Gibson Guitar Acknowledges Lacey Act Violation, Agrees to $300,000 Penalty

August 14, 2012

Gibson Guitar Corp. recently entered into a criminal enforcement agreement with the United States Government regarding allegations that the company violated the Lacey Act by illegally purchasing and importing ebony wood from Madagascar and rosewood and ebony from India without reporting such transactions.  According to the Department of Justice, the agreement defers prosecution for the Lacey Act violations and requires Gibson to pay a $300,000 penalty. Gibson must also make a $50,000 community service payment to the National Fish and Wildlife Foundation to be used to promote the conservation, identification and propagation of protected tree species used in the musical instrument industry and the forests where such trees are grown. Furthermore, the agreement requires Gibson to implement a compliance program, to strengthen its compliance controls and procedures, and to withdraw its claims to wood seized during the criminal investigation. The forfeited wood includes Madagascar ebony from shipments with a total invoice value of $261,844. According to the Department of Justice, the government will decline to charge Gibson criminally in connection with the Lacey Act violations provided that Gibson fully carries out the agreement and does not commit future violations.

Under the Lacey Act, it is illegal to import into the United States plant and plant products that have been harvested and exported in violation of the laws of another country.  While the Lacey Act was initially enacted to protect animal species, Congress amended it in 2008 to include plants and plant products, which includes a wide array of wood materials and finished products. The Lacey Act makes it unlawful to trade in any plant that is taken, possessed, transported, or sold in violation of the laws of the United States, a State, Indian Tribe, or any foreign law that protects plants. It also makes it illegal to falsify or submit falsified documents, accounts or records of any plant covered by the Lacey Act, or to import plants and certain plant products without an import declaration.  The import declaration requirements are prescribed and enforced by the Animal and Plant Health Protection Service of the U.S. Department of Agriculture, which also publishes a list of restricted plant species.

Legislation has been introduced in Congress seeking to limit the enforcement authority of the Department of Justice with respect to the Lacey Act, and to exempt certain classes of merchandise from its coverage.

For further information regarding the Lacey Act, please contact a Barnes/Richardson attorney.