International Marketing Practices

of the United States or in violation of any Indian tribal law” [68]. This law is particularly relevant for forest products importers, who are largely responsible for ensuring the legal origin of imported products [67]. Steep penalties are enforceable for individuals or companies that break the law, which might include product forfeiture, up to five years in prison, or up to $250,000 in fines for individuals and $500,000 for corporations, if there was knowledge of illegal sourcing [69]. There have been recent high-profile cases against U.S. companies regarding Lacey Act enforcement. A guitar manufacturer was fined $300,000 and required to forfeit tropical hardwood lumber shipments estimated at $419,000 seized from India and Madagascar for Lacey Act infractions [70]. An importer and distributor of wood flooring was found guilty of knowledgably importing illegal hardwood flooring primarily from eastern Russia, facing the largest Lacey Act penalty to date, $13 million in fees, forfeited assets, and community service [71]. The U.S. implemented increasingly stringent import regulation to decrease deforestation by illegal logging, incentivizing countries with a high activity in illegal logging to implement more sustainable practices [65]. There is evidence that the Lacey Act has had a significant effect on the trade of forest products. One study concluded that the amendment had a statistically significant effect on forest products imports to the U.S. [72], and the authors were able to attribute increases in prices and declines in import quantities from specific “high-risk” countries (Bolivia, Brazil, Indonesia, Malaysia, and Peru) to the Lacey Act [73]. Another study reported that imports of illegal wood to the U.S. decreased by 32%-44% after the Lacey Act was amended in 2008, due in part to the effects of the law. However, the same study estimated that forest products imports from illegal sources amounted to $2.8 billion in 2013 [74]. Forest Law Enforcement, Governance, and Trade Action Plan The European U ion’s Forest Law Enfo cement, Governance and Trade (FLEGT) Action Plan was proposed in 2003 by the European Commission in an effort to combat illegal logging. The main focus of the FLEGT is to support timber-producing countries, promote trade of legal timber, promote public procurement policies, support private sector initiatives, safeguard financing and investing, use existing legislation or adopt new legislation to support the plan, and address the problem of “conflict timber” (e.g., timber from war-torn regions) [64]. The basis for the FLEGT’s implementation is a voluntary agreement between the EU and governments of exporting countries (known as voluntary partnership agreements), by which a government agrees to ensure that timber exported from its country complies with the country’s laws [59]. By 2019, 15 tropical countries were negotiating or implementing volunteer partnership agreements with the European Union [63]. The FLEGT framework requires importers to apply “due diligence,” providing access to information about the origin of the timber and implementing risk assessment and mitigation procedures (of timber coming from a specific country being illegally sourced) [59]. An evaluation of the FLEGT’s effectiveness concluded that its objective of reducing EU imports of illegal timber is being achieved and that it is

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