CBP FINES SEAFOOD GIANT FOR JONES ACT VIOLATIONS
October 20, 2021
On September 2, 2021, U.S. Customs and Border Protection (“CBP”) announced its decision to impose a massive $300 million fine on U.S. seafood giant, American Seafoods, for violating the Merchant Marine Act of 1920, also known as the Jones Act, which generally requires that shipping between U.S. ports be conducted by U.S. flagged ships. The fine is one of the largest ever imposed by CBP for such a violation.
The Jones Act forbids foreign-flagged vessels from shipping between U.S. destinations unless an exception applies, such as in the case of shipments that “travel partially over certain Canadian rail lines and their own or other connecting water facilities.” In the case of American Seafoods, Pollock destined for the U.S. market was allegedly shipped from Alaska to New Brunswick, Canada, via the Panama Canal, onboard foreign-flagged ships. Additionally, while in Canada, the Pollock was loaded onto refrigerated trucks, then moved to flatbed rail cars, and then finally moved a short distance along a rail line all before being loaded back onto trucks at its original location before continuing its journey on to the U.S. Given this progression of events, CBP accused American Seafoods of attempting to “workaround” requirements imposed by the Act by travelling through Canada in order to gain the benefit of this particular exception.
As previously mentioned, the $300 million fine imposed by CBP is the largest on record, the largest fine previously imposed by CBP for a Jones Act violation before this was for $10 million in 2017.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com or 202-659-6622); Drew Derco (dderco@eckertseamans.com or 202-659-6665), or Andy Orr (aorr@eckertsemans.com or 202-659-6625).
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