Short title

This Act may be cited as the

Trade Responsibly for Environmental Emissions Act

or the

TREE Act

Prohibition on import and sale in interstate commerce of deforestation goods

(a)

In general

Beginning on January 1, 2029, it shall be unlawful for any operator or trader— (1)to import into the United States any deforestation good; or (2)introduce into interstate commerce, manufacture for introduction into interstate commerce, or sell, trade, or advertise in interstate commerce in the United States any deforestation good. (b)

False labeling

It shall be unlawful for any operator or trader to make or submit any false record, account, label, or other information, with respect to any deforestation good that has been, or is intended to be, imported into the United States.

Enforcement

(a)

Due diligence statement

The Commissioner of Customs and Border Protection shall require a due diligence statement that complies with subsection (b) to be provided by each operator or trader who imports into the United States a covered commodity. (b)

Requirements

The due diligence statement required under subsection (a) shall contain— (1)a description of each covered commodity, that includes— (A)the trade name of each such commodity; (B)the quantity and required unit of measurement, as determined by the Commissioner of Customs and Border Protection, of each such commodity; (C)with respect to each such commodity that is wood or is otherwise produced using wood, the common and scientific names of such wood; and (D)with respect to each such commodity coming from countries categorized under section 3 as a Level I or Level II risk, the country of origin and geolocation coordinates, as determined practical by the Commissioner of Customs and Border Protection; (2)the name, postal address, and contact information of each person that supplied to such operator or trader each covered commodity; (3)adequately conclusive and verifiable information that the covered products are deforestation free; and (4)any other information the Commissioner of Customs and Border Protection determines necessary to determine that each covered commodity is not a deforestation good and has been produced in accordance with the relevant law regarding deforestation of the country of origin. (c)

Civil Penalties

(1)

In general

In addition to any civil or criminal penalty that may be imposed under title 18, United States Code, or any other provision of law, any operator or trader who violates this Act, or any regulation issued under this Act, shall— (A)be assessed a civil penalty in an amount not more than 4 percent of the total United States revenue of such operator or trader for the fiscal year preceding the issuance of such fine; (B)have each deforestation good confiscated; and (C)for a period of not more than 12 months, be ineligible— (i)to enter into any contract with any Federal agency for the procurement of goods, materials, and services; and (ii)for any Federal funding, grants, and concessions. (2)

Determining fine

In calculating each fine required under paragraph (1), the United States Trade Representative may consider— (A)the environmental damage caused by the deforestation good; (B)the ability of the violator to pay; (C)ensure such fine effectively deprives the violator of the economic benefits derived from importing the deforestation good; and (D)gradually increase such fine for each repeat violation until the fine is in an amount equal to 4 percent of the total United States revenue of the violator for the fiscal year preceding the issuance of such fine. (3)

Serious or repeat violations

In the case of a serious or repeat violation, an operator or trader shall be prohibited from importing into the United States any good for a period of not more than 12 months. (4)

Determining serious violation

In determining what constitutes a serious violation under paragraph (3), the United States Trade Representative shall consider— (A)the nature, circumstances, extent, and gravity of the violation; (B)the degree of culpability; and (C)such other matters as the United States Trade Representative, in consultation with the Commissioner of Customs and Border Protection, determines necessary. (d)

Increased inspection rates

(1)

In general

Beginning on December 31, 2029, based on the country categorization list required under section 3(a)(1), the Commissioner of Customs and Border Protection shall implement the following increased inspection rates: (A)Of the goods originating from a country, or region thereof, categorized by the United States Trade Representative under section 3(a)(1) as a Level I risk, not less than 9 percent of such goods imported into the United States in a calendar year shall be inspected for deforestation goods. (B)Of the goods originating from a country, or region thereof, categorized by the United States Trade Representative under section 3(a)(1) as a Level II risk, not less than 3 percent of such goods imported into the United States in a calendar year shall be inspected for deforestation goods. (C)Of the goods originating from a country, or region thereof, categorized by the United States Trade Representative under section 3(a)(1) as a Level III risk, not less than 1 percent of such goods imported into the United States in a calendar year shall be inspected for deforestation goods. (2)

Rulemaking authority

The Commissioner of Customs and Border Protection may, in consultation with the Attorney General, Secretary of State, United States Trade Representative, Secretary of Commerce, and Administrator of the United States Agency for International Development, promulgate such rules and regulations as such Commissioner determines necessary to carry out paragraph (1). (e)

Interstate commerce prohibition

Not later than January 1, 2029, the Secretary of the Interior shall by regulation establish a plan to enforce the prohibition under section 1(a)(2).

Country categorization based on risk posed of importing deforestation goods

(a)

Country categorization

(1)

In general

The United States Trade Representative shall— (A)not later than December 1, 2029, and every other year thereafter, categorize every country under one of the three risk levels described under subsection (b), except as provided under paragraph (2), based on the risk that imports originating from such country are deforestation goods; and (B)not later than December 31, 2029, and every other year thereafter— (i)publish such categorization on the internet website of the United States Trade Representative; and (ii)formally notify each country, as described under subsection (c)(4), of the risk level of such country and of each regional categorization of such country under paragraph (2). (2)

Regional categorizations

A region within a country may be categorized by the United States Trade Representative under a different risk level under subsection (b) than the risk level such country is categorized under if sufficient information is available for the United States Trade Representative to determine that such region warrants a different categorization than the country such region is in. (3)

Interim categorization

For the period beginning on January 1, 2029, and ending on the date on which the United States Trade Representative completes the risk level categorization required under paragraph (1), each country, and each region thereof, shall be categorized under subsection (b)(2) as a Level II risk. (b)

Risk Levels

(1)

Level I

A country, or region thereof, shall be categorized as a Level I if the imports originating from such country, or region thereof, pose a high risk of being deforestation goods. (2)

Level II

A country, or region thereof, shall be categorized as a Level II if the imports originating from such country, or region thereof, pose a moderate risk of being deforestation goods. (3)

Level III

A country, or region thereof, shall be categorized as a Level III if the imports originating from such country, or region thereof, pose a low risk of being deforestation goods. (c)

Determining risk level

(1)

Assessment

The risk level categorization required under subsection (a)(1) shall be based on an objective and transparent assessment, determined by the United States Trade Representative, considering the latest scientific evidence and internationally recognized sources, and shall be primarily based on the following criteria: (A) The rate of deforestation and forest degradation since December 31, 2020, within the country, or region thereof, being categorized. (B) The rate at which the country, or region thereof, being categorized is expanding the use of agriculture land for covered products, covered commodities, and covered sources. (C) The production trends of the covered products, covered commodities, and covered sources within the country, or region thereof, being categorized. (2)

Additional considerations

The assessment required under paragraph (1) shall also consider the following: (A)Information related to the effective covering of emissions and removals from agriculture, forestry, and land use in the nationally determined contribution to the United Nations Framework Convention on Climate Change (adopted in Rio de Janeiro, Brazil, in June 1992) that may be submitted by the country, or region thereof, being categorized, regional authorities and operators in such country, or region thereof, nongovernmental organizations, indigenous peoples, local communities, civil society organizations and any other interested party the United States Trade Representative determines appropriate. (B)Agreements and other instruments between the country, or region thereof, being categorized and the United States that address deforestation, forest degradation, and compliance with section 1. (C)Whether the country, or region thereof, being categorized has national, regional, or local laws in place to combat deforestation and forest degradation, including whether such country, or region thereof, has— (i) implemented Article 5 the decision by the United Nations Framework Convention on Climate Change’s 21st Conference of Parities in Paris, France, adopted on December 12, 2015 (commonly referred to as the Paris Agreement); (ii)whether such country effectively enforces such laws; and (iii)whether the penalties imposed under such laws are of sufficient severity to deprive the penalized operator or trader of the benefits gained from engaging in deforestation or forest degradation. (D)Whether the country, or region thereof, being categorized has transparent data on deforestation and forest degradation and, where applicable, the existence of, compliance with, or effective enforcement of laws protecting human rights, the rights of indigenous peoples, and local communities. (E)Sanctions imposed by the Security Council of the United Nations or the United States on the import or export of deforestation goods. (F)Risk classification determined by the European Union under the European Union Deforestation Regulation. (3)

Engagement

The United States Trade Representative shall engage with each country, or region thereof, that is categorized, at risk of being categorized as a Level I risk, with the objective of reducing the level of risk of such country or region thereof. (4)

Notification

Upon finalizing the second risk-level categorization required under subsection (a)(1), and each risk-level categorization thereafter, the United States Trade Representative shall— (A)formally notify each country of a change from the most recently published risk-level categorization under subsection (a)(2) in the risk-level of such country or region thereof; (B)provide not longer than 6 months for such country to respond; and (C)include in such notification the following: (i)Each reason for the intention to change the risk level of the country or region thereof. (ii)In the case of an increase in risk level, an invitation to respond in writing to provide information on measures taken by such country to remedy the situation. (iii)The consequences such country will face because of a change in the risk level of such country or region thereof. (d)

Duty To update

The United States Trade Representative shall update the risk-level categorization required under subsection (a)(1) earlier than required under such subsection if any new evidence is received that the United States Trade Representative determines affects the risk-level categorization of a country or region thereof. (e)

Rulemaking authority

The United States Trade Representative may, in consultation with the Attorney General, Secretary of State, Commissioner of Customs and Border Protection, Secretary of Commerce, and Administrator of the United States Agency for International Development, promulgate such rules and regulations as such representative determines necessary to carry out this paragraph.

International assistance

(a)

Assistance to Level I countries

The Secretary of State shall provide preference to countries categorized under section 1(d)(2)(A) as a Level I risk when providing financial assistance related to deforestation and forest-related degradation. (b)

Revenue from penalties

With respect to all amounts collected in the form of civil penalties pursuant to section 1, and notwithstanding any other provision of law, the Secretary of the Treasury shall use an amount equal to half of the total amount of penalties collected in the preceding fiscal year to provide assistance to under developed countries with respect to deforestation and forest-degradation management.

Definitions

In this Act: (1)

Agriculture use

The term agriculture use means the use of land for the purpose of— (A)agriculture, including agricultural plantations and set-aside agricultural areas; or (B)rearing livestock. (2)

Covered commodity

The term covered commodity means each of the following: (A)Cattle. (B)Cocoa. (C)Palm oil. (D)Rubber. (E)Soy. (F)Wood. (3)

Covered product

The term covered product means any item that has been fed with, made with, contains, or was otherwise produced with a covered commodity. (4)

Covered source

The term covered source means any precursor to a covered commodity that is used to produce such commodity. (5)

Deforestation

The term deforestation means the loss of a forest resulting from the whole or partial conversion of such forest to— (A)agricultural use or another non forest land use; or (B)a tree plantation. (6)

Deforestation good

The term deforestation good means each of the following, only if produced, sourced, made, or otherwise derived from land, on or after December 31, 2020, that is subject to deforestation or forest degredation: (A)A covered product. (B)A covered commodity. (C)A covered source. (7)

Forest

The term forest means land spanning more than 0.5 hectares with trees higher than 5 meters and a canopy of more than 10 percent, or trees able to reach those thresholds in situ, excluding land that is predominately under agricultural or urban land use. (8)

Forest degradation

The term forest degradation— (A)means human-driven structural changes to forest cover that result in a change in species composition, structure, or function of the forest, which can be indicated by factors such as— (i)impacts to carbon storage and other ecosystem services; (ii)native species abundance and composition; and (iii)tree age class distribution; and (B)includes the conversion of— (i)primary forests, naturally regenerating forests, or old growth forests into plantation forests or into other wooded land; and (ii)primary forests or old growth forests into temporarily unstocked forests due to clearcutting or other harvesting. (9)

Operator

The term operator means any person who, in the course of commercial activity— (A)places relevant products into the interstate commerce of the United States; or (B)imports relevant products into the United States. (10)

Trader

The term trader means any person in the supply chain other than the operator who, in the course of a commercial activity, makes a product available to be imported into the United States.