The Latest on the Declaration Requirements Under the Lacey Act, the Consumer Product Safety Improvement Act of 2008 and Importer Security Filing 

APHIS Publishes Notice on Implementing the Lacey Act

The Animal and Plant Health Inspection Service (APHIS) has issued a Federal Register Notice on the implementation of the amendments to the Lacey Act, under the Food, Conservation, and Energy Act of 2008 (Farm Bill). The notice provides further information about the declaration requirements and the Government’s implementation plan for enforcing the requirements. The notice also confirms that APHIS will not begin enforcing the declaration requirements until an electronic system for collecting the declaration is available, potentially on April 1, 2009. APHIS requests comments on the notice by December 8, 2008.

The Lacey Act, as expanded on May 22, 2008, by the Farm Bill, makes it unlawful to “import, export, transport, sell, receive, acquire, or purchase in interstate or foreign commerce any plant, with some limited exceptions, taken, possessed, transported or sold in violation of the laws of the United States, a State, an Indian tribe, or any foreign law that protects plants.” It is also unlawful, under the Lacey Act, to make or submit any false record, account or label for, or any false identification of, any plant covered by the Act.

APHIS has defined the term “plant” as “any wild member of the plant kingdom, including roots, seeds, parts or product thereof, and including trees from either natural or planted forest stands.” Exemptions from this definition include “common cultivars,”1 “common food crops,” plants to be used only for laboratory or field research, and plants to remain planted or be replanted.

Import Declaration Requirement

According to the Farm Bill, as of December 15, 2008, it will be unlawful to import certain plants and plant products without an import declaration. However, as discussed below, the declaration will not be enforced until April 1, 2009 or later. The declaration must include the following information: scientific name of the plant, value of the importation, quantity of the plant and name of the country from which the plant is harvested. All plants and plant products will require the declaration, except those used only for packaging material to import another item. APHIS recognizes that the scope of the products subject to the declaration is broad, and includes the following: live plants, plant parts, lumber, wood pulp, paper and paperboard, and products containing certain plant material or products. The last category may include certain furniture, tools, umbrellas, sporting goods, printed matter, musical instruments, textiles, and products manufactured from plant-based resins.

Paper and paperboard products containing recycled plant content will have to be accompanied by a declaration as to the average percentage of recycled content (but no specification as to the species or country of harvest of the recycled plant product component). However, any paper and paperboard also containing nonrecycled plant materials will be subject to the basic declaration requirements. If the plant product is made of species commonly harvested in multiple countries and the actual country is unknown, then the declaration must include the name of each country from which the plant may have been harvested.

Enforcement of Declaration Requirements

According to the notice, violators of the Lacey Act declaration requirements can be subject to the following enforcement actions: (1) civil penalties, (2) criminal penalties and incarceration or (3) forfeiture of the goods. The civil penalties are to be not more than $10,000 for each violation of the Act. Criminal penalties can be up to $20,000 for each violation of the Act, or imprisonment for not more than five years, or both.

While the declarations are currently effective December 15, 2008, APHIS indicates that it is working with the other government agencies on a phased-in approach for enforcing the declaration requirement. Accordingly, a paper declaration will be voluntary from December 15, 2008 to April 1, 2009 (or until an electronic system is put into place), and U.S. Customs and Border Protection (CBP) will not deny customs clearance to goods imported without the declaration until the phase-in period is complete. However, APHIS points out that if a paper declaration is filed and it contains false information, penalties could be imposed on the filer.

Phase-In Schedule

Products anticipated to be subject to the filing requirements on or about April 1, 2009 include those included in the following chapters of the Harmonized Tariff Schedule of the United States (HTSUS): Chapter 44 (wood and articles of wood) and Chapter 6 (live trees, plants, bulbs, cut flowers, ornamental foliage, etc.). Beginning July 1, 2009, products included in the following HTSUS chapters would be subject to the requirements as well: Chapter 47 (wood pulp); Chapter 48 (paper and articles thereof); Chapter 92 (musical instruments); and Chapter 94 (furniture).

After September 30, 2009, APHIS expects the following products to be phased-in for the declaration requirement: Chapter 12 (oil seeds, miscellaneous grain, seed, fruit, plant, etc.); Chapter 13 (gums, lacs, resins, vegetable saps, extracts, etc.); Chapter 14 (vegetable plaiting materials); Chapter 45 (cork and articles thereof); Chapter 46 (basketware and wickerwork); Chapter 66 (umbrellas, walking sticks, riding crops); Chapter 82 (tools); Chapter 93 (guns); Chapter 95 (toys, games, sporting equipment); Chapter 96 (brooms, pencils, buttons); and Chapter 97 (works of art). Another Federal Register announcement will be issued with specific effective dates for the chapters to be phased-in next year.

APHIS will hold a public meeting in Washington, D.C. on October 14, 2008, to discuss the Lacey Act amendment declaration requirements, phased-in implementation plan, scope of the requirements and related issues. Importers of products classified in Chapters 6 and 44 should begin gathering the information necessary for filing the import declaration to ensure compliance by the anticipated enforcement deadline of April 1, 2009.

CPSC General Conformity Certification for Consumer Products

Importers of products not subject to the Lacey Act amendment should not feel excluded. A certification requirement will be effective for certain consumer products that are manufactured on or after November 12, 2008. Pursuant to the Consumer Product Safety Improvement Act of 2008 (CPSIA), enacted on August 14, 2008, manufacturers and importers will be required to certify that particular products conform to Consumer Product Safety Commission (CPSC) requirements.2 The CPSC has issued a Request for Comments and Information pertaining to the requirements for certificates for conformity testing and third-party testing, due before October 29, 2008.

Products Subject to Certification

Prior to the CPSIA, the CPSC only required that “consumer products”3 subject to standards promulgated under the Consumer Product Safety Act (CPSA) were included in the general certification requirements. However, the CPSIA has expanded the general certification requirement to “all products subject to CPSA bans as well as standards, or to any similar rule, ban, standard, or regulation under any other Act enforced by the Commission.” 4 Voluntary CPSC standards are not covered by the certification requirement unless they are converted into a mandatory rule, standard, ban or regulation. Those items that are not subject to the CPSC’s jurisdiction and which are excluded from the certification requirement include: tobacco products; automobiles; pesticides; firearms and ammunition; cosmetics, drugs and food (except for child-resistant packaging issues); medical devices; electronic product radiation; radioactive materials; and tires.

A list of products that are subject to CPSC product safety standards, bans and other requirements can be found athttp://www.cpsc.gov/businfo/reg1.html. This list provides a starting point for determining which products may be subject to this declaration requirement. However, the trade community is anticipating further guidance from the CPSC as to which products are specifically going to require a declaration and which will be excluded. The CPSC held a public meeting on October 2, 2008, to update the public on the certification and testing requirements under the CPSIA, but did not issue such a comprehensive list.

Parties Subject to Certification Requirement

For imported products, a certification must be completed by the importer and the foreign manufacturer, unless the CPSC exempts one of the parties from this responsibility. This certification is required only for products that are subject to a rule, standard, ban or regulation as defined above and are imported for consumption or warehousing. A certification is not expected to include products imported for testing, trade shows, re-export or similar purposes. However, if the product is later sold for consumption in the United States, the certification requirement would apply at that point.

Testing Requirement as Basis for Certification

The certification will be based on a test of each product or upon a reasonable testing program. The reasonable testing program may be prescribed by the CPSC and may also require independent third-party testing. For children’s products, all certifications will eventually be based on third-party testing. The purpose of the testing is to provide reasonable assurance that the product meets all the requirements of the safety rules, standards, bans or regulation. Test records are to be maintained for three years from the certification date.

Certification Content and Production

The certificates are to include, at a minimum, the following information concerning the tested product:

  •  manufacturer or private labeler issuing the certificate and any third party on whose testing the certificate depends, including name, address and phone number;
  •  date and place where the product was manufactured;
  •  date and place of testing;
  •  contact information for the person maintaining test records; and
  •  description of each applicable rule, standard, ban, or regulation.

A blanket statement that the product meets all applicable rules, bans, standards, or regulation will not be accepted by the CPSC. Instead, each product safety regulation must be spelled out for each product tested and certified.

Certificates will have to accompany the imported products covered by the certificate and be provided to each distributor or retailer of such products. The certification will not, however, need to be filed with CBP or CPSC as part of the import process. The CPSC has stated that, in the future, it may require that certificates be filed up to 24 hours prior to arrival.

Form of Certification

For particular products covered by CPSA standards, the certificate must be in the form of a label on the product (e.g., bicycle helmets and walk-behind power lawnmowers). If a particular form of certification is not required, the certificate can be in any form but must contain the required data elements. In such cases, the certificate can be an attachment to the shipping container, a separate document, or a statement on the invoice or bill of lading. CPSC is expected to post sample certifications on its website.

Enforcement Action

The CPSA indicates that a product offered for importation “shall be refused admission” if it is not accompanied by a required certificate or accompanied by a false certificate. If the product is refused admission, it must be destroyed unless permission to export is granted. Knowing violations of the CPSA are subject to civil penalties, and if willful, could lead to imprisonment. Under the CPSIA, maximum penalties for knowing violations of the CPSA have been increased from $5,000 per violation to $100,000 per violation. For a related series of violations, the maximum penalties have been increased from $1.25 million to $15 million.

Importers should be aware of additional information from the CPSC on the certification requirement and quickly work to determine whether any of their imported products, which are manufactured on or after November 12, 2008 are subject to these requirements.

Importer Security Filing

The trade community is still awaiting the Final Rule on Importer Security Filing (ISF), commonly referred to as the10+2 Advance Data Elements, that is expected to be issued in October 2008. Feedback from CBP to date has hinted that once the Final Rule is published, there will be a 60-day period prior to implementation. The rule is expected to be phased-in over a 12-month period. Based on these estimated dates, the rule could be effective by January 1, 2009.

According to the Notice of Proposed Rulemaking issued on January 2, 2008, failure to comply with ISF will subject the principal and surety (jointly and severally) to liquidated damages equal to the value of the merchandise involved in the default. In addition, failure to comply with the filing requirement would likely flag the cargo as “high risk,” which could result in delays and additional scrutiny.

Importers should begin discussing ISF with those functional areas within their companies that would have the most access to the necessary data elements, as well as relationships with the parties likely to be involved (e.g., brokers, forwarders, carriers and foreign suppliers). The departments within the company to be most intricately involved in this process are import compliance, logistics/transportation, and procurement/sourcing. Any problem areas in obtaining the required data elements should be identified during this period and worked through prior to issuance of the Final Rule. Once the Final Rule is published, importers can move forward with concrete plans for complying with the ISF requirements.