Company in N.S. fined $50K in American lobster mislabelling ruse
CBC
A Chinese-owned lobster company in Nova Scotia has been fined $50,000 for illegally shipping American lobsters primarily to China and claiming it came from Canada.
Atlantic ChiCan pleaded guilty Thursday in provincial court in Dartmouth, N.S., to two counts related to the mislabelling.
Between May and October 2019, the big holding facility on Cape Sable Island in southwest Nova Scotia imported 63,000 pounds of live lobster from the United States and exported it as product of Canada, according to an agreed statement of facts presented in court.
The lobster was sent from the Halifax Stanfield International Airport. At the time, the Trump administration and China were embroiled in a trade war, and Maine lobster paid a 49 per cent tariff entering China.
Federal Crown prosecutor Max Kruger said tariff avoidance was an outcome, but there was no proof that it was behind the scheme.
"In this case, a result of that would have been that the Chinese would have not applied customs tariffs to that shipment. We didn't have any evidence that that was the motivation behind ChiCan's actions," he said.
"The evidence that we did have, including statements given by plant staff, was they were trying to satisfy insatiable market demand from their Asian customers, in particular China, and that is why they were sourcing American lobster."
Whatever the motivation, Kruger said the deception undermined the integrity of Canadian customs and food traceability commitments.
"Our international trading partners rely on that reporting system. We share data with our partner agencies. They rely on that to determine what the country of origin is for the products being shipped," Kruger said.
Canadian food traceability and customs certificates are based on an "honour system" that allows the exporter to fill out country of origin in documents.
The Atlantic ChiCan ruse was detected by the Canadian Food Inspection Agency during a Sept. 24, 2019, inspection at Clark's Harbour, on Cape Sable Island.
The findings were passed on to the Canada Border Services Agency, which obtained a search warrant. A check of customs declarations showed Atlantic ChiCan exported lobster 286 times between June 1 and Sept. 30, 2019, always indicating Canada as the country of origin.
Atlantic ChiCan temporarily lost honour-system privileges, "resulting in significant costs accrued" to the company, according to the joint statement.
Atlantic ChiCan lawyer Victor Goldberg said the Chinese owners were unaware of what was going on.
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