“Large-scale” theft of Walnut timber allegedly occurred on a 21,000 acre protected area in Giles County, Virginia, according to the Department of Justice.

An indictment of three men include at least 6 counts of Lacey Act violations.

Charging U.S. loggers with Lacey Act violations is rare. This is despite illegal logging being widespread in the country.

Could this signify a change in enforcement of the Lacey Act within U.S. timber supply chains? Does this mean merchants trading U.S. hardwoods face higher legal risks and due diligence expectations?

Under the Lacey Act, anyone processing, transporting, or distributing a wood product that has been illegally harvested or traded is legally liable. Presumably, other supply chain participants could be charged.

Walnut timber theft in Giles, Virginia

A federal grand jury in Roanoke has indicted three men on Lacey Act violations, and other charges related to the alleged illegal removal of Walnut timber from federally protected land.

According to court documents, the three defendants conspired to log Black Walnut trees located in the Bluestone Project and transport them to Lindside, West Virginia to sell. 

Charges include at least…

• Lacey Act violations – 6 counts;
• 6 counts of theft of government property;
• 6 counts of removal of timber from lands of the United States, and
• 10 counts of the illegal cutting of trees on lands of the United States.

Under the Lacey Act, penalties for harvesting, transporting, processing or selling illegally obtained wood products can involve 5 years in jail, and a personal fine of $250,000. It can also lead to the forfeiture of the merchandise and smuggling and money laundering charges.

Where is the illegal Walnut timber now?

Unless caught in the act of harvesting or transporting logs, legal actions taken against actors in timber supply chains often happen after the wood in question has made it into supply chains.

Black Walnut is a prized species. Logs that are not milled in the U.S. get shipped all over the world. (Often to be processed and re-exported to end markets).

In fact, the volume of Walnut logs exported from U.S. nearly tripled in the decade ending 2021.

As the Lacey Act applies to all downstream participants in the supply chain, this could mean that numerous other merchants are legally liable for failing to conduct adequate due diligence with regards to the origin of the Black Walnut timber.

Additionally, a large effort was just made to collect Walnut tree DNA from public forests.

Tree DNA can be used to track wood flows and for evidence in forest crime prosecution.

A new legal precedent for U.S. hardwood supply chains?

Illegal logging in the U.S. is widespread and can be on a large scale. For more on this see…

• Two Alaska timber sales were not managed in accordance with USDA Forest Service policy
• Idaho timber sales bidder collusion may have cost the state $43 million
• Whiskey barrels and illegal White Oak timber

But illegal logging and related crimes often go un-prosecuted in the U.S.

For example, the study, “An Analysis of Timber Trespass and Theft Issues in the Southern Appalachian Region” estimated that about 120 instances of timber theft occur each year in a 20 county area in Southern Appalachia.

However, in the three years prior to the study, in the same 20 country area, there were just 36 criminal cases related to timber theft.

In other words, only an estimated 10% of timber theft cases were being prosecuted.

It’s even rarer that timber theft cases are prosecuted for Lacey Act violations in US.

This case could signify a change in enforcement of forest laws and Lacey Act violations by U.S. authorities. In fact, on April 27th, the United States Attorney Christopher R. Kavanaugh said “The Department of Justice will vigorously prosecute those who steal natural resources from federal lands for their personal enrichment,”

“The Department of Justice will vigorously prosecute those who steal natural resources from federal lands for their personal enrichment,”

United States Attorney Christopher R. Kavanaugh

Will US hardwoods face stricter controls in other markets?

Not only has enforcement of timber trade laws within the U.S. been lax, but U.S. hardwoods have appeared to have a quasi exemption from other timber trade laws like the European Union Timber Regulation (EUTR).

(U.S hardwood shipments are probably in violation of the EUTR on due diligence requirements alone. (For more on this: Are US hardwood imports in violation of the EU Timber Regulation?)

Lobbyists for the U.S hardwood industry, like those working with the American Hardwood Export Council, claim that there is “negligible risk of any exported US-origin hardwood being illegally sourced”. This claim is apparently based on a study that the industry group itself commissioned. See: Did AHEC pay to exempt US hardwoods from the EUTR?

Third-party organizations advising buyers on supply chain risks echo similar claims. For example Preferred by Nature’s risk assessment labels the whole United States geographic origin of low risk.

(Risk assessments at any jurisdictional level is poor quality data. They ignore the fact that probably all jurisdictions have both illegal and legal actors. Even in highly managed British Columbia where 40% of timber inspections in June 2021 were allegedly non-compliant.)

The relative free-pass that U.S. hardwoods receive by timber trade regulations might be screeching to a halt.

If the Lacey Act becomes consistently enforced in timber supply chains in the U.S., will other markets, like the EU, increase scrutiny of U.S. hardwood shipments? For how much longer can the EU and EUTR enforcing/monitoring agencies maintain claims that U.S. hardwood supply chains are low-risk in terms of illegality?

Moment of reckoning for U.S. hardwood supply chains

Application of the Lacey Act to timber supply chains originating in the U.S. has been almost non-existent.

Instead, Lacey Act enforcement has primarily been on wood products originating in other countries.

Inequitable enforcement of the Lacey Act has been devastating for some producing regions. In Peru, for example, the U.S. government committed more than US$ 90 million on forest governance, including law enforcement. However, use of the Lacey Act to penalize U.S. importers of Peruvian hardwoods lead to demand destruction. And still, Peru’s deforestation rate climbed even higher.

The Giles County, Virginia Walnut timber theft case could be precedent setting. If so, this could be a moment of reckoning for US hardwood supply chains and those who have been telling downstream buyers US hardwood supply chains are “low risk” or “negligible risk” in terms of legality.