Sixteen years ago, Congress amended the Lacey Act to prohibit the importation of illegally harvested timber and to require importers of certain products to verify the genus, species, and country of origin of these materials through Lacey Act declarations, while encouraging importers to exercise due care in reviewing their supply chains. Many importers of timber and other wood products (e.g., furniture) have established processes to submit accurate Lacey Act declarations and otherwise address risks of illegally harvested timber, and increasing numbers of importers are subjected to these requirements as the phase-in schedule continues to progress. However, full compliance remains difficult for some supply chains, especially when harvested timber goes through several levels of manufacturing and sale before reaching the final assembly stage, and companies in countries such as Russia or China may have incentives to evade sanctions or tariffs by obscuring the true species or country of origin. In these cases, it may be difficult to get original source documents on where and how the timber was harvested.

Enforcement by the U.S. Department of Justice (DOJ) and other agencies had been relatively quiet since the U.S. government brought cases against Gibson Guitars (2009-2011) and Lumber Liquidators (2013-2015), but in June 2024, the DOJ announced a negotiated guilty plea by L&D Kitchen and Bath, which obligated the company to establish a stringent Lacey Act compliance program. Here is a quick recap of the Lacey Act and recent developments, as well as some thoughts on potential developments for 2025. 

USDA Expands Lacey Act Declaration Requirements 

The Lacey Act was originally enacted in 1900 primarily to combat interstate trafficking of wildlife but has become a cornerstone of U.S. efforts to address illegal logging and the trade of unlawfully sourced plants. Following amendments in 2008, it became the world's first national ban on the trade of illegal wood, prohibiting all commerce involving plants and plant products (e.g., furniture, paper, or lumber) that are illegally sourced from any U.S. state or foreign country. As noted above, the Lacey Act also required importers of certain products to complete Lacey Act declarations; if the information is not filed, or it is filled out incorrectly or falsely, importers can face fines and penalties under the Lacey Act itself, under general customs penalty provisions, or under 18 USC §542 (for entering goods into the U.S. via a false statement to the U.S. government). If goods are imported in violation of the Lacey Act, they can be seized and forfeited, and importers or other entities involved can face fines up to twice the gross gain from the transaction (under the Alternative Fines Act), depending on the facts. In other words, importers – or customers of imported goods – can find themselves facing large fines, forfeiture of goods, and other compliance headaches very quickly if they do not take compliance with the Lacey Act seriously.

Even today – more than a decade after the Lacey Act was amended – the U.S. government continues to expand the scope of products subject to the Lacey Act declaration requirements, with a new expansion that took effect in late 2024. Effective December 1, 2024, the U.S. Department of Agriculture (USDA) expanded the Lacey Act declaration requirements to include a broader range of imports that previously did not require declarations, such as additional types of furniture, cork, sporting goods, certain essential oils, industrial and medicinal plants, footwear, and hand tools. This is referred to as Phase VII of the Lacey Act declaration implementation. These phases are expected to continue – the implementation notice of Phase VII stated that there will likely be a new phase in the future, as the government "consider[s] the applicability of the declaration requirement to products not included in the current phase-in schedule."

The phase-in enforcement schedule was put in place in February 2009 and the first four phases were quickly implemented by September 2010. Phase V took effect in August 2015 and Phase VI in October 2021. If there are new additions to Phase VII, the Animal and Plant Health Inspection Service (APHIS) will issue a notice six months before the effective date. 

The Lacey Act requires importers to declare the country of harvest and the species of all plants contained in their products. These declarations must be exact and complete – it is not enough to simply state the primary genus/species or the most prevalent country of origin, for example. For products subject to the Lacey Act declaration requirements, importers are obligated to declare the following details at the time of importation: 

• Scientific name (genus and species) of any plant contained in the shipment
• Description of shipment
• Value of the product 
• Quantity of the plant (in metric units of measure) 
• Name of the country from which the plant was taken
• Importer name and address
• Consignee name and address
• HTS code
• Bill of lading
• Container number
• Manufacturer Identification code (MID)
• Name and contact information for importer of record or their agent

For additional reference, Customs and Border Protection (CBP) also provides several samples of Lacey Act declarations. 

The Lacey Act also includes a "due care" standard, which encourages importers to actively investigate and ensure that their information is correct and that the imported plant products are legally harvested and sourced. This standard requires a level of diligence that is reasonable and appropriate based on the circumstances, taking into account the role of the importer in the supply chain and the nature of the product. In other words, it takes a considerable amount of time and energy to fill out Lacey Act declarations completely and accurately, while making efforts to ensure that the information is correct. Companies should be clear-eyed about whether they use products subject to the Lacey Act declaration requirements and assess whether they have sufficient resources allocated to submit the declarations accurately. 

DOJ Announces Corporate Guilty Plea in 2024 for Violations of Lacey Act and Other Laws 

In June 2024, the DOJ announced that Tip the Scale LLC, doing business as L&D Kitchen and Bath (LDK), an importer and seller of various wooden furniture products in Tacoma, Washington, pleaded guilty and was sentenced for making false declarations regarding the species and harvest location of timber used in wooden cabinets and vanities. The resolution is relatively small and ultimately the case revolves around an effort to avoid anti-dumping duties (ADD) for products from China, but we profile it here for two reasons. First, the action shows that the DOJ continues to keep the Lacey Act in its arsenal for corporate enforcement against importers of wood products. Second, the DOJ required LDK to adopt an aggressive compliance plan as part of the resolution, which may signal heightened government expectations for importers.  

Wrongdoing. LDK was purchasing wooden kitchen cabinets from various suppliers in China. However, starting in October 2019, one of LDK's Chinese suppliers, Dongxing, was subject to a 251 percent ADD, pursuant to Antidumping Order on Wooden Cabinets from China. In November 2019, a shipment of cabinets from Dongxing arrived at the Port of Tacoma, but LDK declined to import the products due to the substantial additional duty. The shipment was subsequently re-routed to Malaysia. By December 2019, LDK received confirmation from its Chinese contact that the same suppliers could provide cabinets from Malaysia to avoid the 251 percent duty. According to the plea agreement, the commercial invoice and bill of lading for the shipment from Malaysia were identical to the shipment from China, although the company logos at the top had been revised. Agreeing to this new arrangement, LDK imported five shipments between January and May 2020, declaring the products as Malaysian-origin cabinets made from wood harvested in Malaysia. However, during a standard inspection by CBP, officers discovered several discrepancies in the shipments: Some boxes were labeled "Made in China," and a majority of the boxes had "Made in China" stamps cut out or removed. Additionally, forensic testing by CBP revealed that the wood used in the cabinets was composed of species found in China and Northern Asia, not Malaysia. 

Penalty. Based on the incorrect Lacey Act declarations, LDK pleaded guilty to one count of entry of goods by a false statement to the U.S. government. Under 18 USC § 542, LDK was sentenced to a $110,000 criminal fine, $250,000 administrative penalties, and three years of probation. LDK had already paid over $850,000 in outstanding duties. The U.S. Fish and Wildlife Service seized the imported merchandise, which was then donated to Habitat for Humanity. Additionally, LDK was required to implement an Environmental Compliance Plan (ECP), making it subject to periodic audits at the request of the government. 

This case could be dismissed as a unique outlier, where the importer should have known better in the wake of refusing the importation of goods based on high ADDs. However, a key takeaway is that when an importer does not dedicate time and attention to the Lacey Act declarations, it becomes very easy for the DOJ and other agencies to impose criminal fines, administrative penalties, and seize imported merchandise, creating a crisis for an importer. This case serves as a reminder for importers of the risks associated with inadequate due diligence and the importance of accurate declaration under the Lacey Act. A robust compliance program is essential to prevent such violations and mitigate legal and financial risks.

LDK's ECP. In corporate criminal resolutions, the DOJ will often require the company involved to implement a compliance program as a condition for a resolution to ensure that the company will not repeat its mistakes, and Lacey Act resolutions are similar. In the 2015 resolution with Lumber Liquidators, the DOJ required the company to establish a Lacey Act compliance program as part of the company's guilty plea. Importers can gain valuable insights from the compliance program expectations outlined in such settlement agreements, particularly regarding what constitutes an adequate internal due diligence system and, more broadly, reasonable care under the Lacey Act. Here, however, the ECP is rather rigorous and it may not be reasonable for other importers to follow similar measures. Nonetheless, it is important for importers to know what the DOJ is requiring LDK to do. 

The plan outlined in LDK's settlement agreement follows DOJ's standard practice and consists of three major components: (1) Compliance Responsibility; (2) Supplier Validation; (3) Post-importation Measures. 

1. Compliance Responsibility. The first component requires the company to appoint a dedicated Chief Compliance Officer (CCO) tasked with ensuring the company's adherence to all import requirements, including compliance with the Lacey Act's import declaration obligations. The CCO is responsible for advising the company on import decisions and maintaining all applicable records to support compliance efforts and will report to the CEO. This appointment of a CCO dedicated to these issues is significant because LDK does not appear to be a large company, based on limited information publicly available.  
2. Supplier Validation. This second component outlines the steps a company must take to confirm Lacey Act compliance before establishing any supplier relationships. Many of the elements are consistent with the Lumber Liquidators compliance plan for 2015. Two important additions, however, are as follows: First, the DOJ added a mandate that LDK use only those suppliers that certify "they have implemented reasonable procedures to ensure compliance with all applicable trade laws, including the Lacey Act." Second, LDK must require a written description of the supplier's Lacey Act compliance procedures prior to ordering goods from the supplier. These added certification and policy requirements are consistent with the general trend across legal regimes requiring importers and other customers to cascade obligations throughout their supply chains. In addition, the DOJ also requires LDK to implement the following procedure before sourcing from their suppliers:
   • Risk Assessment for Each Supplier, with Pre-Approvals for Medium- and High-Risk Suppliers: Conduct a risk assessment of both merchandise and suppliers, ranking them based on their level of risk. Higher-risk products and suppliers will require additional approvals and closer monitoring by the company. In particular, the CCO must approve any imports from suppliers categorized as high or medium-risk in advance of the shipments and document the rationale in writing. 
   • Risk-Based Purchase Order (PO) Reviews, Mandatory for Medium- and High-Risk Suppliers: The DOJ requires LDK to implement a risk-based approach to review purchase orders to ensure that LDK can "establish a verified and unbroken chain of custody for its imports, tracing back to the forest level through sufficient documentation." That being said, the risk-based approach is only for low-risk suppliers. LDK is obligated to conduct a PO review for every shipment from medium- or high-risk suppliers prior to importation, with an obligation to reject the product and return it if the PO review does not include sufficient documentation showing the "harvest location, legality of harvest, chain of custody," and more. 
   • In-Person Audits: The DOJ requires LDK (or hired third parties with industry experience or certification credentials) to conduct in-person audits at the supplier's business to confirm the accuracy of the provided information. 
   As noted, these elements are required for a company subject to a guilty plea for related violations. It is not necessarily the definition of "due care" under the Lacey Act, although it is important to consider the implications if the DOJ were to take the position that anything less does not meet the "due care" standard. 
3. Post-importation Measures. The ECP also includes numerous post-importation measures, which include auditing, mitigation, training, and penalties for non-compliance. LDK is required to undergo periodic audits conducted by an external auditor to assess adherence to its compliance obligations. If missteps or deficiencies are identified during these audits, the company must implement appropriate remediation or mitigation measures to address the issues.
    
   Additionally, all employees involved in the importation process must participate in training sessions focused on the company's import compliance program. This training ensures that employees are well-versed in compliance protocols and their roles within the process. Violations of the compliance program by employees will result in disciplinary actions, reinforcing the importance of adhering to established standards.

Effective Compliance in 2025 

There are several signs indicating that importers should prioritize compliance with the Lacey Act in 2025: 

• Lacey Act declaration requirements have expanded in 2024 and may expand again in 2025.
• The DOJ recently imposed significant obligations, fines, and penalties on an importer for violating the Lacey Act, now requiring a rigorous and burdensome compliance plan to ensure the company does not violate the law again.
• There are numerous signs that Homeland Security Investigations (HSI) is working to investigate imports of illegal timber, either directly or through manufactured products. For example, HSI has set up a Forest Crimes Program and is conducting outreach in 2025, and we can reasonably expect that there are active investigations that will likely result in new enforcement actions in the year ahead. 

For more information, please contact:

Daniel Patrick Wendt, dwendt@milchev.com, 202-626-5898

Flora J. Pierce, fpierce@milchev.com, 202-626-6058

Richard A. Mojica, rmojica@milchev.com, 202-626-1571