Washington state importer ordered to hire CCO in response to Lacey Act violations

Tip of the Scale, a Tacoma, Washington, importer doing business as LD Kitchen and Bath, was placed on three years of probation as part of a settlement with the DOJ on violations of the Lacey Act, which covers the import of wood products. The company also agreed to pay $850,000 in import duties before it reached a settlement on the export control violations, the DOJ said Friday in a press release.

The details: Between January and May 2020, Tip of the Scale imported five shipping containers with wooden cabinets and vanities that were “falsely declared” to be made with a “false species” of wood harvested in Malaysia. The items were made from wood harvested in China, the DOJ said, violating the Lacey Act, which requires importers to file a declaration “which describes the scientific genus and species as well as the harvest country of imports that contain timber,” the DOJ said.

Compliance considerations: The company entered into a compliance plan with the DOJ that required it to hire its first chief compliance officer to be “responsible for the oversight of the company’s import practices, including meeting all requirements of the Lacey Act and related regulations.” The CCO should report directly to the CEO, the plan said.

Company employees should alert the CCO “of any proposal to import goods before the contract for the import and purchase of goods is signed or a purchase order is issued” and the order cannot proceed without the CCO’s approval.

The CCO should develop policies and procedures to ensure that LD Kitchen and Bath “complies with all applicable trade laws,” conducts risk assessments on new vendors, evaluates individual purchase orders, and subjects compliance procedures to an in-person audit by a company employee or third-party audit firm, the plan said.

The CCO will also be responsible for all remediation and mitigation, which include training for all employees, disciplinary action for noncompliance, creating a procedure for the anonymous reporting of violations as well as policies on anti-retaliation and recordkeeping.

Tip of the Scale did not respond to a request for comment.