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SurfGuitar101 Forums » The Shallow End »

Permalink Gibson Guitars Made with Illegal Wood?

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The case from a legal perspective:

http://www.lexology.com/library/detail.aspx?g=4e8c5504-216d-41af-ab4f-e863d3989d21

Ivan
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"Please keep in mind that the Lacey Act is a fact-based, rather than a document-based, statute. Therefore, documents alone will not protect your company against Lacey Act liability if your company has not performed its due diligence."

Herein may lie the problem for Gibson, if Fish & Wildlife's claims are true.

The Mystery Men?
El Capitan and The Reluctant Sadists
SSS Agent #31

Richard, that's the paragraph that caught my attention, as well.

Here's another article with some new info:

http://www.wibw.com/nationalnews/headlines/Gibson-Guitar_129266483.html

I personally am finding this whole thing very interesting, obviously. I'm looking forward to learning more about it, and seeing how it gets resolved (though it'll probably take quite a while - wheels of justice usually grind slowly!).

Ivan
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From the perspective of furniture manufacturers - again, some new info here, including a link to the warrant for the Gibson raid:

http://www.furnituretoday.com/article/542690-Gibson_raid_raises_attention_on_Lacey_Act_enforcement.php

Ivan
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Wow - that Furniture Today article linked to the request for Search Warrant, which outlines an awful lot of detail that the Special Agent filed for approval; shipment quantities & details (multiple shipments over ~12 months in 2010, 2011), import declaration details, final consignee details of record (affidavit suggests it is not documented as Gibson in at least one/some instances, but the named final consignee says they are warehousing for Gibson), and insights from their 2009 "visit."

The warrant application is a pretty exhaustive (31 pages!) building the case for the latest follow up visit. ...Granted, from what I see in the warrant, it is still unclear why it was "an armed raid" - in fact I didn't find anything that suggested armed/dangerous in the affidavit.

It will be interesting to see what charges actually materialize and the outcome of this all.

Fady

El Mirage @ ReverbNation

Last edited: Sep 06, 2011 13:35:45

Yeah, Fady, that's the thing that I find most outrageous about this whole thing. None of us know whether Gibson is guilty or not, and hopefully we'll find out in due course. But was it necessary to have a surprise raid by a group of agents armed with automatic weapons? This is the part that I think a lot of people are finding completely over the top. Some quotes on this from the furniture article:

"Gibson suggested that if the U.S. government had communicated its intent, the company would have cooperated without having to disrupt its production...."

"John Dellinger, corporate broker for third party logistics broker Globe Express, where he oversees Customs compliance, said the Gibson case is likely to spur more interest on its more recent developments with Lacey Act, he said.

Dellinger said the latest raid in Nashville looks a little overzealous since Gibson reported that no charges were filed and it claimed the items were legitimately imported.

When issues arise at customs, more typically, instead of U.S. Fish and Wildlife Service agents raiding facilities with automatic weapons, a Form 28 or Form 29 information request or a customs audit is initiated for specific information about imports.

"Just a regulatory audit might take two or three weeks and they might come back and give you a penalty or give you a chance to work. Not these guys, not this law, they come in with agents with guns and say let me have all your records, start seizing product and you haven't even committed a crime," Dellinger said.

"That's what kind of upsetting about this law and the way they enforce it. That's the big thing for the importer."

Ivan
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Last edited: Sep 06, 2011 13:26:39

Incidentally, these two things also caught my eye:

From the furniture article:
"[Anne Middleton, outreach coordinator for the Environmental Investigation Agency, a nonprofit environmental watchdog group} also took issue with claims that the Gibson raid was an attack on U.S. workers: "Why can't Gibson use American hardwoods and create their American manufactured product with trees that grow here in the United States?" she said."

Does anybody know if either ebony or rosewood are ever grown in the US? I've not heard of it, and I presume it's because they need a tropical climate - do I have that right?

Also, from the WIBW article above:

"The latest raid revolves around a trade issue. The wood was allegedly exported illegally because it was unfinished and too thick to be a veneer, the only unfinished wood India allows to be shipped, according to a Justice Department affidavit. Why the U.S. government would enforce an Indian trade law can be explained by century-old legislation called the Lacey Act, which mandates that American companies observe the laws of foreign countries in the trade of many animal parts, plants and their products, including wood, which was added to the act three years ago. However, Juszkiewicz insists the wood is legal under Indian law because it's a finished product -- a fingerboard that gets attached to the neck of the guitar. He said he has letters from the Indian government to prove it."

This is very interesting. Ebony and rosewoord when used for fretboards are not 'finished', in a sense that any sort of lacquer is applied to it - the wood is basically raw and exposed (if I understand these things correctly). Can this be the source of the conflict? It would be interesting to find out what exactly the Indian law means by 'finished wood', and if this conflicts with guitar-makers need for fretboard wood.

Ivan
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A massive campaign of phone calls expressing concern about the raid on Gibson has overwhelmed Tennessee Congressman, Steve Cohen's office this morning.

"Support for Gibson Guitars against DOJ intimidation
We are focusing on Tennessee today because that is where Gibson is located primarily. If all you can do is make three phone calls..make it to Congressmen Jim Cooper 202 225-4311 Nashville, Steve Cohen 202 225-3265 Memphis and Senator Lamar Alexander 202-224-4944....".

Bob

Bob

IvanP wrote:

This is very interesting. Ebony and rosewoord when
used for fretboards are not 'finished', in a sense that
any sort of lacquer is applied to it - the wood is
basically raw and exposed (if I understand these things
correctly). Can this be the source of the conflict?
It would be interesting to find out what exactly the
Indian law means by 'finished wood', and if this
conflicts with guitar-makers need for fretboard wood.

I think this is a key part of it, based on the affidavit. Paragraphs 20 - 23 highlight what the Agent claims as falsification of import codes & goods descriptions which suggest Lacey Law compliant imports (as finished parts of musical instruments) - when under inspection they had "(1,250) pieces, with the dimensions of 510-530 x 75/70 x 10mm" (clearly not finished...).

The affidavit (remember - this is the Agents request to justify their search & confiscation) further paints a picture of suspected deliberate falsification and deception through questionable final / ultimate consignee of record. There are many references to Luthier Mercantile as US importer of record. Lutier Mercantile was questioned and identified Gibson as the actual ultimate consignee, according to the Affidavit.

Net net - the Special Agent tries to paint a recurring picture of intentional efforts to skirt the laws. I don't suspect he's sought the Search Warrant to merely outline egregiously incompetent records and logistics management - which would be another explanation for what they've documented.

Fady

El Mirage @ ReverbNation

Last edited: Sep 06, 2011 14:18:16

Onslow_Beach wrote:

I think this is a key part of it, based on the
affidavit. Paragraphs 20 - 23 highlight what the Agent
claims as falsification of import codes & goods
descriptions which suggest Lacey Law compliant imports
(as finished parts of musical instruments) - when under
inspection they had "(1,250) pieces, with the
dimensions of 510-530 x 75/70 x 10mm" (clearly not
finished...).

We'll see if this is the primary problem. Speculating here, if Gibson is honest about having the Indian govt's certification of the wood as being 'finished' (in a sense that the only thing remaining to do with it was to have it installed on a guitar neck), then it'll be very interesting to see how the court will resolve this conondrum. It seems like the key issues then may be, what qualifies as finished wood under Indian law - and can the US govt trust the Indian govt to determine that correctly under its own law?

Ivan
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Last edited: Sep 06, 2011 14:33:06

To answer Ivan's question about these woods; Yes, they are tropical and there are no areas with the US that are suitable for their growth (Except maybe Hawaii?).
I also could understand why Gibson would be somewhat "under the radar" while importing ebony and rosewood--not to do anything illegal, but to keep the sourcing private. There is competition for the limited supplies of these woods. Also, wood storage requires the right conditions, and it may be operationally cheaper for them to store the wood with a facility properly set up for conditions.

IvanP wrote:

Onslow_Beach wrote:
Speculating here, if Gibson is honest about having the Indian
govt's certification of the wood as being 'finished'
(in a sense that the only thing remaining to do with it
was to have it installed on a guitar neck), then it'll
be very interesting to see how the court will resolve
this conondrum. It seems like the key issues then may
be, what qualifies as finished wood under Indian law -
and can the US govt trust the Indian govt to determine
that correctly under its own law?

Well, this is where it gets messy. Gibson says they are getting it legally with affirmation from the Indian Government.

However the physical shipment history documented in the Affidavit says Luthier Mercantile International imported shipment from India. The Air Way Bill says the shipment was exported by Atheena Exports of Inida to the Ultimate consignee Theodor Nagle GMBH (Hamburg Germany) with a note to notify Luthier Mercantile (of Windsor, CA) upon import. The shipment was marked for interstate commerce to Nashville TN to an unidentified consignee. This is essentially section 20 of the Affidavit.

Further in the breadcrumb trail, the Special Agent outline shows another hand in transport & storage, Red Arrow Delivery Service - a Nashville TN outfit. There appears to be a mix of formal freight documentation (no refeference of Gibson) and other communications between Luther Mercantile & Red Arrow that specifically recognize Gibson as recipient.

So... Gibson says they've legally imported it w/ approval from the Indian government. And freight records do not specify Gibson in the shipment - but many involved saying it's Gibson stuff (which is repeatedly mislabeled and mis-categorized).

Again, I'll say... this is all the position of the Special Agent asking for approval for 4 search warrants - which were obviously granted, hence the raid. I am simply extracting and or paraphrasing from that 31 page Affidavit document.

And you're absolutely right, Ivan - one other yet to be raised complication here is the Indian Government's side of this. Granted Lacey Law doesn't care about Indian corruption vs. their written law, corruption is well recognized. Might Gibson say they were playing on the up and up and a victim of corruption from the sending side?

...we may never know.

Fady

El Mirage @ ReverbNation

Last edited: Sep 06, 2011 15:09:33

Meanwhile, the Chinese are loading up on exotic woods-especially piano and furniture manufacturers. I was made aware of this when I was doing consulting for Pearl River Piano Co. and have confirmed that it is still the case. I'll bet they don't give a rip about the Lacey Act. And, they ship FINISHED products.

Along the lines of what Skip (elraydlp)mentioned, here's an interesting NYT article about Madagascar, bad government, corruption, black markets and environmental threats.

http://green.blogs.nytimes.com/2011/09/07/film-underlines-plight-of-the-lemur/

Ivan
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Chinese manufacturers are not only stocking up on exotic, tropical species. I was told they also have huge stockpiies of flame and birdseye maple, spruce, etc. Some of the student-quality violins I saw had more flame than a PRS "10" Top.

IvanP wrote:

Like the key issues then may
be, what qualifies as finished wood under Indian law -
and can the US govt trust the Indian govt to determine
that correctly under its own law?

I'm not sure what you mean by "can the US govt trust the Indian govt"?

Dalibor wrote:

IvanP wrote:

Like the key issues then may
be, what qualifies as finished wood under Indian law
-
and can the US govt trust the Indian govt to
determine
that correctly under its own law?

I'm not sure what you mean by "can the US govt trust
the Indian govt"?

What I mean is, is it good enough from the perspective of the US govt to get a permission from Indian govt to import the wood - will that count in the US courts? In the case of Madagascar, it apparently isn't good enough, due to rampant corruption there. We'll see about the Gibson case (they claim that they have Indian govt's permission to import that wood in exactly the form it was in, which the US govt is taking issue with.) In addition, it appears that the Lacey Act in the US may prohibit importation of certain woods (or other resoucres) that the country of origin may be willing to export but that the US govt does not want exported from those countries. In other words, the US govt has taken it upon itself to try to protect endangered resources when the original country doesn't itself do so.

All this stuff is far from being clear, which is I think one of the many problems with it. In order to be effective, law has to be very clear and transparant. The Lacey Act seems to be neither. That opens the doors to corruption and political abuse. Very problematic.

Ivan
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Last edited: Sep 07, 2011 14:07:12

*
> In other words, the US

govt has taken it upon itself to try to protect
endangered resources when the original country doesn't
itself do so.

Do you really believe in this? And why would US govt wants to protect endangered resources? Corrupted governments? We certainly don't know if Indian or Madagascar govts are corrupted. Do we? I'm not buying this. If the wood is FSC certified that should be enough. FSC certification is valid in Europe.

As Side Note
Around 3 pm 9-07 It was on Fox News and they were at the Gibson factory.
The owner says he's a Republican...Gibson Is a Non Union Shop.
The Governmnent took $1 million worth of Indian Rose wood that was unfinished last month.

The feds told Gibson that it would be legal if the Rose wood Fret boards
were cut and finished outside the United states but it is Illegal to
import Unfinished wood.
Gibson says its the same wood other Guitars companies are using in the U.S>

Just reporting what was on.
Pete Analog -Surf

I'm so confused.........???????????

Hodad makin' the scene with a six pack.

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