US enforces the Lacey Act in Gibson Guitar case

The American guitar manufacturer Gibson Guitar has entered into a criminal enforcement agreement with the US Department of Justice. The company allegedly violated the Lacey Act by illegally purchasing and importing ebony wood from Madagascar and rosewood and ebony from India.

With this criminal enforcement agreement, the Lacey Act has shown that forest legislation can successfully deal with companies who purchase and import illegally harvested timber. This is expected to deter other companies from trading in illegally logged timber in the future. Timber enforcement authorities in the European Union (EU) and Australia are following the case, as similar legislation in the EU and Australia are affecting timber imports to these regions.

Illegal logging has a devastating impact on some of the world's most valuable forests. It can have not only serious environmental consequences but also economic and social ones. The US, the EU and Australia therefore decided to tackle this issue by putting in place forest legislation.

The Lacey Act is a US law that aims to exclude illegal timber from markets. The EU's response to the problem of illegal logging is reflected in its FLEGT (Forest Law Enforcement, Governance and Trade) Action Plan which outlines measures to stop trade in illegal timber. One of the measures, the EU Timber Regulation applicable from 3 March 2013, prohibits the placing of illegally harvested timber and timber products on the EU market. The EU and a number of timber exporting countries have also started negotiating bilateral trade agreements called Voluntary Partnership Agreements. These agreements aim to guarantee that only legal timber is exported from these countries to the EU. Australia is currently in the process of drafting an Illegal Logging Prohibition Bill which sets out similar prohibitions and requirements found in the US Lacey Act and the EU Timber Regulation.

The criminal enforcement agreement between Gibson Guitar and the US Department of Justice is seen by many as a demonstration of the Lacey Act's effectiveness. Adam Grant, senior associate of the World Resources Institute, stated: ‘This agreement closes an important chapter on the first major investigation and by far the most publicized cases under the 2008 amendments to the US Lacey Act. The decision demonstrates that the Lacey Act has teeth. It shows that the law can be enacted with serious, but balanced penalties for violations. Fair enforcement of the Lacey Act, the world's first ban on the importation of illegally sourced wood, is important to ensure that the wood comes into the US from legal sources. We are hopeful that this case will provide incentive to other wood product providers– and their suppliers– to engage in legal purchasing of wood and help protect endangered forests.'

Assistant Attorney General Ignacia Moreno of the Justice Department's Environment and Natural Resources Division announced that ‘as a result of this investigation and criminal enforcement agreement, Gibson has acknowledged that it failed to act on information that the Madagascar ebony it was purchasing may have violated laws intended to limit overharvesting and conserve valuable wood species from Madagascar, a country which has been severely impacted by deforestation.'

Under the criminal enforcement agreement, the US government will decline charging Gibson criminally in connection with Gibson's purchase or importation of ebony from Madagascar and ebony and rosewood from India, provided that Gibson fully carries out its obligations under the agreement, and commits no future violations of law.

The agreement requires Gibson to pay a penalty of US $300,000 and a community service payment of $50,000 to the National Fish and Wildlife Foundation. Gibson will also implement a compliance programme designed to strengthen its compliance controls and procedures. And Gibson will withdraw its claims to the wood seized in the course of the criminal investigation, including Madagascar ebony from shipments with a total invoice value of $261,844.

‘Gibson has ceased acquisitions of wood species from Madagascar and recognizes its duty under the US Lacey Act to guard against the acquisition of wood of illegal origin by verifying the circumstances of its harvest and export, which is good for American business and American consumers,' said Moreno.