II 118th CONGRESS 1st Session S. 3371 IN THE SENATE OF THE UNITED STATES November 30, 2023 Mr. Schatz (for himself and Mr. Braun ) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To combat illegal deforestation by prohibiting the importation of products made wholly or in part of certain commodities produced on land undergoing illegal deforestation, and for other purposes.

1. Short title This Act may be cited as the Fostering Overseas Rule of law and Environmentally Sound Trade Act of 2023 or the FOREST Act of 2023 . 2. Findings; sense of Congress (a) Findings Congress makes the following findings: (1) According to the Food and Agriculture Organization of the United Nations, 31 percent of land on earth is covered in forests, but that area is rapidly decreasing. An estimated 1,600,000 square miles of forest has been converted to other land uses since 1990, with 42,500 square miles converted annually since 2010. Since the early 2000s, 2/3 of global forest cover loss has occurred in the tropics and subtropics. (2) At least 69 percent of tropical forest conversion into commercial agriculture uses between 2013 and 2019 was carried out in contravention of the laws of the country in which the conversion occurred. (3) Such illegal forest conversion results in the emission of more than 2.7 gigatons of carbon dioxide equivalent per year, more than the entire annual fossil fuel emissions of India in 2018. (4) The global increase of average temperatures can be mitigated by natural climate solutions like rapid and significant reductions in deforestation globally. Cost-effective greenhouse gas emission mitigation from forests and land use can provide roughly 1/3 of the mitigation required by 2030 to hold the increase in the global average temperature below 2 degrees Celsius above pre-industrial levels. (5) Forests contain most of the world’s terrestrial biodiversity, providing habitats for 80 percent of amphibian species, 75 percent of bird species, 68 percent of mammal species, and 60,000 different species of trees. (6) Forests are also an important source of livelihoods, food, and fuel, with more than 1,600,000,000 people depending directly on forests for their livelihoods. (7) The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services found in 2019 that the rate of global species extinction is accelerating and is now tens to hundreds of times higher than the average rate over the last 10,000,000 years, threatening the loss of 1,000,000 species, and illegal land-use change has an overwhelming relative impact on terrestrial ecosystems. (8) Illegal deforestation in many countries is closely associated with violations of the rights of indigenous peoples and local communities and with the exploitation of workers, including through the use of forced labor and child labor, and in many cases is enabled by corruption, criminality, and violence against individuals defending their land rights. (9) Congress has taken a number of steps to address the trade in illegal timber to protect legitimate forestry businesses and reduce illegal logging globally, such as, in section 8204 of the Food, Conservation, and Energy Act of 2008 ( Public Law 110–246 ; 122 Stat. 2052), amending the Lacey Act Amendments of 1981 ( 16 U.S.C. 3371 et seq. ) to prohibit the importation of illegal plant products, including such products made from illegally logged wood. (10) As with illegal timber, agricultural commodities produced on illegally deforested land enter international markets, including the United States, and compete with commodities produced legally. (11) The United States is a significant market for products made wholly or in part of commodities such as palm oil, cattle, cocoa, and rubber at risk of being produced on illegally deforested land. For example, in 2022, the United States imported— (A) processed cowhides and beef products valued at more than $1,100,000,000 from Brazil, where a recent study estimated 95 percent of deforestation was not in full compliance with applicable laws; and (B) crude palm oil and palm kernel oil valued at more than $2,600,000,000 and oleochemicals commonly derived from palm oils valued at more than $900,000,000, from Indonesia, where government audits of the sector in recent years have indicated widespread noncompliance with applicable laws regarding deforestation. (12) The lack of traceability in the supply chains for such commodities and the absence of importer due diligence requirements increases the risk that United States trade is associated with illegal deforestation and human rights abuses, preventing United States consumers from knowing where or how the goods they purchase were produced and putting companies that ensure legal sourcing at a competitive disadvantage. (b) Sense of Congress It is the sense of Congress that the United States must do more to address illegal deforestation, including— (1) avoiding trade that incentivizes foreign governments to allow illegal deforestation; (2) assisting foreign governments in eliminating illegal deforestation and limiting all deforestation to the extent practicable; (3) requiring that goods entering the United States market be subject to requirements, including the necessary supply chain traceability, to reduce the risk of association with illegal deforestation; (4) preventing the United States financial system from being used to launder proceeds from illegal deforestation; and (5) providing procurement preference incentives to suppliers of the Federal Government to adopt and implement policies to eliminate goods produced on deforested land from their supply chains. 3. Prohibition on importation of commodities produced on illegally deforested land and products made from such commodities (a) In general The Tariff Act of 1930 is amended by inserting after section 527 ( 19 U.S.C. 1527 ) the following: 527A. Prohibition on importation of products made wholly or in part of commodities produced on illegally deforested land (a) In general It shall be unlawful for any person to import any product made wholly or in part of a covered commodity produced on land that undergoes illegal deforestation on or after the date of the enactment of the FOREST Act of 2023 . (b) Import declarations (1) In general On and after the date that is one year after the date of the enactment of the FOREST Act of 2023 , and subject to paragraph (2), a person may not import a covered product unless the person files electronically upon entry a declaration stating that the person has exercised reasonable care to assess and mitigate the risks that any covered commodity used to make the covered product was produced on land subject to illegal deforestation on or after such date of enactment. (2) Covered commodities from countries under an action plan On and after the date that is one year after an action plan applicable to a foreign country is finalized under subsection (d)(2), a person may not import a covered product containing any covered commodity produced in the country and identified in the action plan unless the person files upon entry a declaration that includes sufficient information to show— (A) (i) the supply chain and the point of origin of the covered commodity; and (ii) steps taken to assess and mitigate the risks that the point of origin was subject to illegal deforestation on or after the date of the enactment of the FOREST Act of 2023 ; or (B) (i) all possible points of origin that could have contributed to the supply chain of the covered commodity, if mixing or points of aggregation exist within the supply chain; and (ii) steps taken to assess and mitigate the risks that any possible points of origin were subject to illegal deforestation on or after such date of enactment. (3) Guidance Not later than 90 days after the date of the enactment of the FOREST Act of 2023 , and as appropriate thereafter, the Secretary of Homeland Security— (A) shall publish guidance on what constitutes reasonable care under paragraph (1) and sufficient information under paragraph (2), which may include guidance with respect to specific commodities, as appropriate; and (B) may, as appropriate, issue guidance about the potential role of third-party certifications assisting importers with meeting the requirements of this section. (4) Trusted trader program (A) In general Not later than one year after the date of the enactment of the FOREST Act of 2023 , the Commissioner of U.S. Customs and Border Protection (in this section referred to as the Commissioner ) shall establish a program to streamline the requirements of this section for importers that have demonstrated— (i) a transparent and credible due diligence system; and (ii) a track record of compliance, supply chain traceability and transparency, and sourcing of products not made wholly or in part of a covered commodity produced on land that undergoes illegal deforestation. (B) Audits The Commissioner shall carry out, and publish the results of, regular, random audits of participants in the program established under subparagraph (A)— (i) to assess the compliance of participants with the requirements of the program; and (ii) to terminate the participation in the program of participants found to be in violation of those requirements. (C) Requirements for participants Each participant in the program established under subparagraph (A) shall make up-to-date information on implementation of due diligence systems and supply chains publicly available to facilitate third-party monitoring. (D) Continued compliance Participation in the program does not remove any obligation of a participant to comply with the requirements of subsection (a) or paragraph (1) or (2). (E) Consultations The Commissioner shall establish the program under subparagraph (A) in consultation with— (i) the interagency working group established under subsection (f); (ii) the advisory committee established under subsection (g); and (iii) the public. (c) Lists of covered commodities and covered products (1) Initial lists Not later than 30 days after the date of the enactment of the FOREST Act of 2023 , the United States Trade Representative (in this section referred to as the Trade Representative ) shall publish the following: (A) An initial list made up of the following commodities (in this section referred to as covered commodities ): (i) Palm oil. (ii) Soybeans. (iii) Cocoa. (iv) Cattle. (v) Rubber. (B) An initial list made up of the following products made wholly or in part of a covered commodity (in this section referred to as covered products ): (i) Palm oil or palm oil products classifiable under any of the following headings or subheadings of the HTS: 1511 2905.17.00 3823.11.00 1513.21.00 2905.45.00 3823.12.00 1513.29.00 2915.70.01 3823.19 2306.60.00 2915.90 3823.70. (ii) Soybeans or soybean products classifiable under heading 1201 or 1507 or subheading 2304.00.00 of the HTS. (iii) Cocoa or cocoa products classifiable under heading 1803 or 1806 or subheading 1801.00.00, 1802.00.00, 1804.00.00, or 1805.00.00, of the HTS. (iv) Cattle or cattle products classifiable under any of the following headings or subheadings of the HTS: 0201 0206.21.00 1602.50 0202 0206.22.00 4104 0206.10.00 0206.29.00 4107. (v) Rubber or rubber products classifiable under heading 4001 or 4011 of the HTS. (2) Reviews and updates (A) In general Not less frequently than annually, the Trade Representative shall— (i) review the list of covered commodities published under subparagraph (A) of paragraph (1) and the list of covered products published under subparagraph (B) of that paragraph to assess whether covered commodities or covered products, as the case may be, should be added to or removed from the lists to ensure that the scope of the lists is sufficient to deter illegal deforestation and to ensure that neither commodities produced in the United States nor imported commodities that were not produced on illegally deforested land are displaced by imported commodities produced on illegally deforested land; (ii) consult and solicit relevant information from the interagency working group established under subsection (f) and the advisory committee established under subsection (g) regarding the list of covered commodities published under subparagraph (A) of paragraph (1) and the list of covered products published under subparagraph (B) of that paragraph; and (iii) publish updated lists based on the review under clause (i) and the consultation under clause (ii). (B) Exclusions from updates (i) Additions The Trade Representative may not add under subparagraph (A) to the list of covered commodities published under paragraph (1)(A) a commodity for which an import declaration is required under section 3(f) of the Lacey Act Amendments of 1981 ( 16 U.S.C. 3372(f) ). (ii) Removals The Trade Representative may not remove a commodity under subparagraph (A) from the list of covered commodities published under paragraph (1)(A) solely because an import declaration is required under section 3(f) of the Lacey Act Amendments of 1981 ( 16 U.S.C. 3372(f) ) with respect to the commodity. (C) Effect on import declarations Any addition under subparagraph (A) to the list of covered products under paragraph (1)(B) shall be subject to the declaration requirement under subsection (b) on and after the date that is one year after the updated list including the addition is published. (d) Action plans for countries without adequate and effective protection against illegal deforestation (1) Identification of countries (A) In general Not later than 180 days after the date of the enactment of the FOREST Act of 2023 , the Trade Representative shall— (i) identify foreign countries without adequate and effective protection against illegal deforestation for the production of commodities likely to enter the United States; and (ii) publish in the Federal Register— (I) a list of the countries identified under clause (i); and (II) data and analysis related to the considerations described in subparagraph (B). (B) Considerations In identifying a foreign country under subparagraph (A), the Trade Representative shall consider— (i) trends in illegal deforestation in that country; (ii) whether policies and practices of the government of the country provide adequate and effective enforcement against illegal deforestation; (iii) trends in the capacity and effectiveness of enforcement against illegal deforestation by the country; and (iv) the incidence of violence against, and other violations of the rights of, indigenous peoples and local residents in the country in connection with illegal deforestation. (C) Reassessment Not less frequently than every 2 years, the Trade Representative shall assess whether additional foreign countries should be identified under subparagraph (A). (2) Action plans (A) In general The Trade Representative shall publish in the Federal Register an action plan with respect to each foreign country identified under paragraph (1) not later than 2 years after the date on which the country is identified under that paragraph. (B) Involvement of foreign country and public The Trade Representative shall— (i) seek to involve each foreign country for which the Trade Representative develops an action plan under subparagraph (A) in the development of the action plan for that foreign country; and (ii) publish in the Federal Register a draft of each action plan for public review and comment before publishing the action plan under subparagraph (A). (C) Goals of action plans The Trade Representative shall design an action plan developed under subparagraph (A) with respect to a foreign country to achieve adequate and effective protection against illegal deforestation, including by— (i) instituting policies and practices to prevent illegal deforestation; (ii) ensuring sufficient capacity to enforce relevant laws; (iii) establishing processes to adjudicate and remedy previous illegal deforestation activities; (iv) ensuring comprehensive monitoring, transparency, and data sharing related to land ownership and use, deforestation, and potential impacts to other ecosystems; and (v) promoting traceability, transparency, and data sharing for commodity supply chains. (D) Benchmarks The Trade Representative shall include in each action plan developed under subparagraph (A) intermediate and final benchmarks, including such legislative, institutional, enforcement, or other actions as the Trade Representative determines to be necessary to demonstrate that the foreign country has achieved the goals described in subparagraph (C). (E) Identification of covered commodities The Trade Representative shall identify in the action plan developed under subparagraph (A) with respect to a foreign country the specific covered commodities at risk of being produced on illegally deforested land in that country that shall be subject to the declaration requirement under subsection (b)(2). (3) Petitions for determination of compliance (A) In general A foreign country to which an action plan developed under paragraph (2)(A) applies may petition the Trade Representative to determine that the country has achieved all benchmarks in the action plan and therefore provides adequate and effective protection against illegal deforestation. (B) Determination of adequacy and effectiveness of protection (i) Countries that provide adequate and effective protection against illegal deforestation If the Trade Representative determines under subparagraph (A) that a foreign country to which an action plan developed under paragraph (2)(A) applies has achieved all benchmarks in the action plan to provide adequate and effective protection against illegal deforestation, the action plan shall terminate. (ii) Countries that fail to provide adequate and effective protection against illegal deforestation If the Trade Representative determines under subparagraph (A) that a foreign country to which an action plan developed under paragraph (2)(A) applies has not achieved all benchmarks in the action plan, the action plan shall remain in force. (e) Enforcement (1) Administration (A) In general The provisions of this section and any regulations issued under this section shall be enforced, as appropriate, by the Commissioner, the Secretary of Agriculture, the Secretary of the Interior, and the Attorney General. (B) Audits The Commissioner, in collaboration with the heads of other Federal agencies, shall conduct random audits of importers filing declarations under subsection (b)(1) to ensure such importers are retaining the supporting documentation demonstrating reasonable care was exercised as required by that subsection. (C) Agreements An official specified in subparagraph (A) may enter into an agreement with any other Federal agency or any State agency or Indian Tribe under which that official may use, with or without reimbursement (as determined by the head of the relevant agency or Indian Tribe), the personnel, services, and facilities of the agency or Indian Tribe for the enforcement of this section and regulations issued under this section. (D) Availability of information Not later than one year after the date of the enactment of the FOREST Act of 2023 , the Commissioner shall develop a process to make information filed with a declaration required by subsection (b)(2) (other than information considered to be confidential business information) available to the public. (2) Coordination of enforcement The Commissioner shall share declarations filed under subsection (b) and other information received by U.S. Customs and Border Protection with the Trade Representative, the Secretary of Agriculture, the Secretary of the Interior, the Attorney General, and the heads of other Federal agencies as needed to ensure effective enforcement of this section. (3) Notice to importers Before taking any enforcement action with respect to an importer suspected of violating subsection (a) or (b), the Commissioner shall— (A) notify the importer of the suspected violation; and (B) provide the importer with an opportunity to provide additional information to demonstrate that the importer is in compliance with subsections (a) and (b). (4) Information from outside sources Not later than 180 days after the date of the enactment of the FOREST Act of 2023 , the Commissioner shall establish a process for receiving information from persons outside U.S. Customs and Border Protection indicating that a covered commodity may be being imported in violation of this section. (5) Report required Not later than 2 years after the date of the enactment of the FOREST Act of 2023 , and annually thereafter, the Commissioner, with input from the heads of relevant Federal agencies, shall submit to Congress a report on the enforcement of this section that includes, for the year preceding submission of the report— (A) the number of audits conducted by Federal agencies of importers of record to detect potential violations of this section; (B) the number of instances in which information was submitted to the Commissioner under paragraph (4); (C) the number of investigations initiated into possible violations of this section; (D) the number of notices to importers under paragraph (3) with respect to such violations; (E) the number of such investigations initiated based on information submitted to the Commissioner under paragraph (4); (F) the results of cases adjudicated following such an investigation; (G) the number of such investigations pending as of the date of the report; and (H) an explanation of how information submitted to the Commissioner under paragraph (4) was used to prioritize audits and other checks. (f) Interagency working group (1) In general There is established an interagency working group to provide advice and recommendations to the Trade Representative, the Commissioner, and the heads of other relevant Federal agencies on the implementation of this section. (2) Membership The interagency working group established under paragraph (1) shall be composed of representatives of— (A) the Department of State; (B) the Department of Agriculture; (C) U.S. Customs and Border Protection; (D) the Office of the United States Trade Representative; (E) the United States Agency for International Development; (F) the Department of the Interior; (G) the Department of Justice; and (H) such other Federal agencies as the Trade Representative considers appropriate. (3) Chairperson The representative of the Office of the United States Trade Representative shall serve as the chairperson of the interagency working group established under paragraph (1). (g) Advisory committee (1) In general The Trade Representative shall establish an advisory committee to provide advice and recommendations to the Trade Representative and the heads of other relevant Federal agencies on the implementation of this section. (2) Membership The advisory committee established under paragraph (1) shall be made up of 14 individuals— (A) 5 of whom shall be representatives of institutions of higher education or nongovernmental organizations with expertise relevant to international deforestation, associated human rights abuses, or trade; (B) 4 of whom shall be representatives of the covered commodity industry; (C) 3 of whom shall be representatives of the covered product industry; and (D) 2 of whom shall be representatives of labor organizations. (h) Consistency with international agreements This section shall be applied in a manner consistent with the obligations of the United States under international agreements. (i) Definitions In this section: (1) Deforestation The term deforestation means a loss of natural forest resulting from the whole or partial conversion of natural forest to— (A) agricultural use or another non-forest land use; or (B) a tree plantation. (2) HTS The term HTS means the Harmonized Tariff Schedule of the United States. (3) Illegal deforestation The term illegal deforestation means deforestation conducted in violation of the law (or any action that has the force and effect of law) of the country in which the deforestation is occurring, including— (A) anti-corruption laws; (B) laws relating to land tenure rights; and (C) laws relating to the free, prior, and informed consent of indigenous peoples and local communities. (4) Indian tribe The term Indian Tribe has the meaning given the term Indian tribe in section 4 of the Indian Self-Determination and Education Assistance Act ( 25 U.S.C. 5304 ). (5) Natural forest The term natural forest means a natural arboreal ecosystem that— (A) has a species composition a significant percentage of which is native species; and (B) includes— (i) a native tree canopy cover of more than 10 percent over an area of not less 0.5 hectares; or (ii) other wooded land with a combined cover of shrubs, bushes, and trees of more than 10 percent over an area of not less than 0.5 hectares. (6) Point of origin (A) In general The term point of origin , with respect to a covered commodity, means the geographical location, identified by the smallest administrative unit of land reasonably possible (such as a concession, farm, ranch, property, or other type of public or private land allocation), where the covered commodity was produced. (B) Application to livestock In the case of livestock, the term point of origin includes all geographic locations where that animal existed from birth to slaughter. (7) Produce (A) In general Except as provided by subparagraph (B), the term produce means growing, harvesting, rearing, collecting, extracting, or otherwise producing a commodity. (B) Exclusion The term produce does not include refining or manufacturing. (8) Supply chain The term supply chain means the end-to-end process for getting commodities or products to the United States, beginning at the point of origin and including all points until entry into the United States, including refiners, manufacturers, suppliers, distributors, or vendors. (9) Wholly or in part (A) In general The term wholly or in part shall have the meaning given that term in regulations. (B) Regulations Regulations prescribed under section 3(b) of the FOREST Act of 2023 shall define the term wholly or in part in a manner designed to limit the administrative burden on the importer of record while deterring illegal deforestation. The definition of the term may be commodity specific as needed. . (b) Regulations Not later than one year after the date of the enactment of this Act, the Commissioner of U.S. Customs and Border Protection and the United States Trade Representative shall publish final regulations for implementing section 527A of the Tariff Act of 1930, as added by subsection (a). 4. Implementation of Lacey Act import declarations for pulp and paper products If the requirement for an import declaration under section 3(f)(1) of the Lacey Act Amendments of 1981 ( 16 U.S.C. 3372(f)(1) ) has not been fully implemented with respect to products classified under chapters 47 and 48 of the Harmonized Tariff Schedule of the United States by the date of the enactment of this Act, the Secretary of Agriculture shall— (1) take such actions as are necessary to ensure that the requirement is fully enforced with respect to those products on and after the date that is 210 days after such date of enactment; and (2) not later than 30 days after such date of enactment, publish a notice in the Federal Register that the requirement will be fully enforced with respect to those products on and after the date specified in paragraph (1). 5. Foreign assistance for countries committed to eliminating deforestation (a) Statement of policy It is the policy of the United States to assist foreign governments in eliminating illegal deforestation and to limit all deforestation to the extent practicable. (b) Establishment of fund (1) In general There is established in the Treasury of the United States a fund, consisting of amounts authorized to be appropriated or appropriated under paragraph (2). (2) Deposits to the fund There are authorized to be appropriated, and there are appropriated, to the fund established under paragraph (1) for fiscal year 2023 and each fiscal year thereafter an amount equivalent to the amount of penalties estimated by the Secretary of the Treasury to be collected under section 527A(e) of the Tariff Act of 1930, as added by section 3, in that fiscal year. (3) Availability of funds Amounts in the fund established under paragraph (1) shall be available as follows: (A) 40 percent shall be available to the Secretary of State— (i) to provide financial and technical assistance and other resources to the governments of countries and implementing partners that are working to complete the benchmarks in action plans developed under section 527A(d) of the Tariff Act of 1930, as added by section 3; and (ii) to be transferred, notwithstanding section 3302 of title 31, United States Code, to the Administrator of the United States Agency for International Development and the heads of other appropriate Federal agencies to provide assistance under clause (i). (B) 50 percent shall be available to the Commissioner of U.S. Customs and Border Protection— (i) to carry out the duties of the Commissioner under section 527A of the Tariff Act of 1930, as added by section 3; and (ii) to be transferred, notwithstanding section 3302 of title 31, United States Code, to the Secretary of Agriculture and the Secretary of the Interior for monitoring, audits, enforcement, and other duties assigned under such section 527A. (C) 10 percent shall be available to the United States Trade Representative to carry out the duties of the Trade Representative under such section 527A. (c) Definitions In this section, the terms deforestation and illegal deforestation have the meanings given those terms in section 527A(i) of the Tariff Act of 1930, as added by section 3. 6. Inclusion of illegal deforestation as specified unlawful activity Section 1956(c)(7)(B) of title 18, United States Code, is amended— (1) in clause (vi), by striking ; or and inserting a semicolon; (2) in clause (vii), by striking the semicolon and inserting ; or ; and (3) by adding at the end the following: (viii) any act, engaged in knowingly, to carry out, enable, or encourage illegal deforestation (as defined in section 527A(i) of the Tariff Act of 1930). . 7. Procurement preference for commodities not produced on land subject to deforestation (a) In general Chapter 47 of title 41, United States Code, is amended by adding at the end the following: 4715. Procurement preference for commodities not produced on land subject to deforestation (a) In general In comparing proposals for the purpose of awarding a contract involving any product made wholly or in part of a covered commodity, the head of an executive agency shall reduce the bid price by 10 percent if the contractor demonstrates to the satisfaction of the head of the agency that— (1) the contractor has a policy described in subsection (b) in effect; and (2) the policy and data on monitoring and enforcement of that policy are publicly available and updated not less frequently than annually. (b) Policy described A policy described in this subsection is a policy that includes, at a minimum, for each covered commodity included in a product described in subsection (a), the following: (1) Measures to identify the point of origin of the commodity and ensure compliance with the policy when supply chain risks are present. (2) Data detailing the complete list of direct and indirect suppliers and supply chain traceability information, including refineries, processing plants, farms, and plantations, and their respective owners, parent entities, and farmers, maps, and geolocations, for the commodity. (3) Measures taken to ensure that the commodity does not contribute to deforestation. (4) Measures taken to ensure compliance with the laws of any country in which the commodity is produced. (c) Buy American requirements Subsection (a) does not affect the application of the requirements of chapter 83 of title 41, United States Code. (d) Definitions In this section, the terms covered commodity , deforestation , point of origin , and produce have the meanings given those terms in section 527A(i) of the Tariff Act of 1930. . (b) Clerical amendment The table of sections for such chapter is amended by inserting after the item relating to section 4714 the following: 4715. Procurement preference for commodities not produced on land subject to deforestation. .