Customs Update: An egg by any other name...
(Published in The JOURNAL of COMMERCE ONLINE March 28, 2006)

Whether you look at the DP World fiasco or the multitude of bills being proposed in Congress, it is clear that politics keeps rearing its ugly head when it comes to international trade issues; and the venues in which that happens keep expanding.

On March 15, Immigration and Customs Enforcement issued a press release about one of the more unusual cases with which we have been involved. It all began in 2001 when representatives of the Chinese consulate in Los Angeles approached U.S. Customs and asked for assistance in stopping what the Chinese called the theft of their cultural property. What they meant was the exportation from China and Hong Kong of dinosaur eggs. It is important to keep in mind these are mineralized rocks that are traded as commodities and, if restored, are sold as knick-knacks and for decorative purposes. Some of the more prominent pieces are also displayed in museums.

Customs and ICE conducted their investigation and, as noted in the press release, a seizure ensued. What is interesting about this case first and foremost is that it involves dinosaur eggs. Who knew there were admissibility issues with such a commodity? Perhaps even more interesting is these dinosaur eggs are freely traded and sold, and not just in the U.S. but worldwide. The law now requires a permit to export such items from China, even though they are still readily discovered throughout the country-side, but no such requirement is imposed in Hong Kong and it is the marketplaces there where eggs remain readily available for sale and trade.

Equally perplexing is the fact that Chinese law did not bar trading in cultural property until the mid-1990s and even then, it was not publicized in the West. In fact, until this case was initiated, no one in the U.S. had any idea there was an issue. From a constitutional point-of-view, how can you be held to violate U.S. law if you have no notice there is a law you could be violating? Think about how much more preposterous it is to have the U.S. government seek to prosecute you in the U.S. for violations of Chinese law if you are a foreign national? But, that is what happened to the defendant in this case.

Now, in its press release ICE claims the goods were mislabeled as geological specimens and minerals. Well, that is exactly what they are. In fact, to be technically correct, these are paleontological specimens which is a sub-set of geological specimens, but Washington didn't want to be confused by the facts. The focus of what ICE and Customs argued was that if these items had been called dinosaur eggs, inspectors would have stopped them from entry. On the other hand, the case has been pending since 2001, but neither ICE nor Customs has yet seen fit to publish anything, not even a What Every Member of the Trade Community Should Know About Informed Compliance publication, to notify the importing community (or even its own inspectors) these goods cannot be traded. So, does anyone really believe an inspector would have known there was a problem to import these goods? On the other hand, putting the word "eggs" in the invoice description would surely have had CBP and the Department of Agriculture tying up the shipment for weeks.

So, who's telling the truth? Let's look at what ICE talked about in its press release. It made mention of a guilty plea, a correct statement of fact. It also mentioned that the defendant was subjected to one year of probation, ordered to pay a fine and agreed to forfeit certain fossils which had been seized. All of these facts are true. However, ICE also engaged in some slight of hand. It didn't really tell the truth. If you look at the public record, you will see that the plea which was agreed to by all parties involved a violation of the marking statute, 19 U.S.C. 1304. It was not an acknowledgment that anyone was smuggling goods. No one admitted the Chinese were correct in their claims that dinosaur eggs could not be bought and sold, or even that they qualified as cultural property.

If the Chinese really believe they need to protect their cultural property, why do its dinosaur eggs remain freely traded in Hong Kong? What about those available on online auctions or at any number of the trade shows around the world? What steps have the Chinese taken to let the world know of their concerns? Certainly the Italians and the Greeks have been vigorous in publicizing their efforts to seek recovery from museums and other art enthusiast who have in their possession artworks thought by either government to have been stolen. Where are the comparable efforts by the Chinese?

What this case really came down to was Washington putting tremendous pressure on the Chinese to reform their domestic laws and activities when it comes to textiles, intellectual property rights, conversion of currency and the like. In return, the U.S. wanted to deliver something to the Chinese and so a large pile of hyperbole was created to make a minor situation into something major. If the enforcement arm of Homeland Security is willing to engage in such actions, and they are obviously politically motivated, what else can we expect from our government when it comes to enforcing the law?