Four Japanese companies fishing walleye pollack in Russia’s exclusive economic zone paid a total of \500 million in cash to Russian border guards for three years through last year to buy their tacit permission for catches exceeding quotas, it has been learned.
Taxation authorities have imposed back taxes on the four companies for trying to conceal part of their incomes by disguising the backdoor payments as legitimate expenses, sources said.
The four companies said they had to pay the illicit money to Russian officials to be allowed to catch more than they are allowed because the fishing quotas decided through bilateral Japan-Russia fishery negotiations have decreased in recent years. This year’s Japan catch quota of walleye pollack from Russian waters is 10,952 tons.
Observers warned that revelation of apparent bribes paid to Russian officials might negatively impact Japan-Russia relations.
According to the sources, the Sapporo and Sendai regional taxation bureaus accused Wakkanai Kaiyo in Wakkanai, Hokkaido; Kanai Gyogyo in Kushiro, Hokkaido; Kaiyo Gyogyo in Hachinohe, Aomori Prefecture; and Sato Gyogyo in Shiogama, Miyagi Prefecture; of trying to conceal a portion of their incomes.
Penalty taxes, including heavy additional taxes, imposed on the companies totaled \150 million, though no heavy additional tax was imposed on Sato Gyogyo because it was in the red.
The four companies were quoted as telling the taxation authorities that they paid the cash to Russian border guards aboard their ships to have them overlook catches exceeding the official quotas. However, the taxation authorities considered the acts to be attempts by the companies to conceal part of their incomes because the firms disguised the use of the money during tax procedures by drawing up fictitious contract documents, the sources said.
The four companies operated deep-sea trawlers in the Bering Sea and other waters in the region to fish walleye pollack. One also operated other types of fishing boats in seas around the Russian-occupied northern territories. Russian border guards, dubbed “observers,” would board such Japanese ships to check adherence to fishing quotas.
Experts noted that bilateral fishery negotiations in recent years have resulted in reduced catch quotas in the seas concerned, because Tokyo has been extremely cautious not to negatively affect the northern territories issue.
Moreover, bribing foreign government officials might constitute a violation of the nation’s Unfair Competition Prevention Law, even if the money is paid abroad.
The president of Wakkanai Kaiyo told The Yomiuri Shimbun that the taxation authorities refused to accept his explanation of the issue, while Kanai Gyogyo’s president said he did not know anything. The head of Kaiyo Gyogyo declined comment to the Yomiuri and referred all questions on the issue to the taxation authorities, while Sato Gyogyo’s president said the taxation authorities told him about three years ago to pay the back taxes.
Meanwhile, a spokesperson for Russia’s Federal Security Service, which supervises the border patrol, told the Yomiuri that they understood the seriousness of the scandal. “We’ll have to contact prosecutors to launch [appropriate] investigations,” he added.