Congress recently approved legislation that significantly tightens the requirements for the importation of plant and plant products into the United States, including products made of wood. These new provisions may potentially become a hindrance to Hong Kong and mainland Chinese furniture exporters, who are advised to exercise caution to avoid potential problems with U.S. authorities.

On 22 May, as part of its consideration of broader agriculture legislation, Congress passed a provision that amends the Lacey Act to make it unlawful for any person to import, export, transport, sell, receive, acquire, purchase in interstate or foreign commerce or possess any plant taken (i.e., captured, killed, collected, harvested, cut, logged or removed) in a foreign country that is:

• taken, transported, possessed or sold in violation of any foreign law or regulation that protects plants or regulates the theft of plants, the taking of plants from a park, forest reserve or other officially protected or designated area, or the taking of plants without or contrary to required authorisation;
• taken, possessed, transported or sold without paying required royalties, taxes or stumpage fees; or
• taken, possessed, transported or sold in violation of any legal limitation governing the export or transshipment of plants.

The legislation re-defines "plant" to mean any wild member of the plant kingdom, including roots, seed, parts and products thereof, and including trees from either natural or planted forest stands, but excluding (i) common cultivars, except trees and common food crops (including roots, seed, parts or products thereof), (ii) scientific specimens of plant genetic material to be used only for laboratory or field research and (iii) any plant that is to remain planted or to be planted or replanted. The exceptions described in points (ii) and (iii) above do not apply if the plant is listed in an appendix to the Convention on International Trade in Endangered Species of Wild Fauna and Flora, listed as an endangered or threatened species under the Endangered Species Act of 1973, or pursuant to any state law that provides for the conservation of indigenous species that are threatened with extinction.

Within 180 days from the date of enactment of the legislation (probably by 18 November), importers will be required to file a declaration upon importation that contains (i) the scientific name of any plant (including the genus and species) contained in the importation, (ii) a description of the value and quantity (including the unit of measure) of the importation and (iii) the name of the country from which the plant was taken. Until such date as the U.S. Department of Agriculture promulgates regulations on plant product declarations, such declarations have to comply with the following requirements.

• If the plant species used to produce the imported plant product varies and that species is unknown, the declaration must contain the name of each plant species that may have been used to produce the plant product.
• If the plant species used to produce the imported plant product is commonly taken from more than one country and the country from which the plant was taken and used to produce the plant product is unknown, the declaration must contain the name of each country from which the plant may have been taken.
• If a paper or paperboard plant product includes recycled plant product, the declaration must contain the average percent recycled content without regard for the species or country of origin of the recycled plant product, in addition to the information for the non-recycled plant content otherwise required.

Declarations need not be filed for plants used exclusively as packaging material to support, protect or carry another item, unless the packaging material itself is the item being imported.

According to House Natural Resources Committee Chairman Nick Rahall (Democrat-West Virginia), the legislation is intended to fend off unfair competition from illegally-harvested foreign timber as well as products made from that wood. The provision was supported by the Hardwood Federation and several labour unions and environmental groups. Estimates from the American Forest and Paper Association indicate that the importation of illegal wood costs the U.S. some US$1 billion every year in lost exports and reduced domestic prices.

U.S. authorities are expected to use the Lacey Act amendments to crack down on imports of illegal wood products, which may well include enforcement actions against mainland Chinese merchandise. In perhaps a sign of things to come, a federal grand jury in New Jersey indicted a mainland Chinese manufacturer of baby furniture on 15 April on charges of smuggling furniture made from a protected species of wood, commonly known as ramin. The indictment alleges that the ramin originated in the wild in Indonesia and was imported without a valid export permit or re-export certificate in violation of CITES, which protects certain species of fish, wildlife and plants against overexploitation. The U.S., Indonesia, Malaysia and mainland China are signatories to this convention. According to the Department of Justice, the maximum penalty for a smuggling violation by an individual at the time of the alleged violation is five years imprisonment and a fine of either US$250,000 or twice the pecuniary gain or loss caused by the offense. The maximum fine for an organisation is US$500,000 or twice the pecuniary gain or loss caused by the offense.

The farm bill that was used as the legislative vehicle to approve the Lacey Act amendments also originally included a separate provision that would establish an import declaration requirement for softwood lumber and products thereof, effective 60 days from the date of enactment of the legislation. However, Congress inadvertently forwarded to President Bush an incomplete copy of the farm bill that did not include the softwood lumber requirement or several other miscellaneous provisions. The president vetoed the incomplete bill and Congress then voted to override that veto. As a result, the provisions that were ultimately approved by Congress have become law while those that were mistakenly left out are expected to be enacted in the near future.

The products covered by the scope of the import declaration programme are softwood lumber and softwood lumber products classified under HTSUS subheadings 4407.10.00, 4409.10.10, 4409.10.20 and 4409.10.90, including the following softwood lumber, flooring and siding.

• coniferous wood, sawn or chipped lengthwise, sliced or peeled, whether or not planed, sanded or finger-jointed, of a thickness exceeding six millimetres
• coniferous wood siding and flooring (including unassembled strips and friezes for parquet flooring) continuously shaped (tongued, grooved, rabbeted, chamfered, v-jointed, beaded, moulded, rounded or the like) along any of its edges or faces, whether or not planed, sanded or finger-jointed
• other coniferous wood (including unassembled strips and friezes for parquet flooring) continuously shaped (tongued, grooved, rabbeted, chamfered, v-jointed, beaded, moulded, rounded or the like) along any of its edges or faces (other than wood mouldings and wood dowel rods) whether or not planed, sanded or finger-jointed
• coniferous drilled and notched lumber and angle cut lumber

Also included are products classified under HTSUS subheading 4409.10.05 that are continually shaped along their ends or side edges, as well as softwood lumber products that are stringers, radius-cut box-spring frame components, fence pickets, truss components, pallet components, and door and window frame parts classified under subheadings 4418.90.4695, 4421.90.7040 or 4421.90.9740.

The following products are specifically excluded or exempted from the import declaration requirement.

• trusses and truss kits classified under HTSUS subheading 4418.90
• I-joist beams
• assembled box-spring frames
• pallets and pallet kits classified under HTSUS subheading 4415.20
• garage doors
• edge-glued wood classified under HTSUS subheading 4421.90.9740
• complete door frames
• complete window frames
• furniture
• articles brought into the U.S. temporarily and for which an exemption from duty is claimed under HTSUS subchapter XIII of chapter 98
• household and personal effects
• stringers (pallet components used for runners) if they have at least two notches on the side, positioned at equal distance from the centre, to properly accommodate forklift blades, classified under HTSUS subheading 4421.90.9740
• box-spring frame kits if (i) the kits contain (a) two wooden side rails, (b) two wooden end (or top) rails and (c) varying numbers of wooden slats; and (ii) the side rails and the end rails are radius-cut at both ends (these kits must be individually packaged and contain the exact number of wooden components needed to make the box-spring frame described on the entry documents, with no further processing required, and none of the components contained in the package may exceed one inch in actual thickness or 83 inches in length)
• radius-cut box-spring frame components, not exceeding one inch in actual thickness or 83 inches in length, ready for assembly without further processing, if radius cuts are present on both ends of the boards and are substantial cuts so as to completely round one corner
• fence pickets requiring no further processing classified under HTSUS subheading 4421.90.70, one inch or less in actual thickness, up to eight inches wide and six feet or less in length, having finials or decorative cuttings that clearly identify them as fence pickets (in the case of dog-eared fence pickets, the corners of the boards must be cut off so as to remove pieces of wood in the shape of isosceles right angle triangles with sides measuring 0.75 inches or more)
• lumber originating in the U.S. that is exported to another country for minor processing and imported into the U.S. if (i) the processing occurring in another country is limited to kiln drying, planing to create smooth-to-size board and sanding and (ii) the importer establishes to the satisfaction of U.S. Customs and Border Protection upon entry that the lumber originated in the U.S.
• any softwood lumber or softwood lumber product that originated in the U.S. if the importer, exporter, foreign processor or original U.S. producer establishes to the satisfaction of CBP upon entry that the softwood lumber entered and documented as originating in the U.S. was first produced in the U.S.
• softwood lumber or softwood lumber products contained in a single family home package or kit, regardless of classification under the HTSUS, if the importer declares that certain specific requirements have been met

Importers of products covered under the softwood lumber import declaration programme will be required to submit the following information to CBP: (i) the export price for each shipment of softwood lumber or softwood lumber products and (ii) the estimated export charge, if any, applicable to each shipment, as calculated by applying the percentage determined and published by the Department of Commerce to the export price.

The importer must declare that he/she has made appropriate inquiry, including seeking appropriate documentation from the exporter and consulting the determinations published by the DOC, and that to the best of the person's knowledge and belief (i) the export price provided is determined in accordance with the regulations, (ii) the export price provided is consistent with the export price provided on the export permit, if any, granted by the country of export; and (iii) the exporter has paid or committed to pay all export charges due (a) in accordance with the volume, export price and export charge rate or rates, if any, as calculated under an international agreement entered into by the country of export and the United States and (b) consistent with the export charge determinations published by the DOC.

The DOC will be required to determine, on a monthly basis, any export charges (expressed as a percentage of export price) to be collected by a country of export from exporters of covered softwood lumber or softwood lumber products in order to ensure compliance with any international agreement entered into by that country and the U.S. DOC determinations will be published in the Web site of the International Trade Administration.