American Seafoods resolves Jones act violations, avoids over USD 400 million in fines

American Seafoods subsidiaries Kloosterboer International Forwarding (KIF) and Alaska Reefer Management (ARM) have settled a dispute with U.S. officials, avoiding over USD 400 million (EUR 359 million) in fines.

The companies announced they reached a resolution with U.S. Customs and Border Protection (CBP) and the U.S. Department of Justice (DOJ) 19 July. Under the terms of the settlement, CBP will withdraw Notices of Penalty issued to the two companies – which carried nearly USD 400 (EUR 359 million) in fines –  in exchange for a payment of USD 9.5 million (EUR 8.5 million).

The saga between CBP, the DOJ, and the two American Seafoods subsidiaries began in 2021 when the CBP issued approximately USD 350 million (EUR 314 million) in fines related to the use of an intermodal facility in the Canadian province of New Brunswick used to transport Alaskan seafood to the U.S. East Coast. In its penalty notices, the CBP alleged that the transportation method constituted a “calculated and secret scheme” to escape restrictions of the Jones Act.

The Jones Act requires all seafood caught domestically in the U.S. be transported via vessels built in the U.S. with U.S. materials. The two companies, KIF and ARM, used foreign-flagged and -built ships to transport fish from Alaska to a railyard in Canada, where all cargo would then take a 100-foot roundtrip rail journey in a process known as the Bayside Program.

The original lawsuit by KIF and ARM alleged ... 

Photo courtesy of U.S. District Court for the District of Alaska