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US Sanctions on Russia’s Seafood Have a Big Loophole: China Processors

April 15, 2022 — A U.S. ban on seafood imports from Russia over its invasion of Ukraine was supposed to sap billions of dollars from Vladimir Putin’s war machine.

But shortcomings in import regulations mean that Russian-caught pollock, salmon and crab are likely to enter the U.S. anyway, by way of the country vital to seafood supply chains across the world: China.

Like the U.S. seafood industry, Russian companies rely heavily on China to process their catch. Once there, the seafood can be re-exported to the U.S. as a “product of China” because country of origin labelling isn’t required.

The result is that nearly a third of the wild-caught fish imported from China is estimated to have been caught in Russian waters, according to an International Trade Commission study of 2019 data. For pollock and sockeye salmon, the rate is even higher — 50% to 75%.

“China doesn’t catch cod. They don’t catch pollock. But yet, they’re one of the largest exporters of these whitefish in the world,” said Sally Yozell, a former policy director at the National Oceanic and Atmospheric Administration who now is a senior fellow at the Stimson Center in Washington. “Having it labeled as a Chinese product is really not fair to the consumers and to restaurants.”

Read the full story at NBC New York

Russia ratifies Port State Measures Agreement

December 10, 2020 — Russia President Vladimir Putin signed into law the ratification of the  Port State Measures Agreement on 8 December, 2020, thus making Russia a party to the law-binding document intended to help combat illegal, unreported, and unregulated (IUU) catch. A few amendments to the national legislation will follow to bring Russia’s laws in line with the agreement.

Originally adopted by the Food and Agriculture Organization of the United Nations in 2009, the PSMA stipulates authorities at ports of entry for seafood can conduct dockside inspections, block entry to vessels known to be involved in IUU, and share information with other parties to the PSMA regarding vessels known or believed to contain IUU product.

Read the full story at Seafood Source

Russia Hopes to Compensate Unsuccessful Salmon Fishing Season by Increase of Pollock Catch This Year

October 27, 2020 — Russia hopes to compensate the unsuccessful salmon fishing season this year with the increase of production of ivasi sardine, mackerel and pollock, according to recent statements made by the head of the Russian Federal Agency for Fishery (Rosrybolovstvo), Ilya Shestakov, during his recent meeting with the Russian President Vladimir Putin.  

During the meeting, which was dedicated to the situation in the domestic fishing sector, Shestakov said despite the pandemic, the current situation in the industry remains stable.  

Read the full story at Seafood News

Russia considers allowing foreign investments in fisheries

September 24, 2019 — Russia’s government may consider dropping the restrictions imposed by federal law on fishing by non-Russian companies in the country’s waters.

Russia’s Federal Fisheries Agency Head Ilya Shestakov’s – at a discussion panel he was chairing titled “The capitalization of the fishery industry” at the third Global Fishery Forum in St. Petersburg, Russia – suggested potentially changing federal laws to allow foreign companies into Russia’s fishing industry. The comments came amid growing criticism by industry players over crab quota auctions introduced by the government and signed into law by President Vladimir Putin earlier this year.

Read the full story at Seafood Source

Russian Investors with No Crab History Closer to Grabbing Share of Lucrative Crab Quotas

August 29, 2018 — SEAFOOD NEWS — The Russian red king crab fishery is the most valuable crab fishery in the world, and has long attracted the attention of poachers, oligarchs, and the Russian government.

For years the government has waged a campaign against poaching, which was often undermined by bribery of border guards and local officials.  However, poaching is less of an issue now because, first, the Russians increased the quotas to allow more legal harvest, and second, the legal harvesters began pushing for enforcement as well, to protect their products from cheaper competition.

Russia has a ten year cycle for crab quotas, and another auction is coming up.

Ten years ago, to bid in the auction companies needed to demonstrate a history in the fishery.

Subsequently, the Russian government has targeted investment in domestic processing and ship building as a key national objective to be obtained through trading awards of fish quotas to companies who make investments.

The Russian Fishing Company, associated with Gleb Frank, a close advisor to Vladimir Putin, has taken advantage of this to raise funds for a number of Russian built pollock trawlers and domestic processing plants.

Other oligarchs have also come into the fishing business as fishing is one of the fastest growing Russian agricultural segments, and investments are not hindered by international sanctions.

Salmon and trout producer Russian Aquaculture is the largest player in the Russian fish business with a 22% market share and is growing fast. The partners of Russian oligarch Roman Abramovich acquired 25% in South Sakhalin fishing company Poronay, while Agama RT bought 49.99% in Russian Cod, controlled by a subsidiary of Russian Industrial Fish Company (RRPK) of Gleb Frank, the son-in-law of oligarch and Kremlin insider Gennady Timchenko.

Reportedly it was Gleb Frank’s RRPK which suggested to Vladimir Putin to redistribute crab quotas through auctions in autumn 2017, unnamed market participants told the Russian Vedomosti newspaper. RRPK has entered the market recently and spent a record-high RUB10bn on crab fishing quotas in May 2017.

The government could raise additional RUB 80bn-200bn from auctioning the quotas the state fishing agency Rosribolovstvo estimated, according to Tass.

Traditional participants in the Far East Crab industry fear getting cut back.  The governor of Primorsky region warned Putin that the local communities would suffer if this proposal is adopted. ‘Fishing Villages don’t have the money to go out and buy quota,” he said.

Further Far East companies have invested over $2 billion US in quotas from 2001 to 2017, and withdrawing quotas from these companies would lead to disruption of operations and investments by regional players.

The war over crab quotas has played out among different Russian Agencies, in particular with Rosribolovstvo the fisheries agency supporting quota auctions, and the FSB, the federal investigative service, attacking foreign ownership and trying to discredit or force sales from some previous quota holders.  The FSB has generally been thought to be attacking existing companies to force them into a situation where they can be bought by new Russian buyers.

It now appears that the government is going forward with awarding 50% of the quota in the upcoming crab auctions to “investors” without prior fishing history as a requirement.  This was announced officially as a government decree, according to the Vedomosti Daily.

This story originally appeared on Seafood News, it is republished here with permission.

 

How Trade and Sanctions Made This Russian Fisherman a Billionaire

January 24, 2017 — Peering into the mid-morning darkness from his sixth-floor office on Russia’s Kola Bay, Vitaly Orlov strains to see the new factory he’s just built across the water, his view obscured by a creeping cloud bank that shrouds the Arctic seascape in impenetrable gray.

The $30 million structure is the crown jewel of Orlov’s Murmansk-based Norebo Holding JSC. Set amid rows of aging tenements and a wooden church, it was built to service Norebo’s fleet of fish trawlers that together hauled in almost 11 percent of the 4.75 million metric tons (5.24 million U.S. tons) the Russian Federal Fisheries Agency says were caught by Russian fisherman last year.

“I’ve only ever been sure of one thing — that my life will always be tied to the north and the fishing industry,” Orlov, 51, polite and deliberate, pocket square tucked into a tailored suit, said in his first foreign media interview.

From that modest goal, Orlov has built a fortune that the Bloomberg Billionaires Index values at $1 billion, benefiting from the colliding forces of global trade and sanctions that today define Vladimir Putin’s Russia. While his business derives as much as 60 percent of its sales from outside the country, it’s also seen a surge in domestic consumption as sanctions limit food imports.

Arctic Calling

In the Nov. 8 interview, Orlov explained how the plant fulfills a lifelong aspiration to create a fully integrated global fishing operation. Imported Icelandic equipment will process 15,000 of the more than 500,000 metric tons of cod, haddock and other bottom-dwelling fish Norebo catches, packages and ships annually across the country’s 11 time zones and beyond.

Read the full story at Bloomberg News

Russia turns to fish industry in latest drive for growth

VLADIVOSTOK, Russia — September 3, 2015 — Russia needs to create its own Asia-Pacific hub to store, process and trade seafood and fish, Agriculture Minister Alexander Tkachev said on Thursday, the latest plan to increase self-reliance and boost growth.

Although already the world’s fifth-largest fish producer, Russia suffers from underdeveloped fishing ports and manufacturing infrastructure, poaching, and a lack of investment, relying heavily on processing in other countries.

President Vladimir Putin has said he wants the country to move towards greater self-reliance after the West hit Moscow with sanctions over the Ukraine crisis and Russia retaliated by banning most Western foods.

“Fish are our hard-currency export, our grain, oil and gas, our national heritage,” Tkachev told the Eastern Economic Forum in Vladivostok, on the Pacific coast.

Read the full story from Reuters

 

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