement,'' available 
at http://www.fws.gov/pacific/news/2000/2000-98.htm (accessed July 12, 
2012).
    \16\ Id.
    \17\ See Lacey Act Amendments of 1981, Pub. L. 97-79.
    \18\ 16 U.S.C. Sec. 3372(a)(2).
---------------------------------------------------------------------------
    Interestingly, the legislative history is bare of substantive 
discussion regarding the consequences of the statute's uniquely broad 
dynamic incorporation of foreign law into the U.S. Code.
B. Lacey Act Structure
    The Lacey Act uniquely subjects American citizens to domestic 
jeopardy for the violation of a foreign sovereign's enactments.\19\ 16 
U.S.C. Sec. 3373 imposes strict civil and criminal liability for 
conduct ``in violation of, or in a manner unlawful under, any 
underlying law'' that is ``prohibited'' by the Act, subject only to a 
``due care'' defense. Section 3372(a)(2) prohibits any person to 
``import, export, transport, sell, receive, acquire, or purchase in 
interstate or foreign commerce'' any fish or wildlife ``taken, 
possessed, transported or sold in violation of . . . any foreign law,'' 
and plants ``taken, possessed, transported or sold in violation of . . 
. any foreign law'' including laws governing the payment of appropriate 
royalties, taxes or stumpage fees and ``the export or transshipment'' 
thereof. Section Sec. 3371(d) defines ``law'' to mean ``laws, treaties, 
regulations or Indian tribal laws which regulate the taking, 
possession, importation, exportation, transportation, or sale of fish 
or wildlife or plants.''
---------------------------------------------------------------------------
    \19\ McNab, 324 F.3d at 1274 (Fay, J. dissenting) (``the Lacey Act, 
by its very terms, is dependent upon the laws of a foreign 
sovereign''). As a Justice Department official testified in 2007: One 
unique feature of the Lacey Act is that it allows the incorporation of 
foreign law as an underlying law or predicate offense that ``triggers'' 
a Lacey Act violation . . . The law or regulation must be of general 
applicability, but may be a local, provincial, or national law. The 
defendant need not be the one who violated the foreign law . . . 
However, the defendant must know or, in the exercise of due care, 
should know, about its [violation]. See Testimony of Eileen Sobeck 
Before the Subcommittee on Fisheries, Wildlife and Oceans, Committee on 
Natural Resources, U.S. House of Representatives Concerning H.R. 1497 
at 4 (Oct. 16, 2007) available at http://naturalresources.house.gov/
uploadedfiles/sobecktestimony10.16.07.pdf (accessed July 14, 2013). The 
Alien Tort Statute (``ATS'') is commonly cited along with the Lacey Act 
as the primary examples of federal statutes that incorporate foreign 
laws into the U.S. Code. The ATS gives federal courts jurisdiction over 
``any civil action by an alien, for a tort only, committed in violation 
of the law of nations.'' 28 U.S.C. Sec. 1350; Sosa v. Alvarez-Machain, 
542 U.S. 692, 723-24 (2004). However, U.S. courts have interpreted the 
ATS's ``law of nations'' trigger far more narrowly than the Lacey Act's 
``foreign law'' trigger. Compare Kiobel v. Royal Dutch Petroleum, ___ 
U.S. ___ (2013); Sosa, 542 U.S. at 724 (the ATS was designed to permit 
adjudication of a narrow class of torts in violation of the law of 
nations that would have been recognized within the common law at the 
time of its enactment); Lee, 937 F.2d at 1391.
---------------------------------------------------------------------------
    Lacey Act civil liability and criminal penalties attach when ``in 
the exercise of due care'' a defendant ``should know'' that the fish, 
wildlife or plants were taken in violation of the underlying law.\20\ 
The Lacey Act does not define ``due care.'' The legislative history 
states that ``[d]ue care simply requires that a person facing a 
particular set of circumstances undertakes certain steps which a 
reasonable man would take to do his best to insure that he is not 
violating the law.'' \21\ No clarifying regulations have been issued by 
any enforcing federal agency.\22\
---------------------------------------------------------------------------
    \20\ See 16 U.S.C. Sec. 3373.
    \21\ Lacey Act Amendments of 1981, S. Rep. No. 97-123, 97th Cong., 
1st Sess. 10-12 (1981); 1981 U.S.C.C.A.N. 1758-59. The Committee 
explained: [D]ue care means that degree of care which a reasonably 
prudent person would exercise under the same or similar circumstances. 
As a result, it is applied differently to different categories of 
persons with varying degrees of knowledge and responsibility. For 
example, zoo curator's [sic], as professionals, are expected to apply 
their knowledge to each purchase of wildlife. If they know that a 
reptile is Australian and that Australia does not allow export of that 
reptile without special permits, they would fail to exercise due care 
unless they checked for those permits. On the other hand, the airline 
company which shipped the reptile might not have the expertise to know 
that Australia does not normally allow that particular reptile to be 
exported. However, if an airline is notified of the problem and still 
transships the reptile, then it would probably fail to pass the due 
care test. Id.
    \22\ Tanczos, A New Crime: Possession of Wood--Remedying the Due 
Care Double Standard of the Revised Lacey Act, 42 Rutgers L. J. 549, 
567 (2011).
---------------------------------------------------------------------------
    In 2010, the United States Department of Agriculture Animal and 
Plant Health Inspection Service identified ``Tools to Demonstrate Due 
Care'' in a PowerPoint presentation.\23\ These included ``asking 
questions,'' ``compliance plans,'' ``industry standards,'' ``records of 
efforts,'' and, helpfully, ``changes in above in response to practical 
experiences.''\24\
---------------------------------------------------------------------------
    \23\ U.S. Dep't of Agric., Lacey Act Primer 20 (April 2010) 
available at http://www.aphis.usda.gov/plant_health/lacey_act/
downloads/LaceyActPrimer.pdf (accessed July 9, 2013).
    \24\ Id.; EIA, Setting the Story Straight--The U.S. Lacey Act: 
Separating Myth from Reality 2 (2010) available at http://www.eia-
global.org/PDF/Report--Mythbusters--forest--Jan10.pdf (accessed July 9, 
2013)(```Lacey compliance' is not defined by any one document, 
checkbox, due diligence system or due care check-list, and do not 
expect the U.S. government to provide that'').
---------------------------------------------------------------------------
    In a recent Justice Department presentation, the sum total of the 
``due care'' discussion was a citation to the statutory language, a 
quote from the legislative history and a list of seven ``Common Sense 
Red Flags.'' The ``red flags'' included ``Goods significantly below 
market rate'', ``Unusual sales methods or practices . . .'', ``News 
articles or Internet information indicating a potential problem'' and 
``Inability to get rational answers to questions'', among other 
things.\25\
---------------------------------------------------------------------------
    \25\ Hettenbach, supra at note 6.

---------------------------------------------------------------------------
III. WHY CONGRESS SHOULD REFORM THE LACEY ACT.
    The Lacey Act's conservation goals are of critical importance to 
all Americans. However, the statute's broad and non-specific 
incorporation of foreign law is a prima facie threat to democratic 
principles; functionally inconsistent with core republican values and 
accepted notions of basic due process; and contrary to all prudential 
principles of government transparency and accountability. Also, the 
government's enforcement approach is constitutionally suspect and 
practically problematic. Reform is appropriate.
A. The Lacey Act's Dynamic Incorporation Of Foreign Law Is Incompatible 
        With Bedrock American Legal Norms.
    The Lacey Act's dynamic and broad incorporation of foreign law is 
simply incompatible with bedrock American legal and constitutional 
norms. Fundamentally, the Lacey Act's incorporation poses a prima facie 
threat to democracy because it delegates decisions about American 
citizens' conduct from the hands of the American people's 
representatives to often unaccountable and corrupt persons who do not 
share our Constitutional values or respect our basic Anglo-American 
legal principles of government transparency and accountability. 
Congress should not and need not protect wildlife, fish and plants by 
outsourcing U.S. law to authoritarian or corrupt countries.
B. The Government's Refusal To Specify Applicable Foreign Laws Or To 
        Set Clear Compliance Standards Is Constitutionally Problematic 
        And Counterproductive.
    The government's refusal both to create a database of applicable 
foreign laws and to set clear compliance standards raises profound 
constitutional concerns and frustrates the Lacey Act's conservation 
purpose. To begin with, ``A vague law impermissibly delegates basic 
policy matters to policemen, judges, and juries for resolution on an ad 
hoc and subjective basis, with the attendant dangers of arbitrary and 
discriminatory application.''\26\ The Gibson case, in which U.S. 
regulators rejected the Indian government's interpretation of Indian 
law, and the McNab decision, in which a U.S. court rejected the 
Honduran government's interpretation of Honduran law, demonstrate that 
Lacey Act enforcement is ``ad hoc and subjective'' because U.S. 
regulators apparently are free to interpret and apply foreign law as 
they see fit.\27\
---------------------------------------------------------------------------
    \26\ Grayned, 408 U.S. at 108 (citations omitted).
    \27\ See generally Morales, 527 U.S. at 41 (striking down an 
ordinance providing absolute discretion to police officers to determine 
prohibited ``loitering'').
---------------------------------------------------------------------------
    The government's refusal to set ``clear rules of the road'' is 
equally troubling. First, as the Supreme Court held almost a century 
ago, ``a statute which either forbids or requires the doing of an act 
in terms so vague that men of common intelligence must necessarily 
guess at its meaning and differ as to its application, violates the 
first essential of due process of law.''\28\ A legal regime that 
requires citizens to guess about compliance, at the risk of their 
liberty and property, cannot be justified. Second, the government's 
refusal to provide compliance standards has hampered both Lacey Act 
compliance and enforcement.
---------------------------------------------------------------------------
    \28\ Connally v. General Constr. Co., 269 U.S. 385, 391 (1925).
---------------------------------------------------------------------------
C. The Lacey Act Is An Exemplar Of Over-Criminalization.
    The Lacey Act is an exemplar of ``over-criminalization.'' Over-
criminalization results when Congressional enactments expand criminal 
liability through strict liability offenses that dispense with culpable 
mental states; vicarious liability for the acts of others without some 
evidence of personal advertence; grossly disproportionate penalties 
that bear no relation to the wrongfulness of the underlying crime, the 
harmfulness of its commission, or the blameworthiness of the criminal; 
and the broad delegation of criminal enforcement authority to 
bureaucrats. Such enactments corrode individual civil liberties.\29\
---------------------------------------------------------------------------
    \29\ See Luna, The Overcriminalization Phenomenon, 54 American 
Univ. L. Rev. 703, 715 (2005).
---------------------------------------------------------------------------
    The Lacey Act does all of these things. It holds Americans 
vicariously liable for the violation of even the most technical foreign 
law, rule or local ordinance without evidence of personal advertence or 
intent. It penalizes without relation to the harm done by the 
``violator'' to fish, wildlife or plant populations. It criminalizes 
obscure foreign requirements, including civil customs, transportation, 
and packaging rules and even local tax or royalty ordinances, and then 
delegates unlimited prosecutorial power to federal regulators. 
Perversely, the Lacey Act unleashes the coercive power of the federal 
government not against the corrupt and lawless foreign individuals, 
companies and governments that allow, encourage or conduct poaching, 
clear-cutting and environmental degradation, but rather against 
Americans who are innocent of wrong-doing, by any reasonable measure.
D. The Lacey Act's Structural Flaws Lead To Absurd And Unjust Results.
    Through the Lacey Act, Congress requires Americans to know and then 
``properly'' interpret the regulatory minutiae of fishery, wildlife and 
forest management, tax, customs, logging, commercial and real property 
``law'' in places like Egypt, Indonesia, Vietnam, Peru and China.\30\ 
Congress also now requires our citizens to ``verify'' that foreign 
actors in a supply chain that may span countries rife with legal 
inefficiency, imprecision and corruption appropriately ``comply'' with 
all of these laws.\31\ Finally, Congress's failure to cabin regulatory 
discretion has empowered U.S. regulators to ``Monday Morning 
Quarterback'' good faith interpretative and verification efforts, and 
then to raid and prosecute anyone whom the government decides has 
failed to measure up. This leads to absurd results.
---------------------------------------------------------------------------
    \30\ According to the government, ``It is the responsibility of the 
importer to be aware of any foreign laws that may pertain to their 
merchandise prior to its importation into the United States.'' See 
Animal & Plant Health Inspection Serv., U.S. Dep't of Agric., Lacey Act 
Amendments: Complete List of Questions and Answers 2 (Feb. 16, 2012) 
available at 
http://www.aphis.usda.gov/plant_health/lacey_act/downloads/faq.pdf 
(accessed July 14, 2013) (emphasis added).
    \31\ See 42 Rutgers L. J. at 572 (citations omitted); see also 
Juszkiewicz, supra at note 8 (``The U.S. should also use the power of 
the marketplace to encourage sustainable harvesting practices in 
countries whose forestry systems are rife with graft and corruption'') 
(emphasis added).
---------------------------------------------------------------------------
    On August 24, 2011, Gibson Guitar factories in Nashville and 
Memphis were raided by armed agents from the Department of Homeland 
Security and the U.S. Fish & Wildlife Service. The company was not 
accused of importing banned wood.\32\ Rather, the raid apparently 
occurred because Gibson ran afoul of a technical Indian regulation 
governing the export of finished wood products, which was designed to 
protect Indian woodworkers from foreign competition.\33\ To make 
matters worse, although the Indian government certified that the wood 
was properly and legally exported, the regulators substituted their own 
opinion to support their claims of a Lacey Act violation.\34\
---------------------------------------------------------------------------
    \32\ See Affidavit of Special Agent John M. Rayfield in support of 
Search Warrant 11-MJ-1067 A, B, C, D at para.para. 15-18 (Aug. 18, 
2011) available at http://www.scribd.com/srcohiba/d/63869457-US-
Government-s-Affidavit-in-Support-of-Search-Warrant-at-Gibson-Guitar-
Factory (accessed May 4, 2012).
    \33\ Juszkiewicz, supra at note 8.
    \34\ Apparently, Gibson was advised by the U.S. government that if 
it finished its guitar fingerboards using Indian labor rather than 
Tennessee craftsman, the Lacey Act issue would not exist. Id.
---------------------------------------------------------------------------
    On July 27, 2012, Gibson and the government settled all of their 
outstanding Lacey Act matters.\35\ Notably, the focus of the settlement 
agreement was on Gibson's alleged failure to conduct sufficient due 
diligence with respect to the purchase of wood originating in 
Madagascar. As to the Indian ebony and rosewood that led government 
agents to conduct an armed raid:
---------------------------------------------------------------------------
    \35\ Letter from Jerry E. Martin to Donald A. Carr dated July 27, 
2012 available at http://www2.gibson.com/News-Lifestyle/Features/en-us/
Gibson-Comments-on-Department-of-Justice-Settlemen.aspx (accessed July 
14, 2013).
---------------------------------------------------------------------------
    The Government and Gibson . . . agree that certain questions and 
inconsistencies now exist regarding the tariff classification of ebony 
and rosewood fingerboard blanks . . . Accordingly, the Government will 
not undertake enforcement actions related to Gibson's future orders . . 
. or imports of ebony and rosewood . . . from India, unless and until 
the Government of India provides specific clarification that ebony and 
rosewood fingerboard blanks are express prohibited by laws related to 
Indian Foreign Trade Policy.\36\
---------------------------------------------------------------------------
    \36\ Id. at 3.
---------------------------------------------------------------------------
    Oddly, this final disposition of Gibson's Indian ebony and rosewood 
was not mentioned in the government's celebratory press release 
announcing the settlement.\37\
---------------------------------------------------------------------------
    \37\ U.S. Dep't of Justice Office of Public Affairs, ``Gibson 
Guitar Corp. Agrees to Resolve Investigation into Lacey Act 
Violations'' (Aug. 6, 2012) available at http://www.justice.gov/opa/pr/
2012/August/12-enrd-976.html (accessed July 9, 2013).
---------------------------------------------------------------------------
E. The ``Contraband'' Problem Should Be Corrected.
    In 2008, Congress amended Lacey by adding 16 U.S.C. Sec. 3374(d). 
This section states that Lacey Act forfeitures of fish, wildlife or 
plants are subject to CAFRA,\38\ which states (in relevant part) that 
an innocent owner's interest in property shall not be forfeited under 
any civil forfeiture statute.\39\ Congress enacted Sec. 3374(d) to 
address compliance problems caused by the 2008 liability expansion \40\ 
and to cure a Ninth Circuit ruling holding that all fish, wildlife or 
plants seized under the Lacey Act are ``contraband'' to which CAFRA's 
innocent owner defense does not apply.\41\
---------------------------------------------------------------------------
    \38\ 18 U.S.C. Sec. 981 et seq. In 2000, Congress enacted CAFRA and 
created the ``innocent owner'' affirmative defense to cure the 
government's ``abuses of fundamental fairness'' and to ensure that 
property owners obtain adequate due process in civil forfeiture cases. 
See generally Moores, Reforming The Civil Asset Forfeiture Reform Act, 
51 Ariz. L. Rev. 777, 782-83 (2009) (citations omitted).
    \39\ 18 U.S.C. Sec. 983(d)(1). Sections 983(d)(2) and (3) set the 
criteria for proof of innocence.
    \40\ As the House Report on H.R. 1497 (subsequently enacted as 
Sec. 8204 of the Food, Conservation and Energy Act of 2008, Pub. L. 
110-246) states: Under Lacey, the entire supply chain handling imported 
plant material is held responsible for illegal acts of which they would 
have no reasonable expectation to know the violation much less know the 
underlying laws that exist in all foreign countries. Amending the Lacey 
Act to include reaffirmation of CAFRA provides important forfeiture 
liability protection for ``innocent owners''. . . . Recent case law had 
effectively exempted Lacey Act forfeitures from the ``innocent owner'' 
defense . . . [so] the specificity of language in H.R. 1497 and 
specific reference to CAFRA subsequent to the [Blue King Crab] case are 
intended to clearly show that it is Congress' intent to provide 
``innocent owner'' [sic] in forfeiture proceedings under the Lacey Act. 
House Rep. 110-882, at 20-21; see also 42 Rutgers L. Rev. at 576-78 
(discussing the ``missing'' innocent owner exception)(citations 
omitted).
    \41\ 18 U.S.C. Sec. 983(d)(4) states ``Notwithstanding any 
provision of this subsection, no person may assert an ownership 
interest under this subsection in contraband or other property that it 
is illegal to possess.'' The Ninth Circuit ruled that all property 
seized under Lacey was by definition ``illegal to possess'' and that 
the innocent owner affirmative defense to forfeiture therefore should 
be stricken. Blue King Crab, 410 F.3d at 1135-36.
---------------------------------------------------------------------------
    The government denies that Lacey Act seizures are subject to 
CAFRA.\42\ This is puzzling, because to do this the government renders 
Sec. 3374(d) superfluous.\43\ Furthermore, there is no evidence that 
punishing objectively blameless persons who act with due care better 
protects fish, wildlife and plants. In a case where an importer 
reasonably cannot have knowledge of illegality, the government's 
position directly counters fundamental U.S. legal norms, Sec. 3374(d) 
and CAFRA itself.\44\
---------------------------------------------------------------------------
    \42\ See Hettenbach, supra at note 5 citing United States v. 
1866.75 Board Feet and 11 Doors, More or Less., 587 F.Supp.2d 740 (E.D. 
Va. 2008)(no innocent owner defense to forfeiture).
    \43\ The government's position contradicts the basic canon of 
statutory interpretation that Congress does not enact superfluous 
provisions. See, e.g., Bailey v. United States, 516 U.S. 137, 146 
(1995) (citations omitted).
    \44\ 42 Rutgers L. Rev. at 578 (citations omitted); 51 Ariz. L. 
Rev. 782-83 (citations omitted).
---------------------------------------------------------------------------
F. Lacey Act Performance Metrics Are Needed.
    Although there is ample evidence that implementation of the 2008 
Lacey Act amendments has proven to be expensive and unwieldy and 
ineffective, there is no evidence that the amendments have actually 
reduced the illegal logging rate. As a recent Congressional Research 
Service Report points out, although five years have passed since 
Congress enacted the 2008 Lacey Act amendments, the USDA still cannot 
provide specific cost figures for the new requirements on legal plant 
imports or ``determine whether the Act has led to a reduction in the 
level of illegal logging and trafficking.''\45\ Without appropriate 
performance metrics, Congress cannot evaluate the wisdom of the 2008 
Lacey Act amendments or oversee the conduct of the agencies and 
bureaucrats it has empowered.
---------------------------------------------------------------------------
    \45\ See supra notes 7, 9-11.
---------------------------------------------------------------------------
IV. CONCLUSION.
    The Lacey Act's fish, wildlife and plant conservation goals deserve 
strong Congressional support. Nevertheless, Lacey Act reform is needed 
and ILR urges Congress to move forward with this important work.\46\ 
Specifically:
---------------------------------------------------------------------------
    \46\ Bipartisan actions in the 112th Congress, including the FOCUS 
Act (H.R. 4171) and the RELIEF Act (H.R. 3210) suggest that the time is 
right for reform. The FOCUS Act addressed over-criminalization and due 
process problems by striking the foreign law references and criminal 
sanctions while retaining the ``due care'' standard for civil liability 
and potential forfeiture. The RELIEF Act resolved the ``contraband'' 
issue by ensuring CAFRA protection for innocent owners.

      Congress needs to take a hard look and determine whether 
the Lacey Act: (1) has an appropriate mens rea requirement as a 
threshold matter; (2) adequately defines both the actus reus (guilty 
act) and the mens rea of the offense in specific and unambiguous terms; 
(3) clearly states whether the mens rea requirement applies to all the 
elements of the offense or, if not, which mens rea terms apply to which 
elements of the offense; (4) sets proper limits on enforcement 
discretion; and (5) incorporates the performance metrics required for 
meaningful oversight.
      Congress needs to correct the Lacey Act's unduly broad 
incorporation of foreign law, perhaps by specifically defining those 
foreign laws that are jeopardy ``triggers.'' It should also clarify the 
``due care'' defense so that Americans have fair notice of prohibited 
conduct. U.S. courts, enforcement agencies and citizens all would 
benefit from clear ``rules of the road.''\47\ In any event, the 
Constitution and our legal traditions demand nothing less.
---------------------------------------------------------------------------
    \47\ See Juszkiewicz, supra at note 8. Gibson CEO Juszkiewicz 
suggests that limited government enforcement dollars are likely better 
devoted to fighting illegal logging and poaching by bad actors and not 
to fights with American companies that try hard to comply with the law. 
Therefore, he advocates creating a compliance system that allows 
businesses to know before they buy wood and other plant products 
whether or not they are in compliance. Id.
---------------------------------------------------------------------------
      Congress should address the ``contraband'' issue by 
ensuring that CAFRA-defined ``innocent owners'' are not subject to 
Lacey Act forfeiture.

    We thank you for your attention to this important matter and look 
forward to working with you.
                                 ______
                                 
    Dr. Fleming. Thank you, Mr. Rubinstein.
    Next, Mr. Larkin. You are recognized for 5 minutes.

                STATEMENT OF PAUL J. LARKIN, JR.

    Mr. Larkin. Thank you, Mr. Chairman. Thank you, Mr. Ranking 
Member. My name is Paul Larkin. I am a senior legal fellow at 
the Heritage Foundation. I want to thank you for the 
opportunity to testify today. The views I express are my own, 
and should not be taken as the views of the Heritage 
Foundation.
    In my opinion, the Lacey Act unreasonably demands that a 
person who imports flora or fauna from a foreign nation, must 
know, on pain of criminal liability, every law of every foreign 
country in whatever form that law may take, however obscure 
that law may be, and whatever language that law may be written. 
That requirement is unreasonable, as a matter of criminal 
justice policy, and unconstitutional, as a matter of 
constitutional law.
    The Lacey Act makes an essential element of a domestic 
Federal crime a blank space that each and every foreign nation 
can fill in as it sees fit. The Act does not identify any 
specific laws that trigger criminal liability. The Act does not 
limit the type of foreign laws that can trigger criminal 
liability. The Act does not identify any elements that those 
laws must contain, even though requirements of an act and an 
intent are historic requirements in Anglo-American criminal 
law.
    In fact, the Lacey Act does not even require that a foreign 
law be written in English. The Lacey Act does not restrict in 
any manner a foreign government's power to select as law 
whatever constitutional provisions, statutes, regulations, 
judicial decisions, interpretive documents, or other legal 
edicts it sees fit to choose. A foreign nation may also 
delegate that law-making power to any body it chooses within or 
outside of its own government. In sum, each foreign nation may 
define the law however it wishes, and every foreign nation has 
the same law-making power.
    Consider the difficulties that someone would have in trying 
to comply with foreign law on pain of criminal liability. Some 
foreign laws may have English translations. Some will not. Some 
foreign statutes may be codified in the same manner as the 
United States Code. Some will not. Some foreign regulations may 
be collected into their equivalent of our code of Federal 
regulations. Some will not. Some foreign officials will make 
their legal interpretations and decisions public and in 
English. Some will not.
    Foreign nations may also have very different allocations of 
governmental power. Some countries will have one entity, and 
not necessarily a court, that can speak authoritatively about 
its own laws. Some will not. And different components of 
foreign nations may alter their interpretations of their own 
laws over time, perhaps nullifying the effect of prior 
interpretations, and perhaps not.
    In sum, the Lacey Act's standard list dynamic, open-ended 
incorporation of foreign law effectively delegates law-making 
authority to foreign officials who are neither legally nor 
politically accountable for their actions to any supervisory 
Federal official or to the public. Those features of the Act 
make it a singularly unsound and unconstitutional example of 
Federal criminal legislation.
    There are at least four policy solutions to deal with these 
problems. The first is to eliminate domestic criminal liability 
for violation of a foreign law.
    A second is to require that the government prove that a 
person acted willfully. The Supreme Court has made clear that 
the term ``willful'' requires an intentional violation of a 
known legal duty. That is the interpretation the court has 
given to the tax laws. Using that term in the Lacey Act would 
carry through the Supreme Court's decisions in the Federal 
income tax laws.
    Third, authorize a defendant to raise a mistake-of-law 
defense. The common law has never recognized the defense, but 
that is because the common law dealt with crimes that mirrored 
the contemporary moral code. That is no longer the case, 
certainly not the case once you take into account regulatory 
violations not only of our own domestic laws, but of foreign 
lands.
    Finally, require that every foreign law that could give 
rise to criminal liability be identified and updated as 
necessary. The Congress could take that task on itself, or the 
Congress could assign that responsibility to an executive 
branch agency, such as the Justice Department. That would allow 
the public at least to find the laws, and to have some 
opportunity to at least read the laws before they show up in an 
indictment.
    Thank you for your time; I am glad to answer any questions 
you may have.
    [The prepared statement of Mr. Larkin follows:]

                    Statement of Paul J. Larkin, Jr.

    Mr. Chairman, Mr. Ranking Member, Members of the Subcommittee:
    My name is Paul J. Larkin, Jr. I am a Senior Legal Research Fellow 
at The Heritage Foundation. The views I express in this testimony are 
my own and should not be construed as representing any official 
position of The Heritage Foundation.
    Thank you for the opportunity to testify about the criminal 
enforcement provisions of the Lacey Act. In my opinion, the Act 
unreasonably demands that a person who imports flora or fauna from a 
foreign nation know every law of every foreign country--in whatever 
form that law may take, in whatever language that law may be written, 
however obscure that law may be--on pain of criminal liability. That 
requirement is unreasonable as a matter of criminal justice policy and 
impermissible as a matter of constitutional law.
I. The Lacey Act Unreasonably Requires Parties to Know Foreign Law on 
        Pain of Criminal Liability
    The reach of the Lacey Act is remarkably broad. The act refers 
simply to conduct done in violation of foreign ``law.'' The act does 
not limit the particular foreign laws that can trigger domestic 
criminal liability, specify what elements those laws must contain in 
order to justify criminal punishment, or even identify what category of 
actions is necessary and sufficient to constitute the criminal acts and 
intent historically deemed necessary to define illegal conduct. The 
Lacey Act also does not restrict in any manner a foreign government's 
power to select the constitutional provisions, statutes, regulations, 
judicial decisions, interpretive documents, or other legal edicts 
creating the relevant ``law'' that serves as a predicate for a federal 
crime. Furthermore, there is no limitation on the foreign nations whose 
laws are incorporated into domestic law. Countries with a civil law 
background count just as much as nations, like Great Britain, from 
whence our common law arose. Finally, there is not even a requirement 
that the foreign law, in whatever land and in whatever form it appears, 
be written in English; the Lacey Act embraces laws written in a foreign 
language. A foreign nation may define that ``law'' however it wishes 
and may vest definitional power in any body it chooses, either within 
or outside of the government.\1\
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    \1\ See 16 U.S.C. Sec. 3372(a)(2)(A) & (B)(i)-(iii) (2006) (``It is 
unlawful for any person * * * to import, export, transport, sell, 
receive, acquire, or purchase in interstate or foreign commerce (a) any 
fish or wildlife taken, possessed, transported, or sold * * * in 
violation of any foreign law; (b) any plant * * * (i) taken, possessed, 
transported, or sold in violation of any law or regulation of * * * any 
foreign law, that protects plants or that regulates--(I) the theft of 
plants; (II) the taking of plants from a park, forest reserve, or other 
officially protected area; (III) the taking of plants from an 
officially designated area; or (IV) the taking of plants without, or 
contrary to, required authorization; (ii) taken, possessed, 
transported, or sold without the payment of appropriate royalties, 
taxes, or stumpage fees required for the plant by any law or regulation 
of any State or any foreign law; or (iii) taken, possessed, 
transported, or sold in violation of any limitation * * * under any 
foreign law, governing the export or transshipment of plants * * *.''). 
The federal courts have construed the act to include not merely foreign 
statutes, but also other forms of law, even ones that impose only civil 
sanctions. See, e.g., United States v. McNabb, 331 F.3d 1228, 1239 
(11th Cir. 2003) (``Regulations and other such legally binding 
provisions that foreign governments may promulgate to protect wildlife 
are encompassed by the phrase `any foreign law' in the Lacey Act.''); 
United States v. Mitchell, 985 F.2d 1275, 1280-83 (4th Cir. 1993) 
(Pakistani government orders); United States v. One Afghan . . . 
Mounted Sheep, 964 F.2d 474 (5th Cir. 1992) (same); United States v. 
Lee, 937 F.2d 1388, 1391-92 (9th Cir. 1991) (foreign regulations); 
United States v. 594,464 Pounds of Salmon, 871 F.2d 824, 825 & n.2, 
828-29 (9th Cir. 1989) (a Taiwanese board's ``announcement'' that was 
not technically a ``regulation'' and imposed only a civil penalty).
---------------------------------------------------------------------------
A. The Due Process Clause Requires that the Criminal Law Be Readily 
        Understandable by the Average Person
    The criminal law seeks to reconcile two ancient propositions.\2\ 
One is that everyone is presumed to know the criminal law.\3\ That 
proposition makes sense for so-called ``street crimes,'' because 
everyone knows that it is unlawful to murder, rob, rape, or swindle 
others. That proposition, however, no longer makes sense as a general 
rule, given the size of contemporary federal and state criminal codes. 
The other proposition is that the average person must be able to find, 
read, and understand the criminal law.\4\ Accessibility and clarity are 
not just matters of good criminal justice policy; they are 
constitutional commands.
---------------------------------------------------------------------------
    \2\ See Edwin Meese III & Paul J. Larkin, Jr., Reconsidering the 
Mistake of Law Defense, 102 J. Crim. L. & Criminology 725 (2012).
    \3\ See, e.g., Barlow v. United States, 32 U.S. (7 Pet.) 404, 411 
(1833) (``It is a common maxim, familiar to all minds, that ignorance 
of the law will not excuse any person, either civilly or criminally * * 
*.''); Oliver Wendell Holmes, The Common Law 40-41 (1881) (Reprint 
2009); Wayne R. LaFave, Criminal Law Sec. 5.6, at 305-18 (5th ed. 
2010).
    \4\ See, e.g., FCC v. Fox Television Stations, Inc., 132 S. Ct. 
2307, 2317 (2012) (collecting cases); Anthony G. Amsterdam, Note, The 
Void-for-Vagueness Doctrine in the Supreme Court, 109 U. Pa. L. Rev. 67 
(1960) (discussing the historical development of the void-for-vagueness 
doctrine).
---------------------------------------------------------------------------
    One of the most elementary requirements of criminal and 
constitutional law is that the government must offer the public 
adequate notice of what the law forbids before a person can be held 
liable for violating a criminal statute.\5\ The Latin phrases ``Nullum 
crimen sine lege'' (``There is no crime absent a written law.'') and 
``Nulla poena sine lege'' (``There is no penalty absent a written 
law.'') stand for the settled propositions that there can be no crime 
or criminal punishment without a positive law, which means that no one 
can be punished for doing something that was not prohibited by law at 
the time that he or she acted.\6\ Moreover, unlike the laws of 
Caligula, which were published in a location making them 
inaccessible,\7\ criminal laws must be available to the public so that 
they can be found and read.\8\ Finally, a statute that is unduly vague, 
so indefinite that the average person is forced to guess at its 
meaning, cannot serve as the basis for a criminal charge. The ``void-
for-vagueness'' doctrine, embodied in the Fifth Amendment Due Process 
Clause, enforces the principal that no one may be held liable under a 
criminal law that the average person cannot understand.\9\ Those 
principles are essential to the very concept of ``law'' and are 
enshrined in what we know as ``due process of law.''
---------------------------------------------------------------------------
    \5\ See, e.g., Rogers v. Tennessee, 532 U.S. 451, 459 (2001) 
(``core due process concepts of notice, foreseeability, and, in 
particular, the right to fair warning as those concepts bear on the 
constitutionality of attaching criminal penalties to what previously 
had been innocent conduct'') (emphasis deleted).
    \6\ See Jerome Hall, Nulla Poena Sine Lege, 47 Yale L.J. 165, 165, 
178 (1937).
    \7\ See Screws v. United States, 325 U.S. 91, 96 (1945) (plurality 
opinion) (``To enforce such a [vague] statute would be like sanctioning 
the practice of Caligula, who `published the law, but it was written in 
a very small hand, and posted up in a corner, so that no one could make 
a copy of it.'''); Livingston Hall & Selig J. Seligman, Mistake of Law 
and Mens Rea, 8 U. Chi. L. Rev. 641, 650 n.39 (1940) (``[W]here the law 
was not available to the community, the principle of `nulla poena sine 
lege' comes into play.'').
    \8\ That rule does not rest on the fiction that people will read 
the penal code before acting. Instead, the law requires that, were 
someone to make that effort, the criminal statutes must be written with 
sufficient clarity that a reader could understand them. See McBoyle v. 
United States, 283 U.S. 25, 27 (1931).
    \9\ See Meese & Larkin, supra note 2, at 760-61.
---------------------------------------------------------------------------
    The void-for-vagueness doctrine is particularly relevant to the 
Lacey Act. The Supreme Court has made it clear that ``[n]o one may be 
required at peril of life, liberty or property to speculate as to the 
meaning of penal statutes. All are entitled to be informed as to what 
the State commands or forbids.''\10\ The Court also has devised a 
minimum standard of clarity. ``The constitutional requirement of 
definiteness is violated by a criminal statute that fails to give a 
person of ordinary intelligence fair notice that his contemplated 
conduct is forbidden by the statute.''\11\ Accordingly, ``a statute 
which either forbids or requires the doing of an act in terms so vague 
that men of common intelligence must necessarily guess at its meaning 
and differ as to its application violates the first essential of due 
process of law.''\12\ Note the terms that the Court used to describe 
who must be able to understand what a criminal statute means: ``all,'' 
``men of common intelligence,'' and ``a person of ordinary 
intelligence''--not lawyers, law professors, or judges.
---------------------------------------------------------------------------
    \10\ Lanzetta v. New Jersey, 306 U.S. 451, 453 (1939) (footnote 
omitted).
    \11\ United States v. Harriss, 347 U.S. 612, 617 (1954).
    \12\ Connally v. Gen. Constr. Co., 269 U.S. 385, 391 (1926).
---------------------------------------------------------------------------
    All that is settled law. What is controversial, however, is whether 
the two propositions that I mentioned at the outset can be reconciled 
when criminal liability rests on a violation of foreign law. In my 
opinion, they cannot.
B. It is Unreasonable to Require Parties to Know Foreign Law
    Courts and commentators have justified the presumption that 
everyone knows the criminal law on several grounds. One is the 
proposition that everyone knows the laws in the locale in which he or 
she resides.\13\ Another rationale is the fear that a contrary rule 
would eviscerate the ability of the law to police the public's 
conduct.\14\ Those defenses made sense at common law, because the few 
criminal laws that existed at the time reflected contemporary mores, 
and violations were recognized as morally blameworthy.\15\ Today, 
however, the proposition that everyone knows the law is not just a 
fiction \16\ or a ``legal cliche''\17\; it is an absurdity. The 
criminal law no longer merely expresses societal condemnation of 
inherently nefarious acts that everyone knows are wrong (e.g., murder), 
so-called malum in se offenses. It also regulates the conduct of 
individuals by making it a crime to commit a variety of acts that are 
unlawful only because Congress has said so, crimes known as malum 
prohibitum offenses.\18\ For more than a century, legislatures have 
used the criminal law to enforce regulatory regimes.\19\ That is part 
of the explanation why there are more than 4,500 federal criminal 
statutes.\20\ Many recent federal statutes create regulatory regimes 
and use the criminal law to implement those programs,\21\ and there 
could be more than 300,000 relevant regulations.\22\
---------------------------------------------------------------------------
    \13\ See, e.g., Cheek v. United States, 498 U.S. 192, 199 (1991) 
(the rule that ignorance of the law is no defense is ``[b]ased on the 
notion that the law is definite and knowable'').
    \14\ See, e.g., Holmes, supra note 3, at 41.
    \15\ See Hall & Seligman, supra note 7, at 644 (``[T]he early 
criminal law appears to have been well integrated with the mores of the 
time, out of which it arose as `custom.' ''); John Salmond, 
Jurisprudence 426 (8th ed. 1930) (``The common law is in great part 
nothing more than common honesty and common sense. Therefore although a 
man may be ignorant that he is breaking the law, he knows very well in 
most cases that he is breaking the rule of right.'').
    \16\ Jerome Hall, Ignorance and Mistake in Criminal Law, 33 Ind. L. 
Rev. 1, 14 (1957).
    \17\ Flores-Figueroa v. United States, 556 U.S. 646, 652 (2009).
    \18\ See LaFave, supra note 3, Sec. 1.3(f), at 14-15 (defining 
malum in se and malum prohibitum offenses).
    \19\ See Gerald E. Lynch, The Role of Criminal Law in Policing 
Corporate Misconduct, 60 Law & Contemp. Probs. 23, 37 (1997) 
(``Legislatures, concerned about the perceived weakness of 
administrative regimes, have put criminal sanctions behind 
administrative regulations governing everything from interstate 
trucking to the distribution of food stamps to the regulation of the 
environment.''); see also, e.g., Lawrence M. Friedman, Crime and 
Punishment in American History 282-83 (1993); Graham Hughes, Criminal 
Omissions, 67 Yale L.J. 590, 595 (1958); Sanford Kadish, Some 
Observations on the Use of Criminal Sanctions in the Enforcement of 
Economic Regulations, 30 U. Chi. L. Rev. 423, 424-25 (1963); Francis 
Bowles Sayre, Public Welfare Offenses, 33 Colum. L. Rev. 55, 63-67 
(1933).
    \20\ See, e.g., John Baker, Jr., Heritage Found. Legal Memorandum 
No. 26, Revisiting the Explosive Growth of Federal Crimes (June 16, 
2008), available at http://www.heritage.org/research/reports/2008/06/
revisiting-the-explosive-growth-of-federal-crimes.
    \21\ See Meese & Larkin, supra note 2, at 739-44.
    \22\ One Nation, Under Arrest xv-xvi (Paul Rosenzweig ed., 2d ed. 
2013).
---------------------------------------------------------------------------
    Given this reality, it is dishonest to presume that anyone, much 
less everyone, knows everything that the federal penal code outlaws 
today. The Lacey Act exacerbates the notice problem by making it a 
crime to violate a foreign law, whether that foreign law is criminal, 
civil, or regulatory. That requirement makes unreasonable demands of 
the average person. If the average person cannot keep track of 
regulatory offenses defined by American law, they certainly cannot keep 
track of regulatory offenses defined by hundreds of foreign nations. 
Not even lawyers have that knowledge. In fact, as the distinguished 
academic and late Harvard Law School professor William Stuntz put it: 
``Ordinary people do not have the time or training to learn the 
contents of criminal codes; indeed, even criminal law professors rarely 
know much about what conduct is and isn't criminal in their 
jurisdictions.''\23\
---------------------------------------------------------------------------
    \23\ William J. Stuntz, Self-Defeating Crimes, 86 Va. L. Rev. 1871, 
1871 (2000); see also, e.g., Glenn Harlan Reynolds, Ham Sandwich 
Nation: Due Process When Everything Is a Crime, 113 Colum. L. Rev. 
Sidebar 102 (2013) (``[A]ny reasonable observer would have to conclude 
that actual knowledge of all applicable criminal laws and regulations 
is impossible, especially when those regulations frequently depart from 
any intuitive sense of what `ought' to be legal or illegal. Perhaps 
placing citizens at risk in this regard constitutes a due process 
violation; expecting people to do (or know) the impossible certainly 
sounds like one.'').
---------------------------------------------------------------------------
    Most people learn the criminal code through an informal process. 
Religious precepts, morals, customs, traditions, and laws are the glue 
that holds society together and keep it from becoming the war of all 
against all. We learn them from family members, friends, schoolmates, 
co-workers, the news media, and others, at home, church, school, work, 
and play. Not surprisingly, what people learn in this nation are the 
rules, policies, and mores of this nation. Just as the French, 
Argentineans, Laotians, and Senegalese learn the rules demanded of them 
in their own countries, in this country what children, adolescents, and 
adults learn are the laws and mores of America.
    There is no empirical basis for assuming that Americans will know 
not only all domestic criminal, civil, and regulatory laws, policies, 
and customs, but also the laws, policies, and customs in a foreign 
land. Yes, Americans will know that it is illegal to murder, rape, rob, 
burgle, and swindle foreign citizens, but few, if any, will be 
conversant with the intricacies of a foreign nation's regulatory code. 
The Lacey Act, however, imposes criminal liability for violations of 
such laws.
    Laws come in all forms (e.g., statutes vs. regulations); in all 
shapes and sizes (e.g., the Sherman Act vs. the Clean Air Act); and in 
all degrees of comprehensibility (e.g., the law of homicide vs. the 
Resource Conservation and Recovery Act). Different bodies have 
authority to create laws (e.g., legislatures vs. agencies); to 
interpret them (e.g., the President or an agency's general counsel); 
and to enforce them (e.g., city, state, and federal law enforcement 
officers and prosecutors). And that is just in America. Including the 
laws of nearly 200 foreign nations just makes a bad situation worse.
    That is not all. There are additional difficulties that an American 
must confront in complying with foreign regulatory law. Some foreign 
laws may have English translations; some will not. Some foreign 
statutes may be codified in the same manner as the United States Code; 
some will not. Some foreign regulations may be collected into their 
equivalent of our Code of Federal Regulations; some will not. Some 
foreign statutes and regulations may have commentary that is publicly 
available in the same manner as our congressional committee reports and 
Federal Register notices; some will not. Some foreign officials and 
judges will make their decisions public and in English; some will not. 
Foreign nations also may have very different allocations of 
governmental power, bureaucracies, and enforcement personnel. Some 
countries will have one entity--and not necessarily a court--that can 
speak authoritatively about its own laws; some will not. And different 
components of foreign nations may alter their interpretations of their 
laws over time, perhaps nullifying the effect of a prior 
interpretation, or perhaps not.
    It is unreasonable to assume that the average American citizen can 
keep track of foreign laws and regulations, as well as the (potentially 
multifarious) official government interpretations of them, let alone do 
so by himself or herself without a supporting cast of lawyers--that is, 
assuming that the average citizen could find or afford a lawyer 
knowledgeable about the intricacies of a particular foreign nation's 
laws. The vast majority of domestic lawyers and judges are not familiar 
with foreign law, let alone qualified as experts.
C. It is Unconstitutional to Hold Parties Criminally Liable for 
        Violating Foreign Law
    In any event, the relevant due process standard is not whether the 
average lawyer knows the criminal law. The Supreme Court has made it 
clear on numerous occasions that the criminal law must be clear not to 
the average lawyer, but to the average person. Even if there were 
lawyers who could readily answer intricate questions of foreign law--
and would be willing to do so for free--the criminal law is held to a 
higher standard. Unless men and women ``of common intelligence'' can 
understand what a law means, that law might as well not exist--and, 
under our Constitution, no one can be convicted for violating it.\24\
---------------------------------------------------------------------------
    \24\ See, e.g., United States v. Harriss, 347 U.S. 612, 617 (1954); 
supra p. 3.
---------------------------------------------------------------------------
    A 2012 paper published by the Union of Concerned Scientists 
identifies some of the problems that men and women ``of common 
intelligence'' must face. That paper stated that foreign nations may 
have ``complex systems for legal timber extraction [that] motivate 
working around them,'' and timber companies ``operate in countries that 
often have conflicting and inconsistent laws * * *.''\25\ Those 
statements are tantamount to a confession that the Lacey Act should 
not--and cannot--be enforced via the criminal law. A person cannot be 
convicted in this country for an alleged violation of ``complex,'' 
``conflicting[,] and inconsistent'' laws in the U.S. Code. If so, there 
is no persuasive reason to hold a person criminally liable for 
violating complex, conflicting, and inconsistent law in a foreign code. 
The Union of Concerned Scientists paper does not explain why Americans 
should be subject to a lower threshold of criminal liability for 
violating a foreign law than a domestic law, and no sound justification 
leaps to mind.
---------------------------------------------------------------------------
    \25\ Patricia Elias, Logging and the Law: How the U.S. Lacey Act 
Helps Reduce Illegal Logging in the Tropics 5 (Apr. 2012), available at 
http://www.ucsusa.org/assets/documents/global_warming/illegal-logging-
and-lacey-act.pdf. In 2008, Congress added plants to the category of 
potentially illegal imports. Acting at the behest of a coalition of 
environmental organizations and the domestic timber industry, Congress 
amended the act as part of a far larger farm policy bill, the Food, 
Conservation, and Energy Act of 2008, Pub. L. No. 110-234, 122 Stat. 
923 (2008), in order to include plants taken or processed and imported 
in violation of a foreign nation's law. See Francis G. Tanzcos Note, A 
New Crime--Possession of Wood: Remedying the Due Care Double Standard 
of the Revised Lacey Act, 42 Rutgers L.J. 549 (2011). The rationale was 
the desire to protect foreign ecosystems and the domestic timber 
industry by targeting an alleged billion-dollar black market in foreign 
logging. See H.R. Rep. No. 110-627, 110th Cong. (2008); Kristina 
Alexander, Cong. Res. Serv., The Lacey Act: Protecting the Environment 
by Restricting Trade 2, 6 (Apr. 12, 2012); Tanzcos, supra, at 549-50 & 
n.4.
---------------------------------------------------------------------------
    The concept that the public should be able to understand the 
criminal law is the moral foundation for the proposition that 
``Ignorance of the law is no excuse.'' Take away the practical ability 
to understand the criminal law and you take away the moral 
justification for using it to punish offenders. Take away the moral 
justification, and you take away the legitimacy of our criminal justice 
system.
    This is not an abstract problem. Consider the case of United States 
v. McNab.\26\ Abner Schoenwetter and several others were convicted of 
several offenses in connection with their importation of Caribbean 
spiny lobsters from Honduras. The federal government charged 
Schoenwetter and the others with violating the Lacey Act by importing 
Honduran lobsters in violation of Honduran law: The lobsters were too 
small to be taken under Honduran law; some contained eggs and so could 
not be exported; and the lobsters were packed in boxes rather than in 
plastic as required by Honduran law. The jury convicted the defendants, 
and both the district court and the U.S. Court of Appeals for the 
Eleventh Circuit upheld the convictions. The district court relied on 
the opinions of officials in the Honduran agriculture department that 
the McNab defendants violated Honduran law. The appellate court, 
however, refused to give any weight to the opinions of a Honduran 
court, the Honduran embassy, and the Honduran Attorney General that the 
regulations in question were invalid under Honduran law and could not 
serve as predicate violations under the Lacey Act. The result was that 
Schoenwetter was sentenced to eight years in a federal prison--a term 
longer than what some violent criminals spend behind bars--for foreign 
regulatory offenses that, according to key Honduran officials, did not 
even violate foreign law. The McNab case illustrates why no one should 
be held accountable under this country's law for violating a foreign 
nation's law
---------------------------------------------------------------------------
    \26\ 331 F.3d 1228 (11th Cir 2003).
---------------------------------------------------------------------------
    The purpose of the criminal law should be to separate evil-minded 
and evil-doing offenders from people who are, at worst, negligent, and, 
at best, morally blameless. In most cases, the law is clear, but the 
facts are in dispute. But if you add complex, conflicting, and 
inconsistent foreign laws into the mix, both the facts and the law are 
in dispute. There is no way to separate the morally blameworthy from 
the morally blameless in a stew like that.\27\
---------------------------------------------------------------------------
    \27\ Some Lacey Act violations are felonies; others, misdemeanors. 
It is no argument that Lacey Act violations are simply misdemeanors and 
therefore do not create a serious risk of long-term imprisonment. 
Individual misdemeanor sentences can add up quickly. The federal 
government can charge each Lacey Act violation as a separate offense, 
and a judge can impose a separate one-year sentence for each 
conviction. Consider a company, like Gibson Guitar, that imports 
dozens, scores, or hundreds of guitar frets made from wood grown 
overseas. The government doubtless could find some foreign law that 
Gibson or an intermediary has violated or some required form that has 
not been properly filled out or filed. The government then could charge 
Gibson Guitar with a separate violation for each guitar fret. Or 
consider a fisherman, like Abner Schoenwetter, who hauls in a net full 
of lobsters. If he takes in 500 lobsters at one time, he exposes 
himself to 500 years' imprisonment per haul.
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II. The Constitution Prohibits the Delegation of Substantive Lawmaking 
        Authority to Foreign Nations
    The Lacey Act makes the operative element of a domestic federal 
crime a blank space that any and every foreign nation can fill in as it 
chooses. As explained above and as illustrated by the McNab case, the 
Lacey Act's delegation of substantive criminal lawmaking authority to a 
foreign government renders the act subject to challenge under the void-
for-vagueness doctrine. That alone is sufficient to condemn the Lacey 
Act on prudential and constitutional grounds.
    But there are three additional, related constitutional problems 
with the Lacey Act delegation. First, the act defines no ``intelligible 
principle'' for a foreign government or a federal court to use in 
deciding what laws should trigger a criminal prosecution, in violation 
of the Article I delegation doctrine. Second, the act delegates federal 
lawmaking power to a party who has not been appointed in compliance 
with the Article II Appointments Clause. And third, the Fifth Amendment 
Due Process Clause forbids delegation of substantive lawmaking power to 
foreign officials. Together, Article I, Article II, and the Due Process 
Clause reveal that Congress cannot delegate standardless, substantive 
lawmaking authority to a party that is neither legally nor politically 
accountable for its actions to supervisory federal officials or to the 
public.
A. The Article I Bicameralism and Presentment Requirements
    The Framers required that, in order to create a ``Law,'' each 
chamber of Congress pass the identical bill and the President must sign 
it (or both houses repass it by a two-thirds vote following a 
veto).\28\ The bicameralism and presentment requirements force the 
Senate, the House of Representatives, and the President to take a 
public position on what they find necessary to regulate society and on 
the conduct that they find it reasonable to outlaw, encourage, support, 
or protect. The requirement that Congress and the President collaborate 
to pass a ``Law'' also enables the electorate to decide whether 
Senators, Representatives, and the President should remain in office or 
be turned out every two, four, or six years. The Article I lawmaking 
procedure therefore not only offers the opportunity for reasoned 
consideration and debate over the merits of proposed legislation, but 
also--and perhaps more importantly--provides voters with a basis for 
holding elected federal officials politically accountable for the 
decisions they make.
---------------------------------------------------------------------------
    \28\ See INS v. Chadha, 462 U.S. 919 (1983); cf. Clinton v. City of 
New York, 542 U.S. 417 (1988) (Article I requires the same process in 
order to repeal or amend an existing law).
---------------------------------------------------------------------------
    At the same time, the Supreme Court has permitted Congress to 
delegate to federal administrative agencies the ability to adopt 
implementing rules and regulations that have the force and effect of 
law. With only two exceptions now almost 80 years old,\29\ the Supreme 
Court has upheld over an Article I challenge every act of Congress 
delegating authority to a federal agency to implement a statute through 
rules.\30\ In each case, the Court upheld the delegation on the ground 
that Congress had identified an ``intelligible principle'' for the 
agency to use in determining how to exercise its delegated but limited 
authority.\31\
---------------------------------------------------------------------------
    \29\ See A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 
495 (1935); Panama Refining Co. v. Ryan, 293 U.S. 388 (1935).
    \30\ See, e.g., Whitman v. Am. Trucking Ass'ns, 531 U.S. 457 
(2001); Mistretta v. United States, 489 U.S. 361 (1989); Yakus v. 
United States, 321 U.S. 414 (1944); J.W. Hampton, Jr. & Co. v. United 
States, 276 U.S. 394 (1928); United States v. Grimaud, 220 U.S. 506 
(1911); see also INS v. Chadha, 462 U.S. 919, 953 n.16 (1983) 
(distinguishing administrative rulemaking from the Article I lawmaking 
process because agencies ``cannot reach beyond the limits of the 
statute'' creating them'').
    \31\ See, e.g., Whitman, 531 U.S. at 472 (quoting J.W. Hampton, 276 
U.S. at 409).
---------------------------------------------------------------------------
    The Lacey Act, however, contains no principle of any kind limiting 
the ``law'' a foreign nation may adopt that triggers the act. The act 
does not specify what foreign laws trigger criminal liability, does not 
limit a foreign nation's ability to make that decision, does not 
identify any factors that a federal court should consider in deciding 
what is a foreign ``law,'' and does not even say how a federal court 
should go about selecting among conflicting interpretations of foreign 
law offered by different foreign agencies.
    The Lacey Act simply incorporates whatever ``law'' a foreign nation 
has adopted and whatever interpretation that nation may place on its 
``law.''\32\ The act offers ``literally no guidance for the exercise of 
discretion''  cents a foreign nation or a federal court.\33\ Even under 
the most charitable reading of the Supreme Court's cases, the Lacey Act 
violates Article I.
---------------------------------------------------------------------------
    \32\ See Michael C. Dorf, Dynamic Incorporation of Foreign Law, 157 
U. Pa. L. Rev. 103, 105 (2008) (``dynamic incorporation does delegate 
lawmaking authority'').
    \33\ See, e.g., Whitman, 531 U.S. at 474.
---------------------------------------------------------------------------
    Several circuit courts have rejected Article I nondelegation 
challenges to the Lacey Act.\34\ Their rationales for rejecting that 
argument, however, are utterly unpersuasive.
---------------------------------------------------------------------------
    \34\ See, e.g., United States v. Lee, 937 F.2d 1388, 1393-94 (9th 
Cir. 1991); United States v. Rioseco, 845 F.2d 299 (11th Cir. 1988); 
United States v. 594,464 Pounds of Salmon, 871 F.2d 824, 829-30 & n.9 
(9th Cir. 1989); United States v. Molt, 599 F.2d 1217, 1219 n.1 (3d 
Cir. 1979); cf. United States v. Bryant, 716 F.2d 1091, 1094-95 (6th 
Cir. 1983) (rejecting argument that the act impermissibly delegates 
federal lawmaking authority to the states); Rupert v. United States, 
187 F. 87, 90-91 (8th Cir. 1910) (same).
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    The Third Circuit concluded that the Lacey Act treats the violation 
of a foreign law as ``simply a fact entering into the description of 
the contraband article.'' \35\ The text of the Lacey Act, however, 
makes proof that a defendant violated foreign law an essential element 
of an offense by making it a crime to import flora or fauna in 
violation of any foreign law. The most natural reading of the text is 
that a violation of a foreign law is a predicate for a violation of the 
act.
---------------------------------------------------------------------------
    \35\ See United States v. Molt, 599 F.2d 1217, 1219 n.1 (3d Cir. 
1979) (``The Act does not delegate legislative power to foreign 
governments, but simply limits the exclusion from the stream of foreign 
commerce to wildlife unlawfully taken abroad. The illegal taking is 
simply a fact entering into the description of the contraband article * 
* *.'').
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    The Ninth Circuit determined that a foreign law violation is not an 
element of the offense, but is simply a matter for the government to 
consider in its exercise of prosecutorial discretion.\36\ Nothing in 
the text of the Lacey Act, however, remotely hints that the statute is 
designed to identify instances in which the government may or should 
exercise prosecutorial discretion. The term ``discretion'' can be found 
nowhere in the Lacey Act, and for good reason. It has been settled law 
for more than a century that the government enjoys discretion over 
prosecutorial decisions,\37\ so it makes no sense to read the Lacey Act 
as granting or reaffirming that principle.
---------------------------------------------------------------------------
    \36\ See United States v. 594,464 Pounds of Salmon, 871 F.2d 824, 
830 (9th Cir. 1989) (``[T]he Act does not call for the assimilation of 
foreign law into federal law. Rather, the Act merely provides that once 
a violation of a foreign law has occurred, that fact will be taken into 
account by the government official entrusted with enforcement.'').
    \37\ See The Confiscation Cases, 74 U.S. (7 Wall.). 454, 457 
(1868).
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    The Eleventh Circuit held that Congress decided what should be made 
a crime.\38\ But that only begins the analysis. Congress said nothing 
about the type of laws that are incorporated (civil vs. criminal) or 
the form that those laws may take (statutes vs. regulations vs. 
judicial decisions). Congress punted those decisions to foreign 
nations, empowering them to make every decision regarding what ``law'' 
incorporated by the Lacey Act. That is what Article I forbids.
---------------------------------------------------------------------------
    \38\ See United States v. Rioseco, 845 F.2d 299, 302 (11th Cir. 
1988) (citations omitted) (``Congress has made it a United States crime 
to take, to sell, or to transport wildlife taken in violation of any 
foreign law relating to wildlife . . .. Congress, itself, has set out 
the penalties for violation of these Lacey Act provisions . . .. Thus, 
Congress has delegated no power, but has itself set out its policies 
and has implemented them.''); accord United States v. Guthrie, 50 F.3d 
936 (11th Cir. 1995) (following Rioseco).
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B. The Article II Appointments Clause
    The Constitution contemplates that Congress may create executive 
departments and give the officials who staff those offices the power 
necessary to play their roles in a national government.\39\ The Article 
II Appointments Clause is a critical element in the proper operation of 
government because it governs the selection of any person who exercises 
delegated federal authority.\40\ By limiting the parties who may 
appoint federal officials, the Appointments Clause is a structural 
protection against the arbitrary exercise of federal power.\41\ The 
clause guarantees that only parties who have been properly appointed 
and therefore (presumably) properly vetted can exercise such 
authority.\42\ In addition, the clause ensures that any official 
exercising federal power can be removed for misconduct, incompetence, 
or for other reasons.\43\ Finally, the requirement that a specific 
individual be appointed consistently with Article II ensures that there 
always will be a person with authority to make a final agency 
determination that can be challenged in an Article III court.\44\
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    \39\ See, e.g., U.S. Const. art. II, Sec. 2, cl. 1 (the Opinion 
Clause); id. cl. 2 (the Appointments Clause). For instance, Congress 
has the power to create ``Post Offices and postal Roads,'' U.S. Const. 
art. I, Sec. 8, cl. 7, but the Framers did not expect that the 
President would deliver the mail.
    \40\ See, e.g., Buckley v. Valeo, 424 U.S. 1, 126 (1976) (``[A]ny 
appointee exercising significant authority pursuant to the laws of the 
United States is an `Officer of the United States,' and must, 
therefore, be appointed in the manner prescribed by [the Appointments 
Clause].'').
    \41\ See, e.g., Freytag v. Comm'r, 501 U.S. 868, 880 (1991) (``The 
Appointments Clause prevents Congress from dispensing power too freely; 
it limits the universe of eligible recipients of the power to 
appoint.'').
    \42\ See, e.g., Pub. Citizen v. U.S. Dep't of Justice, 491 U.S. 
440, 483-84 & n.4 (1989) (Kennedy, J., concurring) (quoting The 
Federalist No. 76, at 455-56 (A. Hamilton) (Clinton Rossiter, ed., 
1961)).
    \43\ See, e.g., Free Enterprise Fund v. PCAOB, 130 S. Ct. 3138, 
3146-47 (2010).
    \44\ The likely vehicle would be a lawsuit brought under the 
Administrative Procedure Act, 5 U.S.C. Sec. 704 (2006). See, e.g., 
Sackett v. EPA, 132 S. Ct. 1367, 1371-72 (2012).
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    The Lacey Act, however, does not vest lawmaking authority in a 
federal official. Instead, the statute delegates that power to a 
foreign nation. That difference is critical. The Supreme Court's 
decisions rejecting Article I challenges to the delegation of federal 
authority involved a handoff of federal lawmaking power to officials in 
the executive branch who must be appointed to their positions in 
compliance with the Appointments Clause. Article II forbids Congress 
from vesting federal lawmaking power in any person not appointed in 
compliance with that provision. By definition that prohibition applies 
to foreign officials, who are selected in accordance with the laws of 
their own nations, not ours. The Lacey Act effectively hands a portion 
of the federal lawmaking power over to a foreign state that is 
unaccountable to any branch of the federal government or to the 
American public. In so doing the Lacey Act not only disrupts the 
carefully balanced federal scheme for allocating governmental 
authority, but also deprives the electorate of information vital to 
hold members of Congress and the President politically accountable for 
their actions and those of their appointees. As far as Article II of 
the Constitution is concerned, delegating federal government authority 
to a foreign official is not materially different from delegating 
lawmaking authority to a private party. Article II does not permit that 
type of delegation.
C. The Fifth Amendment Due Process Clause
    The Due Process Clause also forbids the delegation of substantive 
lawmaking authority to a private party. The Supreme Court has resolved 
several cases in which a state or the federal government has delegated 
governmental authority of one type or another to just such parties. For 
example in Eubank v. City of Richmond \45\ the municipality passed an 
ordinance, enforceable by a fine, authorizing parties who owned two-
thirds of the property on any street to establish a building line 
barring further house construction past the line and requiring existing 
structures to be modified to conform to that line. The Supreme Court 
ruled that the ordinance violated the Due Process Clause because it 
created no standard for the property owners to use, permitting them to 
act for their self-interest or even arbitrarily.\46\ In two later 
cases--Washington ex rel. Seattle Title Trust Co. v. Roberge,\47\ and 
Carter v. Carter Coal Co.\48\--the Court relied on Eubank in ruling 
that those laws also unconstitutionally delegated standardless 
government authority to private parties.\49\ Eubank, Roberge, and 
Carter Coal therefore stand for the proposition that it is 
impermissible to vest governmental authority in private parties who are 
neither legally nor politically accountable to other government 
officials or to the electorate.
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    \45\ 226 U.S. 137 (1912).
    \46\ Id. at 140-44.
    \47\ 278 U.S. 116 (1928). In Roberge, a trustee of a home for the 
elderly poor sought to obtain a permit to enlarge the facility to allow 
additional parties to reside there. A Seattle zoning ordinance limited 
buildings in the relevant vicinity to single-family homes, public and 
certain private schools, churches, parks, and the like, but empowered 
the city to grant a zoning variance if at least one-half of the nearby 
property owners consented. Id. at 50-51 & n. 1. The city building 
superintendent denied the permit because the adjacent property owners 
had not consented to the variance, and the trustee sued. Relying on 
Eubank, the Court held that, while zoning ordinances are generally 
valid, the Seattle ordinance was unconstitutional as applied in those 
circumstances because it enabled the nearby property owners to deny a 
variance for their own, capricious reasons. Id. at 121-22.
    \48\ 298 U.S. 238 (1936). Carter Coal involved delegation challenge 
to the Bituminous Coal Conservation Act of 1935, ch. 824, 49 Stat. 991 
(1935). The act authorized local coal district boards to adopt a code 
fixing agreed-upon minimum and maximum prices for coal. The act also 
allowed producers of more than two-thirds of the annual tonnage of coal 
and a majority of mine workers to set industry-wide wage and hour 
agreements. Shareholders of other coal producers argued that the act 
unlawfully delegated federal power to private parties. Relying on 
Eubank and Roberge (and A.L.A. Schechter Poultry Co. v. United States, 
295 U.S. 495 (1935), which held invalid a similar delegation of 
authority under the National Industrial Recovery Act, ch. 90, 48 Stat. 
195 (1933)), the Supreme Court held that the act vested federal power 
in the hands of a party interested in the outcome of a business 
transaction. 298 U.S. at 311.
    \49\ See also City of Eastlake v. Forest City Enters., Inc., 426 
U.S. 668 (1976) (noting and distinguishing the Eubank and Roberge cases 
without criticizing them or suggesting that they no longer are good 
law).
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    In other private delegation cases--such as Cusak v. Chicago,\50\ 
New Motor Vehicle Bd. v. Fox Co.,\51\ and Hawaii Housing Auth. v. 
Midkiff \52\--the Supreme Court upheld the vesting of state authority 
in private parties. The laws at issue there, however, left final 
decisionmaking authority in the hands of a state official.\53\ The 
Lacey Act, by contrast, leaves it entirely up to a foreign nation to 
decide what it will deem a ``law.'' The decisions in Cusak, New Motor 
Vehicle Bd., and Midkiff therefore do not justify the delegation that 
the Lacey Act accomplishes.
---------------------------------------------------------------------------
    \50\ 242 U.S. 526 (1917).
    \51\ 439 U.S. 96 (1978).
    \52\ 467 U.S. 229 (1984).
    \53\ In Cusak, a Chicago ordinance prohibited the erection of 
billboards in residential communities without the consent of a majority 
of the residents on both sides of the relevant street. 242 U.S. at 527. 
The Court distinguished Eubank on the ground that the Richmond 
ordinance allowed a majority of local residents to impose a 
restriction, while the Chicago ordinance allowed a majority of local 
residents to lift an otherwise valid prohibition. Id. at 527, 531. New 
Motor rejected a due process delegation challenge to a state law 
directing a state agency to delay vehicle franchise establishments and 
locations when an existing dealer objects. 439 U.S. at 108-09. Relying 
on New Motor, Midkiff rejected the argument that due process prohibits 
a state from allowing private parties to initiate the eminent domain 
condemnation process. 467 U.S. at 243 n.6.
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III. Solutions For Those Problems
    There are some solutions for those problems.\54\
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    \54\ See, e.g., Meese & Larkin, supra note 2, at 738-83; Paul J. 
Larkin, Jr., A Mistake of Law Defense as a Remedy for 
Overcriminalization, 26 A.B.A.J. Criminal Justice 10 (Spring 2013); 
Paul J. Larkin, Jr., ``The Injustice of Imposing Domestic Criminal 
Liability for a Violation of Foreign Law,'' The Heritage Found., Legal 
Memo. No. 94 (June 12, 2013), available at 
http://thf_media.s3.amazonaws.com/2013/pdf/lm94.pdf (last visited June 
13, 2013).
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A. Eliminate Domestic Criminal Liability for a Violation of Foreign Law
    The first, best, and easiest to implement is to eliminate domestic 
criminal liability for a violation of a foreign law. If no one can be 
expected to or should be required to know foreign law, there is no need 
for a criminal statute exposing anyone to that liability. Tort and 
administrative remedies can and should be sufficient remedies.
B. Require the Government to Prove that a Person Acted ``Willfully''
    A second solution is to require the government to prove that the 
defendant acted ``willfully.'' That requirement ensures that the 
criminal law reaches only evil-minded individuals, those who knew what 
foreign law prohibited and who intended to violate it nonetheless.
C. Adopt a Mistake of Law Defense
    A third solution is to apply a mistake of law defense. A mistake of 
law defense would exonerate a person who reasonably believed that what 
he or she did was not a crime. Imposing criminal liability in those 
circumstances would unjustly punish a morally blameless individual.
D. Identify the Foreign Laws
    Finally, Congress could identify and update as necessary the 
specific foreign ``laws'' that trigger criminal liability or could 
direct the Justice Department to do so.
Conclusion
    The question for this hearing is not whether the federal government 
should assist foreign governments enforce their own domestic laws, 
whether logging occurs overseas in violation of some foreign law, or 
whether there are domestic economic benefits or worldwide environmental 
gains from limiting the importation of foreign timber and reducing 
deforestation. The relevant issue is whether it is prudent and 
constitutional for this nation to use the Lacey Act to attempt to 
accomplish those objectives via the criminal process. The answer is 
``No.'' The Lacey Act asks far too much of lawyers, law professors, and 
judges--let alone the average person. The open-ended, dynamic, 
standardless incorporation of foreign law enforced by criminal 
penalties is unsound as a matter of criminal justice policy and 
impermissible as a matter of constitutional law.
                                 ______
                                 
    Dr. Fleming. Thank you, Mr. Larkin.
    And finally, Mr. Kamenar, you are recognized for 5 minutes.

      STATEMENT OF PAUL D. KAMENAR, ESQ., ATTORNEY AT LAW

    Mr. Kamenar. Thank you, Mr. Chairman, Mr. Ranking Member, 
members of the Subcommittee. My name is Paul Kamenar, I am a 
Washington, D.C. lawyer and legal public policy advisor with 
over 35 years experience litigating Federal cases in the 
Supreme Court and lower Federal courts, including criminal 
enforcement of environmental laws.
    As the former Senior Counsel to the Washington Legal 
Foundation, I was counsel in the McNab case for the three 
American citizens who were convicted for violating the Lacey 
Act for importing frozen lobster tails in plastic bags from 
Honduras, and sent to prison for over 8 years. I drafted and 
filed their petition in the Supreme Court, which I would like 
to make available as a copy for the record.
    I am testifying today in my personal capacity, and not on 
behalf of any other person or organization.
    Mr. McNab was a Honduran seafood exporter who shipped the 
frozen lobster tails in transparent plastic bags to seafood 
importers Mr. Blandford and Schoenwetter in the United States, 
where the shipments were subject to inspection and cleared by 
U.S. Customs and the Food and Drug Administration.
    February 1999, the ship was seized, but they were not told 
why it was seized. Over the next 6 months, National Marine 
Fisheries Service agents traveled back and forth to Honduras, 
trying to figure out what Honduran law regulation might have 
been violated. They concluded that three might be involved. 
One, the size regulation limiting the size of lobster tails to 
less than 5.5 inches, or under 4 ounces. Packaging regulations 
said that the seafood must be packed in a cardboard box, 
instead of plastic bags, and an egg-bearing regulation 
prohibited capturing egg-bearing lobster tails.
    Armed with rulers to measure the catch, the Federal agents 
determined that only 3 percent of the catch was undersized, a 
very low percentage that would not be unusual in catching and 
processing 70,000 pounds of lobster tails.
    While the government expected the importers to be aware of 
this regulation, apparently the U.S. Government was not. 
Indeed, in their weekly public posting of all frozen seafood 
prices to the industry, the National Marine Fisheries Service 
listed prices of 2-ounce and 3-ounce lobster tails from 
Honduras in their price list. However, the packaging was such 
that the entire 70,000 pounds was shipped in plastic bags. By 
the way, these lobsters were neither endangered nor threatened. 
And, therefore, the entire shipment became illegal and subject 
to forfeiture. And it was this procedural regulation that 
resulted in the Draconian sentence of 8 years in prison.
    To reiterate, while over 90 percent of the shipment did not 
contain illegal lobsters or contraband, as critics have 
claimed, they were legal lobsters, simply packed in the wrong 
packaging. Not satisfied with the Lacey Act violations, the 
Federal prosecution charged them with smuggling. Now, how could 
the shipment of these lobster tails in clear, transparent bags 
going through Customs and FDA inspection constitute smuggling?
    Well, for Federal prosecutors, that was like shooting fish 
in a barrel. Anyone who brings in the United States merchandise 
``contrary to law'' is guilty of smuggling. And since these 
were packed in the wrong packaging, that was contrary to law, 
and therefore, you are smuggling. Therefore, if you bought it 
in opaque cardboard boxes which had to be pried open to see 
what was in it, that was not smuggling. But if you bought it in 
clear, transparent bags, that is smuggling.
    ``Oh, did you pay for this seafood? Well, I guess we will 
have to charge you with money laundering.'' Well, they paid for 
it. They had their invoices and bills of lading. And hence, 
they were sentenced up to 97 months.
    Now, on appeal in the 11th circuit the Honduran Government 
and its agencies filed the brief saying that the official 
position of the Honduran Government was that all three of these 
regulations were either void or of no legal effect. In short, 
none of the defendants could have been prosecuted in the 
Honduras for violating these regulations. And the opinion in 
the 11th circuit, the court upheld it. But in the strong 
dissent, Judge Fay said, ``What was thought to be a crime turns 
now not to be a crime.''
    As for whether foreign regulations should be covered, the 
court of appeals said that it was. However, as we know, the 
Lacey Act precludes importing seafood, et cetera, that violates 
any U.S. law or regulation, any State law or regulation, any 
tribal law or regulation. But when it came to foreign law, it 
didn't say any foreign law or regulation, it just said foreign 
law. And, indeed, in the 1981 amendments, Congress considered 
and rejected an expansive definition of foreign law to include 
foreign law and regulations, and struck that provision down. In 
short, Congress meant what it said and said what it meant, and 
the courts are not to rewrite the legislation.
    In conclusion, my recommendations, along with Mr. Larkin, 
is that if Congress intended to incorporate foreign laws and 
regulations, then Congress should say so expressly, and not 
leave it to the courts to rewrite the legislation that Congress 
enacted.
    Moreover, in order to give proper notice to the public and 
regulated community, these enforcement agencies should have a 
data base of all the valid regulations, edicts, decrees, and 
alike that are applicable in the Lacey Act. And finally, 
Congress should decriminalize the Lacey Act. At a minimum, if 
the foreign country uses only civil or administrative 
penalties, so should the U.S. Government, rather than using the 
heavy hand of criminal penalties and excessive prison terms. 
Thank you.
    [The prepared statement of Mr. Kamenar follows:]

          Statement of Paul D. Kamenar, Esq., Attorney at Law

    Mr. Chairman, Mr. Ranking Member, and Members of the Subcommittee:
    My name is Paul D. Kamenar, a Washington, D.C. lawyer and legal 
public policy advisor with over thirty-five years experience litigating 
federal cases in the U.S. Supreme Court and lower federal courts, 
including cases involving abusive criminal enforcement of environmental 
laws such as the Clean Water Act, Endangered Species Act, and the Lacey 
Act. I am also a Senior Fellow of the Administrative Conference of the 
United States and Member of its Judicial Review Committee. I guest 
lecture at the U.S. Naval Academy on National Security Law, which 
includes a discussion of how certain environmental laws have hampered 
military training exercises. I was also a Clinical Professor of Law at 
George Mason University Law School and Adjunct Professor at Georgetown 
University Law Center where I taught a separation of powers seminar.
    As the former Senior Executive Counsel of the Washington Legal 
Foundation, I litigated constitutional and regulatory cases, testified 
before Congress on environmental enforcement and oversight, and 
participated in symposia and conferences on overcriminalization. Of 
relevance to this hearing, I was counsel in McKinney v. U.S. Dep't of 
Treasury, 799 F.2d 1544 (Fed. Cir. 1986) representing Members of 
Congress and the International Longshoremen's Union to stop the illegal 
importation of goods from the former Soviet Union, including lumber, 
made by forced labor in violation of Section 307 of the Smoot-Hawley 
Tariff Act. Of more particular relevance, I was counsel to three 
American citizens who were convicted of violating the Lacey Act for 
importing frozen lobster tails from Honduras and sentenced to prison 
for over eight years and for whom I drafted and filed their petition 
for writ of certiorari to the Supreme Court. McNab/Blandford v. United 
States, 324 F.3d 1266 (11th Cir. 2003), cert. denied, 540 U.S. 1177 
(2004).
    I am testifying today in my personal capacity and not on behalf of 
any other person or organization. While I fully subscribe to the views 
of the other witnesses who are critical of the Lacey Act's overly broad 
and unconstitutional reach with respect to the enforcement of all 
foreign laws and regulations regulating their wildlife and plants, I 
will focus my testimony on the McNab case as an example of just how the 
Lacey Act's reference to foreign law has been abused and misinterpreted 
by the courts.
Foreign Law Enforcement under the Lacey Act: United States v. McNab
    David McNab was a Honduran fisherman who owned and operated fishing 
vessels that caught spiny lobsters up to 350 miles off the coast of 
Honduras. After his catch was inspected at Roatan Island, Honduras, he 
would ship the frozen spiny lobster tails in clear transparent plastic 
bags to seafood importers Robert Blandford and Abner Schoenwetter in 
the United States where the shipments were subjected to inspection and 
cleared by U.S. Customs and the Food and Drug Administration. The 
lobsters were then sold to seafood dealers, including Diane Huang, for 
further processing and then resold to restaurants such as Red Lobster. 
These shipments were made over the years with no question as to their 
lawfulness.
    On February 5, 1999, after receiving an anonymous facsimile that 
the shipment coming in that day may contain allegedly ``undersized 
lobster tails'' (i.e., those that were under four ounces), armed agents 
from the National Marine Fishery Services (NMFS) seized the vessel. 
Blandford, Schoenwetter, and McNab were not advised why the vessel was 
being seized. Several weeks later, the lobster tails were transferred 
from the ship to a facility in Florida. Over the next six months, NMFS 
agents traveled back and forth to Honduras to determine what if any 
Honduran laws or regulations might have been violated. They concluded 
that three Honduran regulations or laws may have been violated: 1) a 
regulation limiting harvesting of spiny lobsters whose tails are less 
than 5.5 inches (or under 4 ounces); 2) a regulation detailing how the 
seafood is to be packaged, namely, in cardboard boxes; and 3) a 
provision that prohibits capturing egg-bearing female lobsters. NMFS 
agents finally began their inspection of the shipment.
    Armed with rulers, they determined that only three percent of the 
catch was undersized according to the Honduran size regulation--a very 
low percentage that would not be unusual in catching and processing 
70,000 pounds of lobster tails. While the NMFS expected the importers 
to be aware of this foreign regulation, apparently the United States 
government was not. Indeed, in their weekly public posting of all 
frozen seafood prices to the industry, the NMFS listed Spiny Lobster 
Tails from Honduras as selling for $8.75 for those weighing two ounces; 
$9.95 for those weighing three ounces, and $12.25 for those weighing 
four ounces. A copy of the price list is attached hereto. Thus, not 
only was it against the financial interest of the U.S. seafood dealers 
to import smaller lobster tails, but also the federal government even 
had an official price list for them.
    Similarly, the NMFS determined that a small percentage of the catch 
was egg-bearing, allegedly in violation of another Honduran law. 
However, the entire catch of 70,000 pounds of spiny lobster--a species 
which was neither endangered nor threatened--were shipped in 
transparent plastic bags instead of cardboard boxes, and the entire 
shipment thus became ``illegal'' and subject to forfeiture. Not 
satisfied with the substantial forfeiture and severe civil penalties 
available, and despite the fact that the importers were advised that 
NMFS was only trying to build a civil case against Mr. McNab, federal 
prosecutors filed felony criminal charges against McNab, Blandford, 
Schoenwetter, and Huang. As Mr. Schoenwetter testified a few years ago 
on the topic of overcriminalization before the House Subcommittee on 
Crime, then Chaired by Congressman Bobby Scott, armed agents from the 
FBI, IRS, and NMFS searched Mr. Schoenwetter's home in the early 
morning, herding his wife, mother-in-law, and his young daughter in the 
living room in their night clothes, ordering them to be quiet. A few 
days later armed agents returned at 6:00 a.m. to arrest Mr. 
Schoenwetter. None of the defendants had ever before been charged with 
any offense, but were hard-working small businessmen trying to make a 
living.
Smuggling and Money Laundering Charges
    The U.S. defendants were charged with violating the Lacey Act for 
importing frozen lobster tails in violation not of any U.S. law or 
regulation, or any State law or regulation, but of the Honduran 
regulations regarding size and packaging. As will be discussed, it was 
this technical packaging violation that dictated the draconian sentence 
of over eight years in prison. The U.S. defendants were not charged 
with violating the egg-bearing provision. Not satisfied with invoking 
the Lacey Act's felony provisions which provide a maximum punishment of 
five years for the worst violation, overzealous Justice Department 
prosecutors started to pile on with additional felony counts of 
smuggling and money laundering which, if sustained, would add more 
prison time to be served by these hardworking citizens.
    One might be forgiven if one were to ask how could the shipment of 
these lobster tails in clear transparent plastic bags that went through 
Customs and FDA inspection constitute smuggling. After all, one would 
normally consider a smuggling scenario where illegal or endangered 
wildlife or parts are concealed in luggage or similar containers. 
Indeed, the trial judge was puzzled as to how the defendants' conduct 
constitutes smuggling. But for the federal prosecutors, making a 
smuggling case was like shooting fish in a barrel. After all, under 18 
U.S.C. 545, anyone who brings into the United States merchandise 
``contrary to law'' is guilty of smuggling, subject to a prison term of 
up to 20 years. So if the lobster tails were shipped in opaque 
cardboard boxes which would have to be pried open to see what was 
inside, then that would not constitute smuggling; however, if they were 
transported in clear transparent plastic bags and inspected by Customs 
and the FDA, then, according to the Justice Department, that 
constitutes smuggling. Under this definition, any violation of the 
Lacey Act's foreign law provision, even if it were an administrative, 
civil or misdemeanor violation, can easily be prosecuted as a felony 
smuggling offense since the seafood, wildlife, or plant was imported 
``contrary to law.''
    The prosecutors were still not finished. Did the importers pay for 
this seafood? Of course they did. They had invoices, cancelled checks, 
and bills of lading that were turned over to NMFS showing that they 
paid for the seafood as they have been for several years in the normal 
course of business. So now the prosecutors added money laundering 
charges. One would normally consider money laundering as ``laundering'' 
cash proceeds from drug deals through an offshore bank and the like. 
Even the trial judge also was puzzled as to how this offense could be 
considered money laundering. Yet the money laundering statute, 18 
U.S.C. 1957 and 1956(h), is written in such a way that the conversion 
of the sale of unlawful goods--here, the lobsters ``illegally'' packed 
in plastic bags--constitutes felony money laundering charges. Again, 
the money laundering provision used this way can be used in almost any 
Lacey Act violation where goods are sold. And the Justice Department 
always adds a conspiracy count for good measure in cases where two or 
more violators are involved. Accordingly, those who characterize the 
McNab defendants as being notorious ``smugglers'' and ``money 
launderers'' as well as Lacey Act violators are being disingenuous and 
misleading.
    As unfair as the heavy-handed prosecution was, it was made all the 
more troubling in that questions were raised at trial requiring a 
separate hearing as to whether the Honduran regulations at issue were 
even valid under Honduran law. The defendants' expert witness testified 
that the cardboard container regulation was invalid inasmuch as the 
enabling legislation giving rise to that regulation was repealed in 
1995; the size regulation was procedurally defective in its 
promulgation; and the egg-bearing provision was repealed with 
retroactive effect. Nevertheless, the trial court accepted the 
testimony (later recanted) of a mid-level legal advisor to the Honduran 
Agriculture Department that the laws were valid.
    All the defendants were convicted, and due to the value of the 
entire ``illegal'' shipment packed in plastic bags, the Court applied 
the then mandatory Sentencing Guidelines which were based on the total 
gross value of the ``smuggled'' goods, not the net profits. The Court 
imposed draconian sentences of 97 months (eight years and one month) on 
McNab, Blandford, and Schoenwetter and 24 months on Huang. That 
sentence greatly exceeded the punishment for more serious crimes. See, 
e.g., United States v. McPhee, 336 F.3d 1269 (11 Cir. 2003) (57-month 
sentence for intent to distribute 100 kilograms of marijuana aboard a 
vessel).
    Although the maximum sentence under the Lacey Act was five years, 
to meet the 97- month sentence, the Court was forced to make the 
sentence of some charges consecutive with others rather than concurrent 
as is usually the case. In short, the statutory maximum became the 
mandatory minimum, and was especially excessive because parole has been 
eliminated in the federal system. Keep in mind that what drove these 
excessive sentences were goods that were not considered contraband per 
se, but what has been referred to as ``derivative contraband,'' namely, 
violations of procedural rules regulating shipping or transporting. 
McNab was immediately incarcerated while the American defendants were 
allowed on bail pending appeal.
    During the appeal, McNab challenged the validity of the size limit 
law in the Honduran courts and prevailed. Nevertheless, the federal 
district court rejected any post-conviction challenge to the law. On 
appeal to the Eleventh Circuit, the Honduran Government and its 
agencies filed an amicus brief noting that all three of the regulations 
were either void or of no legal effect. In short, none of the 
defendants could have been prosecuted in Honduras for violating these 
regulations. As noted, the government's star witness at trial from 
Honduras recanted her testimony.
    In a 2-1 opinion, the Eleventh Circuit upheld the convictions, 
refusing to give any deference to the official position of the Honduran 
government as to the validity of their own laws but deferred to federal 
prosecutors as to the meaning of the foreign law. As Circuit Judge Fay 
remarked in his strong dissent, ``what was thought to be a crime turns 
out not to be a crime under Honduran law'' and that the convictions 
should be reversed. That would be the outcome under our system if a 
defendant were convicted of a law found defective on appeal. See United 
States v. Goodner Bros. Aircraft, 966 F.2d 380 (8th Cir. 1992). The 
Circuit Court also rejected the argument with little analysis that even 
if the regulations were valid, the Lacey Act only makes it unlawful to 
import goods in violation of ``foreign law,'' not a country's 
regulations, edicts, or decrees, of which there are thousands.
Petition for Writ of Certiorari Judicial Deference to Foreign 
        Governments
    In their petition for writ of certiorari, the defendants argued 
that the Supreme Court should hear the case because the defendants' Due 
Process rights were violated since they were not tried on the basis of 
a valid law but rather on ones that were void or defective Honduran 
regulations that were incorporated by reference in the Lacey Act. 
Moreover, due to the nature of our global economy (and now, the 
expansive reach of the Lacey Act Amendments of 2008 to include plants 
and plant products), this case presented an exceptionally important 
question of the level of deference the courts should afford the 
official views of a foreign government in determining the meaning of 
their own laws. Indeed, the decision of the Eleventh Circuit conflicted 
with the decisions of the Supreme Court itself and other circuits where 
``substantial deference'' is accorded a foreign government's views of 
its own laws in other contexts, such as tax laws and the like. Indeed, 
ignoring the foreign country's views of its own laws undermines the 
Lacey Act which its proponents claimed in 1981 as aiding ``foreign 
nations in enforcing their own wildlife laws.'' 127 Cong. Rec. 4737 
(1981) (remarks of Senator Chafee).
    In short, while it is grossly unfair and constitutionally suspect 
to require U.S. citizens to comply with foreign law by incorporating 
those laws wholesale by reference in the Lacey Act, at a minimum, the 
interpretation of those laws should be within the province of the 
foreign nation, not federal prosecutors, and substantial deference 
should be provided to that interpretation.
``Foreign Law'' Does Not Include Foreign Regulations
    In addition--and of particular relevance to this hearing--the 
American defendants sought review in the Supreme Court of the Eleventh 
Circuit's facile conclusion that ``foreign law'' includes the myriad of 
foreign regulations and the like, including the (invalid) ones from 
Honduras invoked by the prosecutors in the McNab case. With scant 
analysis of the text and legislative history of the Lacey Act, the 
Eleventh Circuit followed the equally flawed decisions of the Ninth 
Circuit in concluding that ``foreign law'' also constitutes ``foreign 
regulations'' and similar provisions. See United States v. 594,464 
Pounds of Salmon, 871 F.2d 824 (9th Cir. 1991) and United States v. 
Lee, 937 F,.2d 1388, 1391-92 (9th Cir. 1991).
    Both the Eleventh Circuit and Ninth Circuit ignored fundamental 
rules of statutory construction by disregarding the language used by 
Congress regarding the applicability of foreign law. The Lacey Act 
expressly prohibits the importation of wildlife that violates any 
``law, treaty, or regulation'' of the United States'' (16 U.S.C. 
3372(a)(1)); any ``law or regulation of any State''(16 U.S.C. 3372 
(a)(2)(A)); and ``any tribal law'' (16 U.S.C. 3372(a)(1)) further 
defined as meaning ``any [tribal] regulation . . . or other rule of 
conduct enforceable by any Indian tribe . . ..'' 16 U.S.C. 3371(a)(c). 
However, with respect to the term ``foreign law,'' Congress did not 
include ``regulation'' to encompass that term. If Congress wanted to 
include foreign regulations, it could have easily done so. Indeed, it 
clearly decided not to do so in the 1981 amendments.
    The pre-1981 version of the Lacey Act admittedly did proscribe the 
transportation of wildlife ``in violation of any law or regulation of 
any State or foreign country'' (formerly 18 U.S.C. 43(a)(2)). During 
the 1981 amendment process, however, when the original Lacey Act was 
actually repealed in toto along with the Black Bass Act, Congress 
considered and rejected an expansive definition of ``foreign law'' in 
the original Senate bill. See S. 736, 97th Cong., 1st Sess., 127 Cong. 
Rec. 4738 (March 19, 1981) (```foreign law' means law or regulations of 
a foreign country . . ..'') (emphasis added). In the final version of 
the bill as passed by the Senate, this definition was replaced with the 
current version of ``foreign law'' without including ``regulations.'' 
In short, Congress had the opportunity to adopt a broader definition of 
foreign law and did not do so. By both repealing the pre-1981 version 
of ``foreign law or regulation'' provision and rejecting the broad 
proposed definition, Congress meant what it said and said what it 
meant. It was impermissible for the Ninth and Eleventh Circuits to 
rewrite the law to suit their view of what ``foreign law'' should mean.
    The Supreme Court unfortunately denied review and has not ruled on 
this important issue; consequently this expansive view of ``foreign 
law'' is only valid in the Ninth and Eleventh Circuits. At a minimum, 
it was incumbent on Congress in 2008 when it amended the law as it is 
today to make it clear in statutory language whether ``foreign law'' 
encompasses the myriad of foreign regulations and decrees, many of 
which are unknown to the American public and importers.
    Even the Eleventh Circuit agreed that the meaning of ``foreign 
law'' is ambiguous with respect to whether it encompasses foreign 
regulations. But under Due Process and the Rule of Lenity, the language 
of a statute that is enforced criminally should be strictly construed 
in favor of the defendant. See United States v. Universal C.I.T. Credit 
Corp., 344 U.S. 218, 221-22 (1952); Dunn v. United States, 442 U.S. 
100, 112 (1979).
    In short, Congress is the body constituted under Article I of the 
Constitution to make laws, not the courts or foreign governments. If 
Congress intended to incorporate foreign laws and regulations, then 
fairness requires that the enforcement of those foreign laws under the 
Lacey Act be treated as they would be in the foreign country, namely, 
administratively or civilly rather than criminally as many foreign 
regulations so provide. Moreover, in order to provide proper notice to 
the public and the regulated community, the enforcing agencies should 
have a database of all the valid foreign regulations, edicts, decrees, 
and the like that are applicable to the natural resource at issue.
Incorporating ``Foreign Regulations'' in the Lacey Act Is Inconsistent 
        With the Congressional Review Act
    In addition to the constitutionally suspect ``foreign law'' 
provision of the Lacey Act to include ``foreign regulations,'' the 
incorporation of ``foreign regulations'' into a domestic law without 
specifying which foreign regulations are required to be obeyed violates 
the letter and spirit of the Congressional Review Act (CRA), 5 U.S.C. 
801-888. The CRA requires each federal agency to send its covered final 
rules to the Comptroller General at the Government Accountability 
Office (GAO) and to both houses of Congress ``[b]efore [such rules] can 
take effect.'' 5 U.S.C. 801(a)(1)(A).
    The CRA was enacted in 1996 to give Congress the power to 
disapprove agencies' final rules by enacting a joint resolution of 
disapproval. Senator Don Nickles, a co-sponsor of the legislation, 
noted, ``As more . . . of Congress' legislative functions have been 
delegated to federal regulatory agencies . . . Congress has effectively 
abdicated its constitutional role as the national legislature . . .. 
This legislation will help to redress the balance, reclaiming for 
Congress some of its policymaking authority . . ..'' Joint Statement of 
House and Senate Sponsors, 142 Cong. Rec. S3683 at S3686 (daily ed. 
April 18, 1996). While a limited category of rules are exempt from 
CRA's coverage, other rules, such as those governing ``foreign 
affairs'' which are otherwise exempt from notice and comment under the 
Administrative Procedure Act, are most notably not excluded from 
coverage under the CRA. Accordingly, a strong argument can be made that 
to the extent ``foreign regulations'' are incorporated in the Lacey 
Act, those ``regulations'' are subject to the CRA and must be submitted 
to Congress before they may take effect.
Conclusion
    The Lacey Act violates the Rule of Law and gives prosecutors too 
much enforcement power by incorporating ``foreign law'' and unspecified 
``foreign regulations'' into the law's reach, especially with respect 
to criminal prosecutions where an individual's liberty is at stake.
    The prosecution in the McNab case illustrates how the Lacey Act can 
be abused and how easy it is for the Justice Department to include 
smuggling and money laundering felony charges where more reasonable 
civil and administrative remedies are available and which would better 
serve the interests of justice and the environment.
    I look forward to answering any questions the Committee may have. 
Thank you.
                                 ______
                                 
    Dr. Fleming. Thank you, Mr. Kamenar. At this point we will 
begin Member questioning of the witnesses. To allow all Members 
to participate, and to ensure we can hear from all witnesses 
today, Members are limited to 5 minutes for their questions. 
However, if Members have additional questions, we can have more 
than one round of questioning. I now recognize myself for 5 
minutes.
    I have a yes-or-no question for the panel. You will have a 
chance to explain anything later, if you would like. But my 
question is this. Do you think that the Lacey Act, a bill, law, 
that is 113 years old now, was and is a good idea, that it has 
a value to protect the illegal importation of living 
substances, or post-living substances, from other countries? Do 
you, panel, agree that is well intended? Starting over here.
    Mr. von Bismarck. Yes.
    Mr. Asner. It is a great idea.
    Ms. Alexander. I am CRS, so I will have to qualify it.
    Dr. Fleming. I figured you would say something like that. 
That is OK, we will give you a pass.
    Mr. Rubinstein. Provided it is consistent with our legal 
norms and our Constitution, yes.
    Mr. Larkin. Yes.
    Mr. Kamenar. Yes, but qualified by making sure that due 
process is applied.
    Dr. Fleming. Right. So, at least conceptually, what could 
be wrong with protecting against the illegal importation of 
substances that could create, of course, endangered species 
from other nations? Well, we will get into that a little bit.
    Now, here is another question. And I will start with you, 
Mr. Asner. Is it possible that in the wording of the 2008 
amendments to the Lacey Act, we are subjecting United States 
citizens potentially to Sharia law in certain countries?
    Mr. Asner. I am not familiar with Sharia law, so I don't 
know how it regulates, if at all, the taking of wood or wood 
products or plants or plant products. But I can tell you that 
certainly if Sharia law says you cannot steal from your 
neighbor--and I suspect it does--then, yes, it would 
incorporate that concept in it.
    Now, would it incorporate all concepts of Sharia law? No, 
because what it requires is----
    Dr. Fleming. Let me get to some others. I understand. I get 
your--good answer, thank you. That potentially it could, 
although limited, not necessarily all of Sharia law, and I 
certainly understand that.
    Just to point out, countries that we do trade with include 
Yemen, Saudi Arabia, Qatar, Pakistan, Iraq, Iran, Afghanistan, 
Sudan, parts of Indonesia, Nigeria, and the United Emirates. So 
certainly at one point or another, we are likely to interact 
with this.
    Other panel members, our attorneys, do you have any 
comments about is there the potential, whether limited, whether 
expanded, laws that could be ordinarily found to be 
unacceptable in this country, as we know Sharia law often can 
be, could we in fact be subjecting our own citizens to Sharia 
law?
    Mr. Larkin. Yes, sir. The Act doesn't limit the term 
``foreign law.'' Whatever foreign country adopts as its law 
must be treated as that.
    If I could also add, it is not theft in the United States 
to capture wildlife, because no one has a property interest in 
wildlife. So it is--catching fish is not like stealing your 
neighbor's car. You have a property interest in your car. But 
for fish that are in the rivers and streams, no one has a 
property interest in those, so it is not the same.
    Mr. Rubinstein. I think that is right. The fundamental 
problem here--and, frankly, it was recognized in a case called 
United States Bryant--the laws that you are applying have to be 
defined so that the people who are subject to them are able to 
understand them and apply them. Michigan is not Madagascar. 
Indiana is not India. And South Dakota is not Saudi Arabia. 
And, unfortunately, the Lacey Act doesn't draw that 
distinction, at least----
    Dr. Fleming. So you are suggesting that if there are laws 
in other nations that could be completely at odds with our 
culture and our understanding and our own law and our own 
civilization, that we could theoretically, by default, be 
subjecting our citizens to the laws of that nation.
    Mr. Rubinstein. That is correct.
    Mr. Kamenar. I would also agree. I mean you could think of 
other examples, as well. Let's assume that Venezuela and 
Bolivia, which is going to offer asylum to William Snowden, 
were to have a law saying that none of their exports could be 
shipped to the United States, because they don't like the 
United States, or we are an ally with Israel, or something like 
that. Therefore, any goods coming from those countries would 
violate the Lacey Act. And I think, again, there is another 
example of where the law can be misused.
    Dr. Fleming. Quickly, before my time runs out, just to 
throw it out to the three panelists on this end, do you agree 
with Mr. Asner that the Lacey Act does not subject Americans to 
foreign law?
    Mr. Larkin. It certainly does. The Supreme Court has made 
clear that the violation of a statute is a question of law. The 
statute here requires proof of a violation of foreign law.
    Dr. Fleming. Yes.
    Mr. Kamenar. And I agree. And what makes it more 
complicated is that when the courts are to determine what that 
foreign law is, you have days and days of hearings as to what 
this law means. And in the McNab case, the Honduran Government 
said, ``Here is the meaning of these laws. They are invalid 
under our country.'' And yet the 11th circuit said, ``No, we 
will decide what your law means.'' And because of that they 
were subjected to these Draconian penalties.
    Dr. Fleming. Real quickly.
    Mr. Rubinstein. Yes, it does. Yes.
    Dr. Fleming. OK. All right. My time is up. I yield to the 
gentleman from the Marianas.
    Mr. Sablan. Thank you. Thank you very much, Mr. Chairman.
    I am going to ask all of you two questions. And if you 
could, please just give me a yes or no answer. Do you think 
American consumers have a right to know whether the goods they 
buy are stolen? We will start from the left to the right. Mr. 
von Bismarck?
    Mr. von Bismarck. Yes, I do.
    Mr. Asner. Absolutely.
    Ms. Alexander. Pass.
    Mr. Sablan. Oh, come on. I mean that is a simple question.
    [Laughter.]
    Mr. Sablan. You are a consumer.
    Dr. Fleming. She wants to keep her job.
    Ms. Alexander. In terms of CRS I am going to pass.
    Mr. Sablan. All right.
    Ms. Alexander. In terms of myself, I would like to know.
    Mr. Sablan. OK, sure. Mr. Rubinstein, sir?
    Mr. Rubinstein. Sure, they do. And it would be helpful----
    Mr. Sablan. Yes or no. Yes or no.
    Mr. Rubinstein. Yes, with an explanation.
    Mr. Larkin. Yes, with my earlier explanation.
    Mr. Kamenar. Yes, we should have a data base that has these 
goods listed----
    Mr. Sablan. No, no. It is just do they have a right to know 
whether the goods they are buying----
    Mr. Kamenar. They have a right to know it by the government 
telling them, too, what it is.
    Mr. Sablan. Now my next question is--and let's start with--
Mr. Kamar?
    Mr. Kamenar. Kamenar.
    Mr. Sablan. All right. My next question, do you think 
foreign visitors and companies in the United States should have 
to abide by U.S. laws?
    Mr. Kamenar. I am sorry, could you repeat that?
    Mr. Sablan. Do you think foreign visitors and companies in 
the United States should have to abide by U.S. laws?
    Mr. Kamenar. Foreign visitors here in the United States 
have to comply with U.S. laws?
    Mr. Sablan. Yes.
    Mr. Kamenar. Yes, of course.
    Mr. Sablan. No explanation, but yes. OK. Sir?
    Mr. Larkin. Yes, sir.
    Mr. Rubinstein. Yes, sir.
    Mr. Sablan. Ms. Alexander?
    Ms. Alexander. I believe that is U.S. law, yes.
    Mr. Sablan. All right. Finally, thank you.
    Mr. Asner. Yes.
    Mr. von Bismarck. Yes.
    Mr. Sablan. If you are saying that if you don't 
understand--I think it was Mr. Kamenar--if you don't 
understand--or one of you. Maybe Mr. Larkin was saying that if 
you don't really understand the law, then you should not be 
held responsible for it. Right?
    Mr. Larkin. No. What I said is if a law is not 
understandable by a reasonable person----
    Mr. Sablan. If it is not----
    Mr. Larkin [continuing]. You can't be criminally prosecuted 
for it.
    Mr. Sablan. If it is not written in English, so--wow. 
Really? I won't go there.
    Mr. Larkin. No, no, no, it is OK. I don't think any--I 
don't think the Supreme Court----
    Mr. Sablan. Let me go to Mr. Asner. Mr. Asner, other 
witnesses have said it should not be a crime under the Lacey 
Act to steal from other countries because people cannot 
possibly be expected to know other countries' laws. But my 
understanding is that in order to be criminally responsible 
under Lacey, someone would have to know the law, and then break 
it anyway, like what Gibson Guitar Corporation did.
    Is that the case? And, if so, doesn't that standard give a 
lot of protection to people who just didn't know better?
    Mr. Asner. Absolutely. That is the law. And I have the 
advantage of being perhaps the one person in this room who 
actually has prosecuted a Lacey Act case. And the burden of 
proof is on the government to prove the mental state of the 
defendant with respect to the foreign predicate law. And to be 
very clear, if an individual does not know the foreign law, 
does not know he violated the foreign law, and in the exercise 
of due care should not have known that he violated the foreign 
law, the person is innocent.
    Mr. Sablan. I am going to--under different venue or 
circumstances, I am going to speak to Ms. Alexander eventually. 
But Mr. Asner, once again, in his testimony Mr. Kamenar 
insisted that the facts of the McNab case showed that the 
defendant did nothing wrong, and that a correct interpretation 
of the law shows they should not have been found guilty of 
violating the Lacey Act.
    As a lawyer, when the facts are on your side, and the law 
is on your side, shouldn't you win the case? I am sure Mr. 
Kamenar is a good lawyer, I don't doubt that. So is he leaving 
something out in his description of the McNab case?
    Mr. Asner. Look----
    Mr. Sablan. Everything was in his favor and they lost the 
case. Something is wrong here.
    Mr. Asner. Yes. I mean I think the record is pretty clear. 
You can go and read the court opinions. I have. You can go read 
the briefs. I have. And the facts are extremely different from 
what is described here.
    He lost the case. And they lost it at the trial level, they 
lost at the court of appeals. The Supreme Court didn't even 
bother to look at it. The facts as they describe are not 
correct. These individuals were found guilty of knowingly 
violating the law, and they were put in jail because of it, 
appropriately. That is the law.
    Mr. Sablan. Because we are government rule of law, that is 
the law.
    I have one more question for Mr. Asner. In his testimony, 
Mr. Asner, Mr. von Bismarck points out that the transnational 
natural resources crime has grown incredibly sophisticated. The 
framers of the United States Constitution could hardly have 
envisioned militarized poaching rings that use disposable 
mobile phones to avoid detection, GPS units, and night vision 
goggles to track their prey, and helicopters and AK-47s to 
track it down. So is it appropriate that both criminal law and 
interpretation of the Constitution have evolved to keep pace 
with criminals?
    Mr. Asner. Well, the Lacey Act has evolved to take account 
of the changes in law. So the best example, for example, is 
just the fact that the airplane and the automobile were brought 
into our lives has changed the Lacey Act. And the increased 
coordination between law enforcement has definitely helped 
enforcement.
    Dr. Fleming. The gentleman's time is up. Ms. Shea-Porter, 
you are recognized for 5 minutes.
    Ms. Shea-Porter. Thank you, and thank you for being here. I 
think former President George Bush would be very shocked to 
find out that he had somehow or another exposed us to Sharia 
law. I think the reality is that we have a problem in that this 
stuff is in other people's countries. And just as we have stuff 
in our country and we expect foreigners to obey our laws, I 
think it is reasonable to say if a country feels that--whether 
it is a national security issue, because there are poachers who 
are drug dealers, et cetera, involved, or whether they are 
running out of and facing potential extinction of some product, 
or for whatever reason, that countries have a right to impose 
their laws there.
    Having said that, we certainly expect to trade fairly and 
responsibly. But I just can't believe that if a foreign country 
came up and decided they would start chipping away at one of 
our plants and say, ``Well, we don't want to fall under 
American law,'' that we would be offended. So it doesn't make 
sense to me, what we are talking about with the Sharia law. And 
I just felt that I needed to say that.
    Now, the other part that I wanted to talk about was the 
guitar. Didn't they plead guilty? Didn't Gibson Guitar plead 
guilty?
    Mr. Rubinstein. No. I have here the document.
    Ms. Shea-Porter. They paid a fine, right?
    Mr. Rubinstein. They paid a fine, they entered into an 
agreement. And this is called a criminal enforcement agreement. 
And it's quite lengthy.
    Ms. Shea-Porter. But they accepted it?
    Mr. Rubinstein. Well, they paid it because many times in 
these kinds of situations--now, I did not represent Gibson 
Guitar, but I have represented other clients, and there comes a 
time when you do a cost benefit analysis.
    Ms. Shea-Porter. Didn't they acknowledge that they had 
somebody on their staff who went and saw this wood and knew 
that this was not allowed? And didn't he report back? I could 
be wrong, but it seems to me----
    Mr. Rubinstein. Well, it is--I can show this to you, 
because----
    Ms. Shea-Porter. Did they acknowledge wrongdoing? I am just 
asking did they acknowledge wrongdoing. A criminal 
enforcement----
    Mr. Rubinstein. Well, they paid a fine----
    Ms. Shea-Porter. OK, so----
    Mr. Rubinstein [continuing]. To resolve the matter with 
respect to Madagascar.
    Ms. Shea-Porter. They acknowledged wrongdoing, right?
    Mr. Rubinstein. No, what--no, they said that there were 
things that they could have done differently. And, in fact, 
what they did was they implemented a due diligence program----
    Ms. Shea-Porter. Well, let me ask you a personal question. 
Would you acknowledge wrongdoing and pay a fine if you were 
not, or would you keep----
    Mr. Rubinstein. If I was threatened with bankruptcy as a 
result of having to pay lawyers? Sure.
    Ms. Shea-Porter. I just think this is one of those cultural 
stories that we see passed around there.
    But moving on, Mr. Asner, you have worked with the----
    Mr. von Bismarck. May I contribute, Congressman? May I 
contribute----
    Ms. Shea-Porter. No, no. I need to ask Mr. Asner a 
question. Thank you, though.
    Mr. Asner, you have worked with a number of clients on 
issues relating to the Lacey Act. I am wondering if any of your 
clients don't attempt to work within the laws of foreign 
nations when they work overseas. It would seem to me that any 
business looking to operate overseas or purchase goods from 
outside the country would want to do due diligence on what they 
were buying and who they were buying from, maybe even find out 
if what they are purchasing is contraband.
    Mr. Asner. Absolutely. That is what responsible 
organizations do. And going to Gibson, actually, it is quite 
interesting, because what Gibson ended up agreeing to, in 
addition to acknowledging wrongdoing, and acknowledging that 
their agent knew full well that it was illegal to get this 
wood, Gibson entered into an agreement to have a compliance 
program. And that compliance program now sets the standard. And 
it is very easy to follow. But what it does is it requires 
companies to, when they are bringing stuff into the United 
States, to do what you would expect, to take steps to make sure 
it is legal, so that when I buy it, it is legal. And it is what 
you would expect from a responsible company.
    Ms. Shea-Porter. And the other question I had is, for these 
companies who are doing their due diligence--and they obviously 
need to have some staff assigned, right--is there a high rate 
of bankruptcy, because they have to follow the law and they 
have to hire somebody to see if the law is--or is it like a 
corporation that maybe has to offer--fall under regulations if 
they offer employee daycare, and there are lots of regulations, 
so they hire somebody? So they must have outside expertise or 
somebody within the organization that can help them comply.
    Mr. Asner. Most legitimate companies were doing this 
already, frankly. It is the companies that were trying to cut 
corners and look the other way that were willfully importing 
illegal wood into the United States. But from a compliance 
function, it is actually relatively simple to comply, and most 
companies operating internationally already have FCPA 
compliance programs in similar sorts of things.
    Ms. Shea-Porter. So they are not going bankrupt because of 
these unbelievable regulations to----
    Mr. Asner. I have not heard of anything like that.
    Ms. Shea-Porter. OK. And we impose regulations on them, as 
well, on----
    Mr. Asner. We do impose regulations on them, as well.
    Ms. Shea-Porter. Right.
    Mr. Asner. And countries throughout the world are looking 
to the Lacey Act as something that they want to model for their 
own laws.
    Ms. Shea-Porter. And countries expect this, and businesses 
on both sides of the ocean expect that there will be 
regulations.
    Mr. Asner. And, frankly, American consumers should expect 
it, too, because we have a right to legal goods.
    Ms. Shea-Porter. Thank you. I yield back.
    Dr. Fleming. The gentlelady yields back. The Chair now 
recognizes Mr. Lowenthal for 5 minutes.
    Dr. Lowenthal. Thank you, Mr. Chair, and thank you to our 
witnesses for coming here to testify today.
    It is quite perplexing why the Majority chose such a 
successful law to attack, a law that keeps protected plants and 
animals from being illegally smuggled into the United States, 
and a law that protects Americans. It protects the American 
timber industry from unfair competition, from illegally 
harvested forest products.
    And it is interesting. The Lacey Act has been repeatedly 
found to be constitutional by the courts, as illustrated by the 
ruling on three different U.S. district court rulings, and the 
refusal of the Supreme Court to even hear the McNab case on 
appeal. So let's move away from the constitutionality, and 
let's ask whether the Lacey Act now is good policy for the 
United States and for Americans, which--obviously, there are 
some folks who--here, on the Committee, in the Majority, think 
it clearly is not.
    Let me pose an example to illustrate how this type of 
policy would be in the best interests of the United States. If 
a poacher in the United States illegally takes and smuggles 
bald eagles out of our country and into the EU in contravention 
of U.S. law, including the Federal Eagle Act of 1940, would it 
be to our benefit for the EU to respect U.S. laws? And, in 
fact, the EU currently does respect foreign wildlife laws.
    What about China? You could say, well, what about China? 
Would it be appropriate to ask China to respect U.S. law? Would 
it be in the best interest of the United States to pass a law 
that required Chinese port inspectors to prevent illegally 
poached American Bald Eagles from being brought into China for 
sale? Should the United States Administration and Congress 
support the passage of a Chinese law that respects U.S. laws? 
If we dismantle the Lacey Act, then we have to answer no to all 
of these questions to be consistent with the reasoning that has 
been heard here today, which I point out is not in the United 
States' best interests.
    It is not in the best interests of the United States for 
the EU, for China, or for any other country to refuse to accord 
deference to U.S. law. If we dismantle the Lacey Act, we will 
have significantly weakened our leverage to encourage nations 
like China to pass such measures that protect--and I repeat the 
emphasis on protect--U.S. businesses, plant, and wildlife 
interests by respecting U.S. law.
    So, is the Lacey Act good U.S. policy? And the answer is 
most certainly yes. It has been hailed by the U.S. Trade 
Representative as an important tool in the U.S. efforts to 
combat illegal logging and associated trade. The forest product 
industry states that, ``Our organization stands in strong 
support of the Lacey Act and all that it has accomplished in 
addressing the issue of illegal logging.'' Yet we are here 
today to discuss and we are attacking whether, in fact, 
Americans have to comply with the laws of foreign nations, and 
we are attacking the Lacey Act.
    So, let me follow up these points with a question to Mr. 
von Bismarck.
    As bad as the current poaching crisis is, how bad would it 
be if not for the Lacey Act? Does eliminating the United States 
as a market for stolen wildlife and timber make a difference? 
And how have other countries responded to the examples set by 
the Lacey Act?
    Mr. von Bismarck. Thank you, Congressman. In my 
investigation and in my organization's investigations, the 
Lacey Act has been the leading deterrent against poaching 
around the world, whether it is tiger skins in Nepal, folks 
know about the Lacey Act and are worried about it.
    The United States is still, for most goods, the biggest 
consumer. If we walk back the Lacey Act or the foreign law 
components of the Lacey Act, we would make the current battle 
on the ground where people are losing their lives, the battle 
over poaching for ivory, we would give up on it. It would be 
over. And currently we have a chance, for the reasons that you 
articulated, Congressman, the Lacey Act not only shuts down our 
major market as a driver for the money that goes to those 
criminal networks, but it gives us leverage to reach a tipping 
point for the overall global market to dry up that demand. So, 
there is a lot riding on it, Congressman.
    Dr. Lowenthal. Thank you. And I yield back my time.
    Dr. Fleming. The gentleman yields back. Well, I think we 
are up for a second round, if our panel is. So I now recognize 
myself for 5 minutes.
    First of all, let me mention that the 2008 amendments were 
not signed into law by President Bush. It was actually a 
Democrat-controlled Congress that overrode President Bush's 
veto. So I don't think, if Mr. Bush were here today, he would 
want to take credit for this.
    Number two, we have established that even Sharia law could 
potentially be provided to make citizens subject to vis a vis 
the Lacey Act. And so, I would like to throw it out to our 
members on this side of the panel. Mr. Asner instructs us that 
he knows more about prosecuting the Lacey Act than anyone in 
the room today. I would like to hear what you would have to say 
in response, Mr. Larkin, about some of the statements made by 
Mr. Asner, and also--and others, as well, but also about the 
human cost.
    We hear a lot about what happens to animals and plants. 
But, as an American, I care more about what happens to 
Americans. So, again, Mr. Larkin, I would be happy to hear your 
comments.
    Mr. Larkin. I think it is important to keep in mind that 
every one of these cases has a very human cost. And the cost is 
on people who are morally blameless. What you have is a problem 
here that people do not know the law because it is so obscure, 
it is so difficult. After all, Gibson Guitar was alleged to 
have violated the Madagascar inter-ministerial order that, if 
you read page seven of the appendix of that non-prosecution 
agreement, apparently was written in a foreign language. The 
idea that someone should be held liable for that seems to be 
quite unfair.
    No one also, by the way, is saying the Lacey Act should be 
dismantled. I don't think anybody on this panel is. What we are 
talking about is implementing it properly. And it would not at 
all hurt prosecutions of the Lacey Act, if you required the 
government to prove that someone willfully violated the law, if 
you allowed someone to raise a mistake-of-law defense. Because 
in either of those instances, someone would not be subject to 
all the problems associated with the criminal process. And as a 
Federal agent for 6 years and a DOJ employee for 9, I know what 
that involves. Someone who is blameless would not have to go 
through that process if either of those elements were added 
into the Act.
    Finally, if you just required the government to identify 
all the laws that it says someone should know, you would not 
have any diminution in the enforceability of the Lacey Act. You 
would just be notifying the public what the requirements of the 
law are. That has been a cardinal requirement of Anglo-American 
criminal law for 1,000 years. The idea that somehow you are 
going to hurt enforcement if you don't tell people what the law 
is, is just silly. What it essentially amounts to is saying 
that it is OK for us to play Gotcha. If you don't know what the 
law is, you can still be held criminally liable for it. That is 
not the way our system works.
    Dr. Fleming. So, if, for instance, I am driving down the 
highway and the speed limit is 70, and I am driving 80 because 
there are no posted speed limit signs, then perhaps I would 
have driven within the speed limit had I know what the speed 
limit was. Is that what you are suggesting?
    Mr. Larkin. If you are in the United States and you are 
driving a car, you know that there is going to be a speed 
limit. You have the responsibility of determining what that is. 
And it is easy to find out, because they have signs and they 
have Web sites and the like that will tell you what the speed 
limit is. But there is no similar way of knowing what the law 
is in more than 190 foreign nations. And you are putting people 
at risk of not just the condemnation of the criminal process, 
but, as in Mr. Kamenar's client's case, having to serve more 
time in prison than some people do for violent offenses, 
because you are unaware of what a foreign nation's law is.
    Dr. Fleming. Well, Mr. Kamenar, tell us something about the 
human price here that is being paid.
    Mr. Kamenar. Well, it was paid by the defendants in this 
case, especially the U.S. defendants. They were told by the 
Marine Fisheries Service that they were trying to make out a 
civil case against Mr. McNab. But at 6:00 in the morning, armed 
Marine Fisheries Service, FBI, and IRS agents came into Mr. 
Schoenwetter's home in Florida, herded his wife, mother-in-law, 
and daughter, in their night clothes, into the living room and 
told them to be quiet while they searched the house. And then, 
a few days later, they came back to arrest this man, who has no 
prior criminal record and no running afoul of the law. And he 
spent 8--well, some time off for good behavior and so forth, 
but well over 6 years in Federal prison, he and Mr. Blandford. 
And it took a terrible toll on their health and their family.
    And, here again, this case could have been handled 
administratively. OK. Seize the lobster tails, even though only 
3 percent were undersized. Take the whole thing. Fine me. But 
why do we have to throw people in prison for 8 years? This is 
very much of an excessive overkill----
    Dr. Fleming. So what you are telling me--8 years in prison. 
He didn't murder anybody, correct?
    Mr. Kamenar. No, of course----
    Dr. Fleming. He didn't knock over a convenience store, he 
didn't assault anybody, he didn't rape anybody, right?
    Mr. Kamenar. That is right.
    Dr. Fleming. His crime was that the lobster tails were not 
the right size?
    Mr. Kamenar. Well, more importantly, the lobster tails were 
in plastic bags, instead of cardboard boxes, because it was the 
totality of that that drove the sentence.
    And I might add that this sentence was twice as long as the 
one that Mr. Asner prosecuted, where it was clear that they 
knew they were doing wrong, they were bribing the South African 
officials, they were smuggling it out, and yet our client is 
serving twice as much time for a law that, by the way, the 
Honduran Government said it was invalid under their own law. To 
me, that is just a travesty of justice.
    Dr. Fleming. Yes, I agree. Well, my time is up and I yield 
to the gentleman--the Ranking Member for 5 minutes.
    Mr. Sablan. Thank you very much, Mr. Chairman. Mr. von 
Bismarck, earlier you cited evidence, sir, that wildlife and 
timber crime is a threat to our national security. You also 
cited a report that shows that the 2008 Lacey Act amendments 
and similar efforts by the EU dramatically reduced the amount 
of wood China bought from high-risk countries and increased the 
amount of wood China bought from the United States. So is this 
evidence that the 2008 amendments are working to combat illegal 
logging?
    Mr. von Bismarck. Absolutely. The impact that I have 
personally witnessed in our investigations in dozens of Chinese 
companies have been--it has been extraordinary to see that the 
Lacey Act passed here in the United States is changing the 
practices of factories on the other side of the globe.
    In multiple meetings with Chinese factories, we saw the 
orders of American wood that were coming in. We have recorded 
the conversations where the CEOs of those companies explained 
that they are worried about making products with timber that 
comes from high-risk countries like Russia. And because they 
are worried that those shipments might get in some trouble in 
the United States, so they are changing their operations to get 
wood from places they trust. One of those places is the United 
States.
    And the actual trade data from China themselves backs up 
this on-the-ground information, where the proportion of wood 
that is coming from the United States to China was 10 percent 
in 2007, the year before Lacey was passed, and in 2010 went up 
threefold.
    Additionally, our trade surplus for manufactured goods with 
China in the wood sector was at about a $20 billion deficit in 
2006. And in 2010 went up to a $200 million surplus. Again, 
because not only does it help companies importing wood in 
China, but it helps U.S. manufacturing companies, this concern, 
because it will be easier for them to compete by buying the 
wood that is directly next to their company, their 
manufacturing center in the United States.
    Mr. Sablan. So something is going right here. So again, Mr. 
von Bismarck, you also gave a number of compelling examples of 
how organized crime in wildlife and timber threatens our 
national security. Do we also have a national security interest 
in helping other countries--apparently with just your earlier 
conversation with China--develop the responsible and legal use 
of their own natural resources? Their own natural resources. Do 
the foreign law provisions of the Lacey Act help us achieve 
that goal?
    Mr. von Bismarck. Absolutely. This is the irony, that for 
some of the markets that are maybe directly linked to some of 
the national security concerns, whether it is a cocaine 
shipment in Central America or rebels in Mindanao in the 
Southern Philippines, we are right now at the precipice of 
having markets that are directly adjacent to those situations 
pick up this principle, this principle that they do not--they 
will not accept shipments that have evidence attached that they 
are coming from these practices.
    Mr. Sablan. All right.
    Mr. von Bismarck. They are looking at what is happening 
here. If we backtrack on foreign laws in Lacey, we lose our 
chance to do that.
    Mr. Sablan. All right, thank you. I am going to go back. 
Mr. Asner, I have a question. Last time you were here, when you 
last appeared before the Subcommittee, you introduced Members 
to the concept of warranties and guarantees that could be used 
to shield importers from the unscrupulous actions of their 
suppliers. So can you please explain again the options people 
have to shield themselves from potential Lacey Act violations?
    And could taking advantage of such options have allowed the 
defendants in McNab or Gibson to avoid breaking the law and 
paying the price?
    Mr. Asner. Yes, it could have. It could have helped. So, 
again, the Lacey Act has three different levels. If you 
knowingly are involved with illegal wood, it is a felony. If 
you should have known, it is a misdemeanor. If you didn't know, 
but it is nonetheless illegal, then what happens is it could be 
forfeited. You are not criminally liable, but it could be 
forfeited. The advantage of having a warranty or representation 
from your supplier is that it helps you on all three prongs.
    With the forfeiture, it pushes the risk off to the 
supplier. With the other two you get a representation, and it 
helps you make the argument that you exercised due care.
    Dr. Fleming. The gentleman's time is up. The Chair now 
recognizes Ms. Shea-Porter for 5 minutes.
    Ms. Shea-Porter. Thank you. And I had a question. The 
comment was made that the rules weren't even in English, and 
there is 194 nations. How on earth do they do business if it is 
not even in English in the rules about the Lacey Act? How do 
they even pick up the phone and start making a business deal? 
Does everybody speak English except the ones that are looking 
at the enforcement? Or--I mean I don't understand that comment. 
Could you----
    Mr. Larkin. Yes. No, I am glad to. I have here a copy, as 
my colleague referred to, of the non-prosecution agreement. The 
non-prosecution agreement talks about, at the invitation of 
Greenpeace and other non-profit environmental groups on June 9, 
2008, a Gibson wood product specialist, Gibson representative, 
flew to Madagascar for a fact-finding trip with a group called 
the Music Wood Coalition, spearheaded by Greenpeace. The trip 
was designed to assess the potential for supporting sustainable 
forestry in Madagascar. Part of the justification for the 
Gibson representative's participation in the trip was the ebony 
species preferred for some of Gibson's instruments is found in 
Madagascar.
    Now, in connection with the trip, the Gibson representative 
received a translation of Madagascar inter-ministerial order 
16-030/2006, banning the harvest of ebony and the export of any 
ebony products that were not in finished form. The translation 
of the order received by the Gibson representative stated that 
the fingerboards are considered finished under Madagascar law. 
Participants in the Music Wood----
    Ms. Shea-Porter. OK, so--but what I----
    Mr. Larkin. So let me--I will stop the quote.
    Ms. Shea-Porter. No, because----
    Mr. Larkin. No, I understand. I am not trying to eat up 
your time. My point is----
    Ms. Shea-Porter. No. What I am asking--I think you are, 
actually. But what I am asking is if you say they don't speak 
English, they are not writing it in English, then the question 
has to be how on earth do they conduct business?
    Mr. Larkin. No----
    Ms. Shea-Porter. Somebody speaks English.
    Mr. Larkin. I didn't say no one speaks English. What I said 
was a lot of the laws that you can be held liable for 
violating----
    Ms. Shea-Porter. Are not in English.
    Mr. Larkin [continuing]. Are not in English. And this is an 
example of one.
    Ms. Shea-Porter. Right. But I do know that businesses are 
very savvy, and they know when they are signing contracts, that 
they want it in their language, that they weigh every word, 
they have attorneys, they have other business people. They know 
to weigh the words and understand what they are signing. And I 
know that they have lawyers who know how to do that.
    So I don't understand the argument that they don't speak 
English. And, if anything, that would make me think even more 
that they hadn't paid enough attention to those aspects of the 
law, which I think are just as critical as signing the contract 
for the trade. But----
    Mr. Larkin. Would you like me to respond to that?
    Ms. Shea-Porter. No, not yet. If I get another round, sure. 
But thank you.
    All right, Mr. Asner, can you talk to me about that 
lobster? Can you tell me, from your perspective----
    Mr. Asner. The McNab case?
    Ms. Shea-Porter [continuing]. The facts.
    Mr. Asner. Yes, it is sort of interesting, because you lose 
at the trial level, you lose at the court of appeals. Even 
before then you get another bite at the apple at the trial 
level. You lose at the court of appeals, you try and take it to 
the Supreme Court, you lose every step of the way. The jury 
finds the defendants guilty of knowingly violating these laws. 
That is upheld by the court of appeals. And you take it to the 
Supreme Court and then you lose there, so you bring it to 
Congress. And that is what is happening here.
    So, this hearing, or at least a good portion of this 
hearing, is devoted to people who have lost a case. And they 
lost a case because the evidence supports the prosecution.
    Some of the things that we haven't talked about, they 
intentionally falsified import documents using a secret code to 
disguise the true size of the illegal undersized lobster. After 
law enforcement intercepted one illegal shipment on its way to 
Alabama, the co-conspirators tried to circumvent law 
enforcement by putting lobster in a plane and flying it to LA. 
When they got caught doing that, they tried to move it to 
Panama and then fly it to Canada and come in through the 
northern borders. That is criminal behavior. They got caught. 
They were convicted. And that is the end of the story.
    Ms. Shea-Porter. Does that concern any of you? Did you not 
know that part of the story?
    Mr. Kamenar. I certainly do know part of the story, and a 
lot of it was left out by Mr. Asner. Namely that, again----
    Ms. Shea-Porter. But let me just ask you about that. Did 
Mr. Asner just tell the truth?
    Mr. Kamenar. No, he did not. He misrepresented the facts of 
the case.
    Mr. Asner. It is in the record.
    Mr. Kamenar. The point is that when this was first stopped 
at--the first shipment that came in, there was 6 months before 
the U.S. officials figured out what was wrong with this. In the 
meanwhile, the U.S. importers did not think there was anything 
wrong, but they figured if they can't get at what they thought 
were lawful shipments, they will go to another port, where 
California did not have a law with undersized lobster tails, 
and neither did Canada. So they were trying to carry out their 
business, in what they thought was in a lawful way, because 
they weren't told for 6 months what was----
    Ms. Shea-Porter. OK. All right. Mr. Asner, any comment, in 
all fairness?
    Mr. Asner. No, they were evading law enforcement. It is 
pretty plain. This was presented before the jury, and the jury 
found all the defendants guilty.
    Ms. Shea-Porter. OK. Thank you. I think that is a good 
point to yield back.
    Dr. Fleming. The gentlelady's time is up. Again, I have 
more questions. Would you all like another round, or just ask 
questions ad lib? How would you like--we will have another 
round. I will yield myself 5 minutes. I believe we are up to 
me, next.
    Let me understand kind of some central themes here. We have 
a situation where Americans who try to do business across our 
border with other nations are having to deal with very complex 
laws in other nations. Often they have an inability to get 
correct language description in English. And yes, somebody can 
be prosecuted by the law. And when you add the law to facts, if 
it is a bad law, you can send somebody to jail for a long time, 
or you can certainly extort their business or certainly extort 
some sort of plea agreement so that they can keep their 
business going. We know this happens all the time. And that may 
be constitutional, but it doesn't make it right. It does not 
make it right.
    For a man to go to prison for 8 years--and I don't care 
whether or not he mislabeled. I don't even care if he went to 
the wrong island first. To go to prison for 8 years over 
lobster tails, because of violations from another nation? That 
is absolutely absurd. And I understand that there are 
disagreements on the facts of that, and there is no point in 
going through that. It is immoral to send somebody to prison 
for 8 years for getting the lobster tails the wrong size.
    And we know that in the case of Gibson Guitar they were 
going to end up in bankruptcy if they didn't sign the deal. 
Nothing was proven in law. It never went to court, as far as I 
know.
    So, I would like to have some of your comments, gentlemen, 
as to what you think about the law, the morality--I mean, 
again, as an American, I understand that, when it comes to 
criminal law, at least, that the government has a heavy, heavy 
burden to make sure that the law is clear to me, that I get 
every advantage, I get my day in court of protection. I am not 
seeing this in the Lacey Act, particularly with the 2008 
amendments. So I would love to have your comments on this.
    Mr. Rubinstein. I will start. I would encourage all of you 
who have an interest in this to actually read the Gibson 
agreement, because it is--what they do is they admit to certain 
facts, but they do not admit to criminal culpability. And the 
fact of the matter is that armed agents went in, herded all the 
employees into rooms, guns drawn, about the Indian wood. And 
then, after a year and hundreds and hundreds and hundreds of 
thousands of dollars, just said, ``Never mind, ignore all 
that.'' It is wrong.
    There are two real big problems that need to be fixed with 
respect to Lacey. One, there is no reason that the government, 
whether it is Congress or the executive branch, can specify and 
provide a place where people can go and see what laws apply. 
And, two, there ought to be some intelligible principles for 
what appropriate behavior is. Congress does this all the time. 
Take a look at Title 22 of the U.S. Code, and a whole bunch of 
other laws. We do laws, we write regulations, we provide people 
with notice. Under Lacey we should do the same thing.
    Mr. Kamenar. I would like to follow up on that, and I agree 
that we should have this information published. In fact, as I 
said in my testimony, the government itself--and I have this as 
exhibit to my testimony--published a price list of these so-
called illegally sized lobster tails, letting the people know, 
``Here is what it costs for a two-ounce lobster tail from 
Honduras is $8.75.''
    And so, I am surprised that Mr. Asner, who, in his 
testimony, his written testimony at least, said, ``Oh, no, we 
should not have a data base. Consumers don't want that, that is 
not good for consumers.'' I would think consumers would want 
more information as to what is legal or not legal to be 
imported. But yet Mr. Asner apparently believes people should 
be kept in the dark.
    Dr. Fleming. Well, I would suggest--I mean we have talked 
about this before, Mr. Asner. You represent both plaintiffs and 
defendants, is that correct?
    Mr. Asner. That is correct, yes.
    Dr. Fleming. And so, the more difficult and the more 
complex the law, the more cases there are, the more legal 
activity there is, the better for business. Right?
    Mr. Asner. Your Honor, or Mr. Chairman, I don't actually 
represent anybody in this--any criminal defense. I represent--
--
    Dr. Fleming. But you are in private practice.
    Mr. Asner. I am in private practice----
    Dr. Fleming. And so you do charge fees for the consultant 
work, for legal advice----
    Mr. Asner. I think we all do. That is what lawyers do, 
right, in private practice?
    Dr. Fleming. OK. But we have these lawyers who are saying 
let's fix a bad law, make it simple, and subject Americans to 
less jeopardy. And you are saying, ``No, let's keep it the way 
it is and make it as difficult as possible. Hey, it is good for 
business.''
    Mr. Asner. That is not what I am saying. What I am saying, 
actually, is that the law, as it exists right now, makes a lot 
of sense. We could strengthen it. But right now, with the law--
--
    Dr. Fleming. Do you support the data base idea?
    Mr. Asner. No, I don't support the----
    Dr. Fleming. And why not?
    Mr. Asner. Because the data base idea is bad for American 
business, because what it does is it has some bureaucrat in 
Washington laying out the statutes that somebody has to follow. 
Whereas, if I am a company, I want to be the person who will 
decide whether it is illegal.
    We don't have a data base of foreign laws with respect to 
property, either. And yet it is illegal to----
    Dr. Fleming. So the less information available to 
Americans----
    Mr. Asner. No----
    Dr. Fleming [continuing]. The better for Americans?
    Mr. Asner. Absolutely not. Businesses are in the best 
position to decide for themselves how to do----
    Dr. Fleming. If they have the information, correct?
    Mr. Asner. Yes. And they are the ones who have that 
information.
    Dr. Fleming. My time is up. I yield to the gentleman, the 
Ranking Member.
    Mr. Sablan. Mr. Asner, apparently you are combative today. 
I see. But we have heard a lot of outrage today over the 
alleged injustice of the Lacey Act's foreign law provisions. So 
is the Lacey Act unique among U.S. laws for its use of foreign 
law violation as a predicate offense?
    Mr. Asner. Absolutely not. In fact, many U.S. laws 
incorporate foreign laws. I used the example in my oral 
testimony a moment ago about how if you have illegal stolen 
cattle and you bring it into the United States, that is a 
violation of law. There are many examples. Stolen goods are 
some, there are all sorts of import-export violations.
    The key to all of this--and this is very important, and I 
think the Chairman is missing this--is that the mens rea, the 
scienter, knowledge requirement, is what protects people here. 
If you don't know about the foreign law, and you have not 
violated the foreign law knowingly, you are not guilty. And 
that is constitutional. That has been in the Lacey Act for 
decades. And nobody has really complained about that until now.
    Mr. Sablan. Yes. Yes, I have one more question for Mr. von 
Bismarck.
    Shark finning is a serious problem that destroys marine 
ecosystems and the economies of coastal communities that depend 
on healthy fisheries, including the Northern Marianas, where I 
come from. So do the Lacey Act's foreign law provisions have 
the ability to support the conservation efforts of other 
countries that ban shark finning in their waters?
    Mr. von Bismarck. Absolutely. It is absolutely critical. I 
mean some of that might be on CITES, but CITES is a mechanism 
that is based on paperwork. And a lot of the problem is you can 
fake paperwork. And for prosecutions to be effective, the fact 
that the Lacey Act says if you broke a law overseas and you 
illegally shark-finned overseas--we do not want to create a 
market for that here--is absolutely critical to support a 
variety of states that are trying to get that problem under 
control.
    Mr. Sablan. OK. So we are going to go back to China 
earlier, because you said--the wood you are seeing in China is, 
good business practice, transparency, and, so what are you 
seeing in China, but why do you think illegal logging in Russia 
hurts the United States, U.S. businesses?
    Mr. von Bismarck. It is particularly pernicious for U.S. 
businesses, because it happens to be the same kind of trees, 
the same kind of timber that we produce here. So you could buy 
your oak from a tiger habitat in the Russian Far East, or you 
could buy it from family owned lands in the Eastern United 
States. And that is, right now, at the tipping point. And 
because of Lacey, we have a chance to make U.S. forests more 
valuable in the international marketplace.
    We are seeing those changes happen right now in Chinese 
factories, as I discussed. But it will backtrack in a heartbeat 
if a signal comes--everyone is looking at the U.S. and the 
implementation of the Lacey Act, and wondering if it will 
continue, and if it will be strong. And if we send a signal 
that we are not interested in implementing the foreign law 
provisions, or scaling it back in some way, we will hurt 
American business in that way.
    Mr. Sablan. All right. My first CODEL was flying into the 
island of Espanola, and you just realize that half of the 
island is lush forests and the other half was barren 
deforestation, a lot of corruption and illegal logging. I am 
not sure if we took part in any of that. Maybe we didn't, we 
didn't buy any of those logs. But that is why we need laws. And 
we must respect.
    But, Mr. Chairman, I yield back my time.
    Dr. Fleming. The gentleman yields back. Ms. Shea-Porter is 
recognized for 5 minutes.
    Ms. Shea-Porter. Thank you, Mr. Chairman. So, hearing how 
difficult this is, I asked my staffer to Google the Lacey 
amendment. And, lo and behold, within about 30 seconds it tells 
you where to go if you need help. And I just wondered if that 
seemed too difficult to Google it and get there for your 
clients that seem to have trouble. There is an actual address 
to go to.
    Mr. Rubinstein. If you go, and this is laid out in some 
detail in the written testimony, so forgive me if it is 
repetitive a little bit, but the government does not provide 
hard information about what is or isn't permitted behavior. The 
Justice Department did a presentation where they put a Power 
Point up. And it provided ``guidance'' on how to comply with 
Lacey. And the guidance was to be charitable, less than 
specific, and not terribly helpful, at least according to the 
Justice Department's own admission, the idea being that due 
care is going to differ in every circumstance.
    This is not how we typically enforce our laws. Generally, 
we tend to be a little more specific. And it is really not a 
lot to ask, I don't think, the government to provide some 
metrics for behavior. That would, according to CRS, by the way, 
improve Lacey enforcement. I don't think anybody objects to an 
effective Lacey Act. I think what we are trying to do is get to 
a better place than where we are now, that, on the one hand, 
achieves the wonderful goals that we hear from over here, but 
on the other hand prevents situations like we had in Gibson, 
where you have armed agents coming in and then the government 
afterwards saying, ``Oh, Never mind.''
    Ms. Shea-Porter. But that wood was clearly on the list. I 
mean that wasn't vague, it wasn't unknown.
    Mr. Rubinstein. Well, there are two, without getting too 
much into the weeds, there are two situations in Gibson, one 
related to Madagascar, one related to India. And the Madagascar 
wood is laid out in some detail in here, exactly what was 
agreed to and what wasn't. The Indian wood, though, the 
government said, ``Oops, Never mind, we made a mistake.''
    Ms. Shea-Porter. OK. So let me follow up by asking both of 
you, please, what do you think about that? You talk to people 
around the world, I am sure. You must have to communicate in 
English, or whatever language, about these rules and 
regulations and protections. And how is that going? Are the 
people that you talk to, your counterparts in other parts of 
the world, pretty clear on the rules? And how about you?
    Mr. von Bismarck. Well, I tried. But I think it is clearly 
an accurate point that the people that are overseas, whether it 
is a U.S. company or whether it is myself as an investigator, 
know better what the situation is than a bureaucrat in 
Washington.
    And I think the Lacey Act, as structured right now, already 
takes, due to the due care standard, takes account of the fact 
that, if you cannot know, if it is difficult for you to know 
because you are a mom-and-pop shop making furniture in the 
United States, you don't need to know.
    And so I think, I very much take Mr. Asner's point that it 
might be that there are many companies in the United States 
that would not want a declarative list of what foreign laws 
they are responsible for, in light that the current law exempts 
them from being responsible for that. So I am quite surprised 
that is the position being put forward.
    I am also surprised that or rather I am not surprised that 
every description of an improper so-called raid on Gibson 
focuses on the India case. The India case was in the context of 
the Madagascar case going on, which, as you describe, had an 
extraordinarily clear circumstances of knowing import of 
illegal wood. And so I think it is not a particularly, from my 
point of view, unreasonable form of prosecution, that if you 
just sped by recklessly, at 110 miles an hour, that then you 
are pulled over the next time also, when you go with the same 
car 20 miles an hour over the speed limit. It seems to be an 
entirely reasonable way that things run forward.
    And in the enforcement agreement, Gibson says, ``We knew 
that logging was illegal since 2006. We knew that export was 
illegal, and we continued to import it.''
    Ms. Shea-Porter. So, Mr. von Bismarck, what you are saying 
is, that line from the movie, ``I am shocked, shocked,'' is 
actually somewhat the truth here, as well, that----
    Mr. von Bismarck. Yes.
    Ms. Shea-Porter. That they should know, that there are 
certain things that you do know. And if you are a small mom-
and-pop, then it is, you don't need to read, like, every single 
line all the way through, because it probably doesn't apply to 
you, that we are talking about larger importers, right, that 
should know.
    Mr. von Bismarck. Absolutely. The supplier to Gibson in 
this case was working exclusively with that timber boss, Mr. 
Tuman, in Madagascar, for 15 years. He set him up. Every detail 
of his operation was known by the supplier, by the company 
called Nagel in Germany that directly dealt with Gibson. And, 
on top of that, the representative of Gibson actually went to 
that boss's yard at a time when all of the wood in the yard was 
seized. He saw it seized. And there are a variety of other sort 
of absolutely obvious examples for why that wood was illegal. 
Thank you.
    Ms. Shea-Porter. Thank you. And I yield back. Thank you for 
the extra time.
    Dr. Fleming. The gentlelady yields back. I am going to go 
through one more set of questions, and I think we can call it a 
day after that, after we are done with our next panel. I 
recognize myself for 5 minutes.
    Well, here are the conclusions I draw from the facts in the 
testimony, that indeed the Lacey Act, particularly with the 
2008 amendments, opens up Americans to be subject to foreign 
laws, up to and including Sharia law. Although that may not be 
a clear and present danger today, it is something to think 
about with future laws.
    It is also clear that those rules, regulations, and laws 
from other nations are often unclear and unintelligible, which 
I think is a very dangerous thing for Americans.
    But I am also bothered by the fact that if the government 
fouls up, nothing happens to the government. But if the 
government fouls up, the American is screwed. And I am very 
bothered by that. And we have a growing, growing government, 
like cancer today. And whenever it misses its deadlines, as we 
are seeing happening with all kind of laws today, Obamacare, 
Dodd-Frank, you name it, we are missing all kind of deadlines, 
nothing happens. But if something goes wrong, the American, the 
individual American, pays the price.
    So, I am going to yield the last 3-point-whatever minutes 
that I have to you gentlemen on this side to explain to me how 
do we fix the Lacey Act to make it right?
    Mr. Kamenar. Well, as I said in my testimony, I think the 
first thing Congress needs to do is assert its legislative 
authority. And if it wants to include foreign regulations in 
the Lacey Act, for goodness sakes, say so. Congress said so 
with respect to U.S. laws and regulations, State laws and 
regulations. And the Indian tribal law and their regulations. 
But it just said ``foreign law.'' So, step number one, put that 
in there.
    Step number two, decriminalize the statute. And you can use 
forfeiture all you want. You can impose civil penalties. But 
for cases like McNab and others, where there is this heavy 
Draconian criminal sense, I think, is outrageous.
    And, number three, I still can't understand why no one 
would, why Mr. Asner and his supporters object to a data base. 
We have, with CITES and others, we list all the things that you 
can't--that are on the endangered species list and so forth. 
More information is better than less. And I think that is one 
thing we should do.
    Mr. Larkin. Of the four recommendations I mentioned 
earlier, two directly speak to the problem you are now dealing 
with. One would be to require that the government prove that 
someone acted willfully. That is, someone intended to flout the 
law. Someone knew that the law prohibited what he or she was 
doing, but went ahead and did it, nonetheless.
    In the alternative, rather than require the government to 
prove that, you could allow the defendant to raise a defense of 
mistake of law. If no reasonable person would have thought that 
what the defendant did was a crime, the defendant would be 
exonerated. That would put the burden on the defendant, rather 
than the government, but it would also deal with the same 
problem: someone who reasonably believes that he or she is 
complying with the law, and nonetheless can get caught up in 
the criminal justice system.
    Mr. Rubinstein. ILR believes that Congress needs to take a 
hard look at Lacey, determine whether there is an appropriate 
threshold mens rea requirement, whether the statute adequately 
defines both the guilty act and the mens rea for the offense in 
specific and unambiguous terms, and clearly states whether the 
mens rea requirement applies to all of the elements of the 
offense, or, if not, which apply to the elements of the 
offense, sets limits on enforcement discretion, and, most 
importantly incorporates performance metrics required for 
meaningful oversight.
    We need to do something about the foreign law trigger. 
Whether that is done by statute or administratively, there 
needs to be a place that people can go to find out what laws 
apply. There needs to be a place people can go to get, at least 
in broad strokes, what the metrics for acceptable performance 
are between proscribed and permitted conduct. This would help 
enforcement, it would streamline compliance. And, oh, by the 
way, it is what our Constitution and our legal norms require.
    We support the Lacey Act, but the way it is being done now 
is just wrong.
    And there is one thing I cannot let go. We heard about a 
so-called raid. The agents were not carrying so-called rifles. 
Those were real rifles. And the people who were rounded up were 
not so-called people, they were real people. And we have armed 
agents going into guitar factories over something that the 
government determined, a bureaucrat in Washington set that into 
motion. So, please, let's make it clear where everybody, then, 
where there is transparency, where there is government 
accountability, and where you don't have a bureaucrat sitting 
in an office somewhere talking to some NGO with the ability to 
send armed agents into Americans' workplaces and homes. That is 
wrong. That should not stand.
    Dr. Fleming. Well, thank you, gentlemen. That about says it 
all for me. And I will yield 5 minutes to Ms. Shea-Porter.
    Ms. Shea-Porter. Thank you. Sitting next to a former 
bureaucrat, I hope you would be a little more sensitive to him. 
And I would like to know right now. How many people have worked 
for the government on the panel? Raise your hand, please, if 
you have been a bureaucrat.
    Isn't that wonderful? And the taxpayers got their money's 
worth out of you. And we thank you. You are obviously smart, 
well educated, and have a lot of experience. So we thank you 
for your service. And I----
    Mr. Rubinstein. Yes, we do. We thank them for their 
service.
    Ms. Shea-Porter. I would appreciate if maybe, a few less 
whacks at bureaucrats would be nice.
    Mr. Rubinstein. That is a fair comment.
    Ms. Shea-Porter. Now, I also heard a comment about the 
government. So, let me start with Mr. Asner. Were there any 
juries involved here? Is it always the big, bad government, or 
did a jury of the peers ever say anything?
    Mr. Asner. McNab had a jury of the peers. And with a lot of 
these cases there are negotiations. And if you look, for 
example, in Gibson, they keep on talking about Gibson in fact, 
the agreement that they talk about there, they actually concede 
that they knew in emails, in a report that went up to Gibson 
from their agents on the ground, that it is currently illegal 
to harvest or export ebony from Madagascar.
    Gibson entered into a criminal enforcement agreement that 
gave them the right to not be prosecuted as part of an 
agreement, because the government, in its grace, decided not to 
prosecute them. But they could have, under these facts.
    Ms. Shea-Porter. OK. So we have had a combination of 
government and also a jury of peers looking at this.
    And then I wanted to add one more comment. When you talk 
about not making it criminal, but rather making it just a civil 
penalty, and you find a group that could pay pretty much any 
kind of penalty, and yet they are working with criminals, 
often, doing this, then it is pretty naive to say, well, you 
just have to pay a little bit of cash. But the underlying 
problem is that they are working with criminals that are doing 
terrible things.
    So, I think I will give Mr. von Bismarck the last chance to 
talk about that. You are aware of some criminal activity, no 
doubt. I am talking about overseas, using the import-export----
    Mr. von Bismarck. Yes. I mean forests mean a lot of 
different things to a lot of different people in this case. 
And, unfortunately, it is a good place to hide for insurgents, 
is one of the things it means. And a good place to finance 
those insurgencies. You have ready-made trees that are very 
valuable on the international market, if there are no questions 
asked about those trees.
    And so, as I mentioned before, we have very acute current 
examples of that, where U.S. servicemen are in the line of 
danger, where the killing of Americans is being financed by 
illegal logging, and by the fact that countries are not asking 
questions about whether foreign laws were being broken. I am 
glad to hear we actually, it seems like no one on this panel is 
actually against foreign, the concept of foreign laws being 
important, and I find that very encouraging. I wasn't expecting 
that.
    But I think it is also very dangerous if we send a signal, 
because we are talking about the specifics, that we are going 
to scale back. We are going to lose our chance right now to 
address serious international, increasingly sophisticated 
organized crime and the funding of terrorism.
    Mr. Asner. May I add something?
    Ms. Shea-Porter. Yes.
    Mr. Asner. Yes. Look. The fact that the Lacey Act is 
criminal is crucially important, because the criminal part of 
it reflects the serious nature of this and the criminal 
behavior of this.
    And let me give you an example from the case that I 
prosecuted, the Bengis case. That was, as I mentioned before, a 
massive scheme for decades to over-harvest rock lobster and 
bring it into the United States. At one point, and they had all 
sorts of shenanigans to hide it, and they just raped the 
economy of South Africa, or at least the fish in South Africa, 
at one point one of Arnold Bengis's lieutenants said to him, 
``What will happen if you get caught?'' And this is in the 
record, and I apologize for my language. His response was, ``I 
will never get caught. I have f-you money.'' And that is what 
happens when you have just civil violations, is that somebody 
has f-you money, and can make it go away.
    Ms. Shea-Porter. OK. Well, I am trying to breath again.
    [Laughter.]
    Ms. Shea-Porter. But let me just say that I think the point 
is made across the board that we can't just put a civil 
penalty, because it is not enough. It has to be prosecuted as a 
crime.
    Mr. Kamenar. If I could just comment on that, I mean, if it 
is such a crime in South Africa, why don't we just extradite 
these guys back to South Africa, where the crime took place? We 
can have extradition treaties with all these countries.
    Mr. Asner. That is reflected in the record repeatedly. The 
South Africans weren't able to do this, and these people were 
American citizens living in New York City and Maine.
    Ms. Shea-Porter. Well, I thank you and I yield back.
    Dr. Fleming. The gentlelady's time is up. I believe we have 
had all of our questions answered.
    I do thank the panel today. I think we learned a lot of 
very valuable information. I am personally convinced that this 
law needs some very significant changes. I think that we took a 
wrong direction back in 2008, in particular, and I really look 
forward to working with my colleagues on this.
    Members of the Subcommittee may have, and I am pretty sure 
will have, additional questions for the witnesses, and we will 
ask for you to respond to these in writing.
    The hearing record will be open for 10 days to receive 
these responses.
    Before closing, I must say that, based on our own 
investigation and that of the Library of Congress, it is 
stunning that nowhere in the Committee hearings, Committee 
reports on the Floor debate on the Migratory Bird Hunting Stamp 
Act of 1935, is there any legislative history on why the 74th 
Congress felt it was necessary to force American citizens to 
comply with the laws of foreign nations. It was almost as if 
this provision was simply added as an afterthought.
    And, again, unintended consequences. Everything we do up 
here can morph into something very ugly.
    And the sponsors did not feel this historic change merited 
an explanation, in fact. Instead, what has happened is that the 
Federal courts, particularly the 9th circuit court of appeals, 
has been more than happy to fill that legislative void by ever 
expanding the scope of foreign laws and thereby increasing the 
likelihood that Americans will lose their property and/or 
freedom for violating an obscure foreign law.
    I ask unanimous consent to submit for the record a legal 
memorandum prepared by Mr. Paul J. Larkin, Jr. of the Heritage 
Foundation.
    [No response.]
    Dr. Fleming. Hearing no objection, so ordered.
    [The information submitted by Dr. Fleming for the record 
has been retained in the Committee's official files:]
    Dr. Fleming. I want to thank Members and the staff for 
their contributions to this hearing. If there is no further 
business, without objection, the Subcommittee stands adjourned.
    [Whereupon, at 4:45 p.m., the Subcommittee was adjourned.]

    [Additional material submitted for the record follows:]

    The documents listed below have been retained in the 
Committee's official files.

      American Forest & Paper Association, ``Written 
Testimony on the 2008 Lacey Act Amendments.''
      Executive Order 13648--Combatting Wildlife 
Trafficking
      International Fund for Animal Welfare, ``Criminal 
Nature: The Global Security Implications of the Illegal 
Wildlife Trade.''
      Larkin, Paul--article entitled, ``The Injustice 
of Imposing Domestic Criminal Liability for a Violation of 
Foreign Law''
      Letter from the Honorable Ted Yoho, Member of 
Congress from the State of Florida
      On Petition for Writ to the United States Court 
of Appeals for the Eleventh Circuit, ``Robert B. Blanford, 
Abner Schoenwetter, and Diane H. Huang v. the United States of 
America.''
      Senate Select Committee on Intelligence, 
``Worldwide Threat Assessment of the U.S. Intelligence 
Community.''
      United States Department of Commerce, National 
Oceanic and Atmospheric Administration, National Marine 
Fisheries Service, ``New York Frozen Seafood Prices.''
      United Nations: Security Council, ``Report of the 
Secretary-General on the Activities of the United Nations 
Regional Office for Central Africa and on the Lord's Resistance 
Army-affected areas.''

                                 
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