Young Living fined $760,000 for trafficking of rosewood & spikenard oil

Following an investigation into the illegal trafficking of essential oils, earlier today the FTC announced it was fining Young Living $500,000.

The company is also required to pay $135,000 in restitution and $125,000 as a “community service payment”.

The fines stem from a joint investigation by the U.S. Department of Agriculture, Office of the Inspector General, with assistance of the U.S. Fish and Wildlife Service and the Department of Homeland Security.

The investigation lead to a criminal case brought forward by the DOJ, which primarily focused on Young Living’s business activities between June 2010 and October 2014.

During this time the DOJ allege

several (Young Living) employees and contractors harvested, transported, and distilled rosewood (Aniba roseaodora or Brazilian rosewood) in Peru and imported some of the resulting oil into the United States, through Ecuador.

The harvest and transport of timber in Peru is prohibited without prior authorization, which neither Young Living or its employees and contractors had.

What’s even worse is the timber Young Living was illegally trafficking out of Peru was rosewood, a protected species under the Convention on International Trade in Endangered Species (CITES).

Between 2010 and 2014, a few Company employees harvested, transported, and possessed a total of approximately 86 tons of rosewood, all of which was harvested in violation of Peruvian law.

The rosewood was intended for distillation and export to the United States and some had already been illegally brought over.

The investigation also revealed that between November 2014 and January 2016, the Company purchased over 1,100 kilograms of rosewood oil from a supplier/importer in the United States without conducting sufficient due diligence to verify lawful sourcing of that oil.

To their credit, Young Living appear to have discovered the violations themselves.

The Company hired outside counsel to conduct an internal investigation into the violations due to the illegal harvesting and shipping of plants that occurred in Peru and Ecuador.

On July 20, 2015, once the internal investigation was complete, the Company made an initial written voluntary disclosure to the Government of various facts indicating their potentially illegal violations.

This internal investigation uncovered additional trafficking of protected spikenard oil, exported from Nepal to the UK without an appropriate CITES permit.

On March 23, 2016, a Company employee filed an application for a CITES permit for this shipment after the fact, and without providing the required copy of the permit authorizing its original export from the United Kingdom.

Not sure what the point of that was, other than an attempt to cover the company’s tracks. The spikenard oil shipment was exported four months earlier.

I’m not too familiar with environmental crimes, but the DOJ’s $760,000 fine seems a bit weak.

The Government calculates the fair market retail value of the plant products involved in the violations and relevant conduct, including but not limited to product equaling approximately 1,899.75 liters of rosewood oil, to be more than $3.5 million but not more than $9 million.

And that’s on top of whatever the spikenard oil was worth.

The DOJ sentencing places Young Living on probation for five years and also requires the company to “implement a comprehensive compliance plan”.

This seems to have begun in late August with Young Living announcing it was working with SCS Global Services.

“Stewardship of the earth goes hand in hand with responsible business practices.

That’s why we’re working collaboratively with SCS—a leading third-party certifier and standards developer—to ensure that the environmental standards of our Seed to Seal program are the best they can be,” said Lauren Walker, Young Living Chief Supply Officer.

Hopefully this ensures Young Living won’t be illegally plundering the environment going forward.

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