George Gruhn Hates the Lacy Act. Say it has cost him $2mill in overseas business.

Posted on: May 25, 2012

WASHINGTON — – Before George Gruhn opened a vintage guitar shop in downtown Nashville, he pursued a different passion: zoology.

He began collecting insects, frogs and turtles at age four. He went on to earn degrees in animal behavior and zoology from the University of Chicago and Duke University. Today, 15 snakes and an African Gray Parrot populate his office at Gruhn Guitars at 4th and Broadway, where he identifies the features of vintage guitars much as he once classified wild animals.

But the self-described Democrat and environmentalist has no love for federal and international laws aimed at protecting endangered species. One of his top targets is the century-old Lacey Act, which attracted national scrutiny after federal agents raided Nashville-based Gibson Guitar last summer.

Gruhn says he essentially stopped buying and selling guitars internationally after amendments to the Lacey Act in 2008 barred imports of wood that were illegally exported under another country’s laws.

International trade once accounted for 40 percent of Gruhn’s business, and he said giving it up costs him more than $2 million a year in lost sales. But he doesn’t think the bureaucratic hurdles set up by the Lacey Act and other conservation laws give him much choice.

“It’s currently easier to get a passport and visa to travel to Pakistan than it is to legally ship a (vintage) Martin guitar,” said Gruhn. “They’ve made it actual living hell to import or export such a thing, and that’s what my business relied on.”

Vintage-guitar merchants like Gruhn must deal with as many as three different federal agencies when they ship guitars internationally: the U.S. Fish and Wildlife Service (FWS), the Agriculture Department’s Animal and Plant Health Inspection Service (APHIS), and U.S. Customs and Border Protection.

To import guitars into the U.S., retailers must fill out a Lacey Act declaration saying the wood in the guitar was harvested legally under the exporting country’s laws — in addition to the usual customs paperwork and inspections. If a guitar contains wood that was exported illegally, the retailer could be forced to forfeit the guitar, pay a fine, or possibly even spend time in prison.

Even more problematic, Gruhn said, is the web of export regulations established by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a 37-year-old international agreement that bans trade in endangered animals and plants.

Some of the endangered species listed by CITES, such as Brazilian rosewood, ivory and tortoiseshell, are regularly used to make vintage guitars and other instruments. Instruments made before the CITES protections were enacted can still be traded internationally, but they require inspections and extensive paperwork.

Here’s how Tennessee retailers get approval to export a vintage guitar containing protected species of wood or animal products:

First, they must get export licenses from FWS and APHIS, which have to be renewed every year or two. Then, they must apply for FWS permits to export each guitar containing protected plant or animal materials.

Retailers who get a permit must ship the guitar and export documents to be inspected in another city, because there are no designated inspection stations in Tennessee. APHIS officials examine wood products containing Brazilian rosewood and other protected woods, while FWS agents inspect products containing animal products such as ivory. The nearest city with inspection offices for both agencies is Atlanta.

Individual musicians also need permits to leave the country with vintage guitars containing Brazilian rosewood, ivory or other protected materials, but they don’t need to submit Lacey Act paperwork when they come back to the U.S., according to APHIS officials. Federal officials say they focus on commercial vendors and haven’t heard of any enforcement actions being taken against musicians.

The fees associated with permits and inspections can add up to more than $200 per guitar, said Jim Goldberg, Washington counsel for the National Association of Music Merchants. The shipping and insurance to get a guitar to an inspection station can cost another $150 or so, merchants say.

Time is the biggest cost, according to merchants. FWS officials say approving a permit usually takes between two and three weeks and inspections generally occur the day an instrument is received. But Goldberg said the entire process — from applying for a permit to shipping the guitar to the buyer — typically lasts closer to two or three months.

Gruhn Guitars’ latest attempt to ship two guitars to the Netherlands took five months, according to business manager Christie Carter. She said she applied for a permit on Sept. 19 and received it on Nov. 8, but the guitars weren’t shipped until Jan. 26. Carter said they might have been shipped two weeks sooner had she better understood where to send them for inspection.

Few international buyers are willing to wait five months, Gruhn said.

“It’s a nightmare,” he said. “I don’t feel that I should be exempt from the law or exempt from needing a permit, it’s just that they make them so impossible to get.”

Merchants say it wasn’t always this difficult. They used to be able to copy one master permit to send with guitars instead of applying for individual permits for each shipment, saving anywhere from several weeks to several months.

Tim Van Norman, chief of the permits branch at FWS, said his agency stopped that practice seven or eight years ago because it caused problems with enforcement agencies in other countries.

But he said FWS is moving in that direction again in an effort to speed things up for vintage-guitar and antique dealers. As of a few months ago, dealers can receive a bunch of permits in advance and report details about individual instruments after they’ve been shipped — without keeping a detailed and current list of their inventory.

Van Norman said FWS employs 16 people to issue some 17,000 permits a year. APHIS officials say the office that processes Lacey Act declarations employs three or four people.

Despite hassles created by regulation, federal officials said, it’s important to remember that the Lacey Act and CITES protect the natural resources upon which guitar dealers depend.

“Protecting these plants is not only good for the plants themselves, it’s also good for businesses to protect their future livelihoods as well,” said Gary Lougee, Lacey Act program specialist at APHIS.

Gruhn agrees, but thinks Congress and the agencies could simplify the system.

The RELIEF Act — introduced by Reps. Jim Cooper, D-Nashville, and Marsha Blackburn, R-Brentwood — would exempt from Lacey Act requirements wood products made before 2008. And Republican Sen. Lamar Alexander said last week that he’s working with regulators to exempt older wood and reduce Lacey Act paperwork.

Gruhn says those steps would help, but wouldn’t address the export hurdles created by CITES.

John Thomas, a law professor at Quinnipiac University, said musical instruments should be exempt from CITES regulation because they account for just 1 percent of tropical hardwood use. Another solution, he said, would create “passports” for individual instruments to allow musicians to take instruments out of the country without permits. Van Norman said FWS officials plan to present that idea next spring at a meeting among nations that adhere to CITES.

More broadly, Thomas said, there should be a single set of regulations — and a single agency — governing the transport of vintage instruments.

Gruhn said the complexity of the current system translates into reduced profits and growing uncertainty. He hasn’t laid off employees but said, “I have trouble employing the ones I’ve got. I haven’t given raises, my personal income is down, and the dollar volume of my sales is down.”

That makes it harder to put food in the mouths of his nearly two-dozen dependents — including the 15 snakes and the parrot, plus five wildcats and a house cat.

Contact Elizabeth Bewley at ebewley@gannett.com or follow her on Twitter @ebewley

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