TREE Act

The TREE Act prohibits importing or selling in U.S. interstate commerce any goods produced from deforestation after December 31, 2020, starting January 1, 2029. It also bans false labeling of such goods.

Sec. 2, Prohibition on import and sale of deforestation goods: Starting January 1, 2029, operators and traders cannot import deforestation goods into the U.S. or introduce, manufacture, sell, trade, or advertise them in interstate commerce. False labeling of such goods is also prohibited.

Sec. 3, Enforcement: Customs and Border Protection must require importers of covered commodities (cattle, cocoa, palm oil, rubber, soy, wood) to submit a due diligence statement with details like trade name, quantity, wood species, and for high- or moderate-risk countries, origin and geolocation. Violators face civil penalties up to 4% of their prior year U.S. revenue, confiscation of goods, and up to 12 months ineligibility for federal contracts and funding. Serious or repeat violations can lead to a 12-month import ban. Starting December 31, 2029, inspection rates for deforestation goods are set at 9% for Level I (high-risk) countries, 3% for Level II (moderate-risk), and 1% for Level III (low-risk). The Interior Secretary must establish an interstate commerce enforcement plan by January 1, 2029.

Sec. 4, Country categorization based on deforestation risk: By December 1, 2029, and every two years, the U.S. Trade Representative must categorize countries as Level I (high risk), Level II (moderate risk), or Level III (low risk) based on deforestation rates, agricultural expansion, and production trends since December 31, 2020. Regions within a country can have different risk levels. Until the first categorization, all countries are Level II. The Trade Representative must engage with high-risk countries to reduce their risk and notify countries of changes, allowing 6 months for response.

Sec. 5, International assistance: The Secretary of State must prioritize Level I countries for deforestation-related financial assistance. Half of all civil penalties collected under the Act must be used to help underdeveloped countries with deforestation and forest degradation management.

Sec. 6, Definitions: Key terms are defined, including 'agriculture use' (farming or livestock), 'covered commodity' (cattle, cocoa, palm oil, rubber, soy, wood), 'covered product' (items made with a covered commodity), 'deforestation' (forest loss from conversion to agriculture or tree plantations), 'deforestation good' (covered items from land deforested or degraded after December 31, 2020), 'forest' (land over 0.5 hectares with trees over 5 meters and 10% canopy), 'forest degradation' (human-driven structural changes including conversion of primary forests), 'operator' (anyone placing or importing relevant products in U.S. commerce), and 'trader' (anyone in the supply chain making products available for U.S. import).