About a year-and-a-half ago, it was big news when the Gibson guitar factory was raided by gun-carrying agents of the US Government.\u00a0 The raid was deemed necessary because of an alleged violation of the Lacey Act.<\/p>\n
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The Lacey Act,\u00a0as amended in 2008, now makes it illegal for a US\u00a0business to purchase any plant that is sold in violation of a foreign law.\u00a0 A United States Department of Agriculture document says that \u201cIt is the responsibility of the importer to be aware of any foreign laws that may pertain to their merchandise prior to its importation into the United States. Currently, the U.S. Government has no plans to create\u2026a database [of applicable foreign laws].\u201d<\/span><\/p>\n Apparently,\u00a0some wood purchased by Gibson from India and Madagascar was originally considered to be illegal for export from\u00a0those countries\u00a0and, per the amended Lacey Act, by default, illegal for purchase by a US company.\u00a0 <\/span>Despite the massive news coverage at the time of the raid, there was very little coverage of the resolution this past August.\u00a0 So little, in fact, that I did not see any coverage at all until now, when I got curious and googled the topic.\u00a0 <\/span><\/p>\n I guess sourcing news isn\u2019t sexy to the general public unless guns are involved.\u00a0 <\/span>So, despite the fact that it is somewhat \u201cold news,\u201d I think the resolution is still relevant and I will cover it here.<\/span><\/p>\n It ends up that the US government decided not to bring criminal charges against Gibson, opting for a settlement that had Gibson paying\u00a0a \u201c$300,000 penalty to the U.S. government, and it also has agreed to make a\u00a0 \u2018community service payment\u2019 of $50,000 to the National Fish and Wildlife Foundation \u2014 to be used on research projects or tree conservation activities,\u201d according to an article on cnsnews.com.\u00a0 Interestingly, the same article reports that the US government and Gibson \u201cacknowledge and agree that certain questions and inconsistencies now exist\u201d relative to the imported Indian wood products and, therefore, Gibson may continue to purchase such products from India \u201cunless and until the Government of India provides specific clarification\u201d that the wood products are, in fact, in violation of Indian law.<\/span><\/p>\n As far as the Madagascar wood\u2026it appears that wood\u00a0was and is\u00a0definitely illegal for exportation according to Madagascar\u2019s laws.\u00a0 However, even that situation is not so cut and dried and should be of keen interest to all sourcing professionals.\u00a0 Here\u2019s why\u2026<\/p>\n In a US Department of Justice memo summarizing the investigation, there is buried this interesting paragraph:<\/p>\n \u201cGibson ordered ebony fingerboard blanks to use in the manufacture of guitars from T.N. GMBH, a company based in Hamburg, Germany. Based upon documentation now in Gibson\u2019s possession, T.N. purchased some of its ebony fingerboard blanks from R.T., a forestry operator in Madagascar. Gibson maintains that specific information concerning that sourcing was not provided to Gibson by T.N. when Gibson placed its orders. Gibson assumed, without asking, that T.N. had undertaken to provide it with lawfully harvested and exported materials and, after the execution of the search warrant in this case, T.N. represented to Gibson that it had supplied legally obtained and exported materials.\u201d<\/p>\n So,\u00a0Gibson bought the \u201cillegal\u201d wood from a\u00a0supplier in Germany, who bought that wood from a\u00a0supplier in Madagascar.\u00a0 But,\u00a0in the end, Gibson is held responsible for illegal sourcing.\u00a0 This case has several sourcing lessons:<\/p>\n My personal opinion is that Gibson didn\u2019t intend to break any laws.\u00a0 Their offense was more a crime of omission than a crime of commission.\u00a0 But that\u2019s a small consolation to a company that was raided in a \u201cviolent and hostile\u201d manner.\u00a0\u00a0For the rest of US companies,\u00a0it sets a precedent that sets the bar for more thorough performance by all sourcing professionals affected by the Lacey Act and similar importing laws.<\/p>\n My hope for you is that you never make a sourcing decision that invites a SWAT team.<\/p>\n","protected":false},"excerpt":{"rendered":" About a year-and-a-half ago, it was big news when the […]<\/p>\n","protected":false},"author":12,"featured_media":3996,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3262","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-procurement"],"yoast_head":"\n\n