- - Wednesday, December 21, 2011


It’s bad when foreign countries erect barriers to free trade that hurt U.S. businesses. But it’s worse, and inexplicable, when our own government uses foreign laws against American businesses, threatening U.S. citizens with prosecution and jail.

The latest victim: Gibson Guitars, which has been manufacturing musical instruments in the United States for more than a century. Earlier this year, federal agents raided its factories in Memphis and Nashville, Tenn., seizing wood and computers.

Gibson’s crime, according to an affidavit supporting the search warrant, was the illegal importation of Indian-grown ebony veneers, intended for use as fret boards. A hardwood prized for its appearance and durability, ebony is sustainably raised by certified growers, and Indian law doesn’t bar its harvesting or export. What Indian law does require is that ebony veneers be finished within the country, by local labor, to a thickness of less than 6 millimeters. Gibson’s wood, it happens, was a bit thicker — nearly a full centimeter.

On that basis, U.S. Fish and Wildlife Service agents invaded Gibson’s facilities, bringing its operations to a standstill. The company is still recovering from the disruption and negative publicity.Some blame is due to Fish and Wildlife and the other federal agencies that piled on. Surely there are higher law enforcement priorities than busting U.S. businesses for trifling violations of trade laws.

Also blame Congress, which armed the feds with one of the broadest criminal statutes ever conceived. The Lacey Act criminalizes trade in protected species of plants and animals. Rather than attempt to list the species to be protected or delegate that task to bureaucrats, Congress barred the importation or sale of any plant or animal taken in violation of any law anywhere. That’s how U.S. federal agents came to enforce Indian trade-protection laws.

The Lacey Act hangs like the sword of Damocles over the heads of American businesses. In addition to the 4,500 or so criminal offenses in federal law, plus as many as 300,000 more contained in federal regulations, businesses are expected to comply with the laws of nearly 200 foreign countries every time they purchase or take possession of any product from a foreign source — whether or not they imported it themselves.

As always, ignorance of the law is no excuse, but who couldn’t be excused for not knowing that India distinguishes ebony exports based on how much local labor was involved in production and that a few millimeters is the difference between compliance with the law and criminal penalties?

That risk is all too real, as a Texas retiree with a part-time orchid business learned when armed Fish and Wildlife agents raided his home in search of endangered flowers. What they found were a few common species that had been mislabeled in transit. But because those species were included on a United Nations list of “threatened species” — the result of lobbying by Dutch growers seeking to shut down South American competitors — it was a Lacey Act violation.

He fought the charges until his retirement nest egg ran out, and then he pleaded guilty. The orchid enthusiast was sentenced to 17 months in federal prison. He is out now, but the once-vibrant greenhouse behind his Houston home sits abandoned and dilapidated. He lost his small business but also, understandably, his passion for flowers.

Good may come of the Gibson Guitars raid yet. It has put the issue on Congress’ agenda. In October, Sen. Rand Paul, Kentucky Republican, announced plans to reform or abolish the Lacey Act. At a time when the economy and job growth are stalled, it makes sense to reconsider laws like the Lacey Act that put domestic businesses at a disadvantage to their foreign competitors.

It won’t be easy. Special interests, including domestic loggers who benefit from legal uncertainty over imports, already have come out against any kind of reform that might level the playing field. How ironic that such protectionist thinking could keep the feds enforcing foreign countries’ trade-protection laws against Americans.

Andrew M. Grossman is a visiting legal fellow in the Center for Legal and Judicial Studies at the Heritage Foundation.



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