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Mr Natural

Gibson Acknowledges Violation

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It figures, all the cheats on wall street & in the banks manage to make deals where they admit wrongdoing, but the rest of us never get that kind of sweetheart deal.

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I'd say they did this simply because it was the cheapest way out of a sticky situation. Purely a business decision.

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Where does this say they admitted to wrong-doing? Nowhere. I agree with Gruhn. They probably saw how much it was going to take to fight this stuff, did a cost-benefit analysis, and said "screw it" and just paid up so they can continue working.

Chris

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did a cost-benefit analysis, and said "screw it" and just paid

Exactly.

I work for an internation multi billion dollar company so I get to see how some of these things work - a lot of the decisions they make ignore all common sense and don't follow any pattern for intelligent thought - simply because it is the cheapest most cost effective short term option.

I believe Gibson went this path.

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I don't disagree with you guys that it was purely a short term financial decision, but they did admit guilt:

The settlement says a Gibson employee learned during a 2008 trip to Madagascar — the source of some of the ebony wood that was seized — that it was illegal to import unfinished wood and sent a report about it to his superiors, including company President David Berryman.

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They 'admit guilt' because that was required for a settlement to be reached. Besides, the whole situation is Kafka-esque in the extreme, and the Lacey Act remains one terrifying piece of legislation. It's a shame this wasn't battled out in court; we now still don't have legal precedent or a judicial ruling on whether the law is just, fair, and/or being interpreted correctly.

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Yetzer, your quote still doesn't admit fault. It's also a false statement. So you'll see a lot of indian rosewood come in with a roundover routed into one side so it's not "unfinished product." Then it's legal. Also, importing wood from madagascar IS legal if it's from legitimate sources (non-national forest sources); even in raw form. So, what I read that as is you had some employee go over there, see something he interpreted as illegal, sent out an email, and he was wrong, so they ignored it. I don't think Gibson is wrong, nor have they outright said they were. Purely financial.

I agree with Ma-T though, would have been nice to have a final say on this from the supreme court.

Chris

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I take it that if you admit guilt for whatever reasoning, you can't exactly appeal against it then.

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so what happens to the wood? a massive haul of a rare resource, but its illegal - do they burn it?

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They would need to issue some form of licence for use along with provenance otherwise it would still be a hot potato. They are probably sent to the warehouse of X-files next door to the office of cancer man along with conflict diamonds and moon landing evidence or maybe they'll use it to perform sting operations on Bob Taylor.

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so what happens to the wood? a massive haul of a rare resource, but its illegal - do they burn it?

Most likely, yea. All get put in a furnace.

Sounds like a deal was struck that allows both parties to save face. Gibson pays a big fine & looses a huge pile of materials, making an example of them to others. you know "we dont care how big you are - if you break the law were gona nail you".

Then they donate a nice round sum towards timber conservation as a gesture to proove they are environmentaly conscious.

So then they go back to production & any further embarrising enqueries are avoided - so neither Gibson or the state has to deal with any further probing into the situation, regardless of who screwed up what.

Politics & money man. all one big mess.

in the current economic climate - would you like to be the guys seen as closing down the biggest name in an industry thats seen as a piece of America ?

You'd be about as popular as an Italian administration closing down Ferrari.

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Apparently they get the wood back as part of the settlement

Here's the long version:

http://www2.gibson.com/News-Lifestyle/Features/en-us/Gibson-Comments-on-Department-of-Justice-Settlemen.aspx

The Lacey act is essentially a good law, and parts of it certainly do need to be amended, but Gibson was indeed playing dirty despite all Henry J's whining about political persecution.

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The problem with the Lacey Act is that you have to abide by OTHER country's laws... but here's the kicker... the US interprets that country's laws when they prosecute. In the case of India (the lumber they're getting back) the US interpreted India's laws differently than India itself did! That's a very dangerous combination there... the US's opinion of "finished material" is different from what India says it is.

Settling is also a problem here though. Because they settled, there's no real "answer" that comes from this. No real "who was right, who was wrong." It's exactly what ya'll said; both sides saving some face and no clear loser. Well, in that case, the clear loser is the next guy that gets jumped by this because there's no hard and firm legal ruling on it.

Chris

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Straight off the Gibson website,

"We felt compelled to settle as the costs of proving our case at trial would have cost millions of dollars and taken a very long time to resolve. This allows us to get back to the business of making guitars. An important part of the settlement is that we are getting back the materials seized in a second armed raid on our factories and we have formal acknowledgement that we can continue to source rosewood and ebony fingerboards from India, as we have done for many decades."

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The problem with the Lacey Act is that you have to abide by OTHER country's laws... but here's the kicker... the US interprets that country's laws when they prosecute. In the case of India (the lumber they're getting back) the US interpreted India's laws differently than India itself did! That's a very dangerous combination there... the US's opinion of "finished material" is different from what India says it is.

This is a misconception. What happened was the shipment in question was incorrectly classified as being 5mm or less in thickness, and was cleared for export as such, when in fact it was clearly over 5mm, a category India would have not allowed to be shipped. It was determined that the labels were intentionally changed to deceive customs, and thus it was a violation of international trade law. These are some of the many details mister Henry leaves out on Fox news and such.

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Here is a more accurate and detailed account of the two raids on the Gibson factory:

2009 involves woods illegaly logged in protected Malagasy forests, which had been "seized in place" at Roger Thunam's yard by the government under orders not to be sold or moved -- but Gibson's man on the scene told the factory that although illegal he could get them into the "gray market" by laundering them through the German wood broker Nagle (whose owners also own Luthiers Mercantile). The woods themselves, not the Gibson company, are named as the defendant, but since wood has no personal rights no charges need to be filed. Meanwhile, Gibson is refusing to sign interrogatory documents stating that the seized wood really did originate in Madagascar and their lawyers keep filing stays of motion, a defense tactic which prevents the courts from bringing charges on the company. If Gibson does admit the woods origin, they'll lose their claim to get them released. The courts are getting tired of this game, and may overrule and proceed with charges, since the delays are now at the point of interfering with a criminal investigation.

The 2011 raids are about legally harvested woods, but supposedly due to a series of paperwork errors the shipment intended for LMI as the consigneee (who were in turn selling them incrementally to Gibson) was mistakenly declared as going to Gibson as the consignee, and since Gibson was already being investigated this discrepancy understandably triggered the most recent raids and confiscations. The 10mm thick fingerboard blanks left India under tariff code 9209 (parts for musical instruments) as approved my India's Ministry of Trade in "clarification letters", but were intended to enter the U.S. as 4407 items (sawn wood or logs over 6mm thick, a product classification which India has made illegal to export). Switching tariff numbers on a shipment isn't kosher, but to make things even worse a new employee at the brokerage arbitrarily changed the number to 4408 (veneers under 6mm thick). BUT...since tariff classes and definitions are determined by the World Customs Organization (WCO) through an approval process of the 170 subscribing nations, neither the U.S. nor India are authorized to redefine those product classes regardless of how many "clarification letters" are generated. Fingerboard blanks don't at all qualify as 9209 ready-to-use "bolt-on" instrument parts, but instead exactly fit the legal description of 4407 sawn woods.

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so what happens to the wood? a massive haul of a rare resource, but its illegal - do they burn it?

They will not burn the wood. They will work to certify it and distribute it back into circulation over time. In the grand scheme of things, 220K worth of wood is not that much wood.

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That figure depends at what point in the process the wood is at. Anybody have an idea of physical quantity? I'd guess 10 pallets?

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