Global deforestation and forest degradation are responsible for at least 10% of climate change. This result is due to the trade of timber, wildlife, and other products associated with forests. Deforestation regulations, like the United States (U.S.) Lacey Act, aim to protect forests and wildlife by mandating deforestation-free supply chains. As one of the early protections against the degradation of forests, this act paved the way for more recent legislation such as the European Union Deforestation Regulation (EUDR).
Coming soon: Lacey Act Phase VII
On May 30, 2024, the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) announced Phase VII of the Lacey Act, which applies to certain imported plants and wood products that have not previously required Lacey Act declarations. Phase VII requires a Lacey Act declaration for all remaining plant product Harmonized Tariff Schedule (HTS) codes not made of 100 percent composite materials. The new products include plywood and laminated wood, tools, natural cork, bamboo and rattan, footwear, and essential oils. A full list of covered products is outlined in the Federal Register notice. Phase VII begins implementation on December 1, 2024.
Is the Lacey Act a deforestation law?
The Lacey Act is a deforestation law prohibiting the import of illegal timber and timber products into the United States. When the act was originally passed in 1900, its purpose was to preserve native animal species and habitats by prohibiting the trafficking of illegally sourced game animals. However, the act was amended in 2008, and its scope expanded to include illegally sourced plant materials and any manufactured products derived from those materials, making it a critical effort to reduce worldwide deforestation.
Which products are within the scope of the Lacey Act?
The Lacey Act initially focused on game animals, but today includes prohibitions on illegally sourced wood and timber products.
The full scope of products under the Lacey Act includes:
- All plants, including trees and shrubs
- Wild animals, fish, and birds
- Any product derived from these plants or animals
Timber, paper products, furniture made from certain types of wood, certain foods, and even some instruments, are all within the act's scope. Due to the wide range of products covered under the Lacey Act, awareness of material composition is crucial. Companies should note that products containing plant-based materials may fall within the scope of the act.
The Lacey Act also applies if:
- The shipment falls under any of the entry-type codes mentioned here
- The shipment has an aggregate value of at least $2,500 and is covered by a bond
- The imported product is classified under a Harmonized Tariff Schedule (HTS) code as listed on APHIS’ Implementation Schedule
Which companies must comply with the Lacey Act?
Companies that import, export, transport, sell, receive, acquire, or purchase plants must comply with the Lacey Act. This includes timber and timber products, as well as wildlife trade. Businesses must assess their supply chains to ensure they are not dealing with products illegally taken or traded in violation of U.S. federal, state, or foreign laws.
How do companies comply with the Lacey Act?
Compliance with the Lacey Act revolves around due diligence, which requires companies to collect data to be certain about the origins of their products and materials. To comply with the Lacey Act, companies must first assess if any imported goods or products contain plant material, including wood. When certain other conditions are met, and legality is confirmed, they must file a Lacey Act Declaration.
A Lacey Act Declaration can be filed both electronically and on paper. The declaration must contain extensive information including (but not limited to):
- Scientific plant names
- Country of harvest
- Product value (USD)
- Quantity of plant material in the shipment.
- Supplier information
- HTS Code
- Percentage of recycled content
For more information, see the template.
Who enforces the Lacey Act?
The Lacey Act is administered by agencies of the Departments of Agriculture, Commerce, and Interior, which includes the Animal and Plant Health Inspection Service (APHIS), the National Marine Fisheries Service, and the U.S. Fish and Wildlife Service (FWS).
What are the penalties for non-compliance with the Lacey Act?
The penalties for non-compliance with the Lacey Act vary based on the nature and frequency of the violation, such as:
- Civil penalties: Unintentional violations can result in fines
- Criminal penalties: Knowingly violating the Act can lead to more severe fines and even imprisonment
- Forfeiture of goods: Products sourced or traded in violation of the Act can be seized by authorities
Beyond the direct legal implications, companies found in violation of the act may suffer significant reputational damage.
Learn about deforestation-free supply chains with Source Intelligence
As the global regulatory landscape continues to evolve, companies must address their supply chain’s impact on deforestation to remain compliant and up to date with deforestation regulations. The sourcing of deforestation-free timber requires an understanding of supplier risk, due diligence, and high-risk locations. Source Intelligence offers further education on deforestation through our Defeating Deforestation webinar, which covers other deforestation regulations such as the EUDR.
