Western Sahara imports behind business scandal

The company of the most important person in Norwegian business life, the President of the Confederation of Norwegian Enterprise, is under investigation by Norwegian authorities. The reason is a failure to pay import tens of millions of euros on duties upon importing fish oil from occupied Western Sahara.

Published 12 May 2010

The article below was published on the homepages of Norwegian state TV, NRK, 21 April 2010

The story released a media storm around the affair, and has since been followed by all Norwegian national newspapers, and national TV stations. It has also been known that the amount that the firm failed to pay in customs might arise up to 100 million euros. 

To follow the minute-to-minute news picture on the issue of customs irregularities in the Western Sahara imports (in Norwegian newspapers), please consult this search engine .

Industry Head Breaks Customs Regulations
By Kristian Aanensen, Vilde Helljesen and Runar Henriksen Jørstad
21 April 2010
Translation by Western Sahara Resource Watch Source: 

One of Confederation of Norwegian Enterprise (NHO) President Paul-Chr. Rieber's companies has for several years broken the customs regulations and may have failed to pay several hundred million Norwegian kroner in customs duty. 

Merely last year the company has, according to calculations made by the Customs service, not paid duty on at least 60 million kroner [7,6 million euros] in connection with the import of fish oil.

Has Started Investigation
The Norwegian Directorate of Customs and Excise has, after the Norwegian Broadcasting System (NRK) called its attention to the case, started an investigation of GC Rieber Oils, which it believes has broken Norwegian customs legislation.

“Rieber Oils will now receive a demand for retroactive payment of customs, and we shall consider whether we will petition for police prosecution of the case or make a post-clearance assessment of surtax,” Anita Graff, Assistant Director of the Directorate of Customs and Excise, told NRK.

The sentencing framework for violations of section 16.7 of the penal code, which may be relevant in this case, is fines or imprisonment for up to 2 years, but one may be imprisoned for up to 6 years for intentional or grossly negligent violations.

Incorrectly Declared
Last year GC Rieber Oils imported large amounts of fish oil from Morocco and Western Sahara. This import is contrary to the guidelines of the Ministry of Foreign Affairs, causing their largest customer, the partly governmental fish feed producer EWOS, not to wish to continue the collaboration with the company.

A survey that Friends of the Earth Norway has obtained for NRK shows that the oil was declared in city of Kristiansund as “not animal feed” and sent on to EWOS's plants in Gunhildsvåg and Halsa. 

By using this customs code Rieber Oils thus avoided paying 3.75 kroner [50 eurocents]per kg oil, which is the duty rate for fish oil that is to be used as animal feed. 

“If it is the case that these goods have been used for something other than what has been declared, the Customs shall make a claim against the company and consider whether to petition for police prosecution,” Graff stated.

75 million kroner [9.5 mill euros]
Last year Rieber Oils imported on the short side of 20,000 tonnes of fish oil from Morocco and Western Sahara, and EWOS bought almost the same amount from Rieber Oils. In 2009, according to Statistics Norway, a total of 20,287 tonnes of fish oil was imported from Morocco.

The problem for Rieber Oils is that since 2001 not a drop of fish oil from Morocco and Western Sahara has been declared as fish feed in Norway. And its biggest customer, EWOS, is Norway’s second largest producer of fish feed for the salmon-farming industry.

Consequently, Rieber Oils may have failed to pay customs duty for 75 million kroner [9,5 mill euros] merely last year. If the company has sold fish oil from Morocco and Western Sahara during the past 5-6 years, as EWOS claims in a press release, the NHO head's company may have avoided a customs duty of more than 250 million kroner [31,9 mill euros] during that period.

Not Familiar with the Regulations
"As chairman of the board, I must admit that I was not familiar with this, and the organisation has obviously not been familiar enough with this either. There has been an unfortunate slip-up in this case," NHO president, Paul-Chr. Rieber, told NRK. 

Fish oil that is used in the production of fish feed may be exempted from import customs, and Rieber Oils could have applied for exemption for this import, but it did not do so.

“We have not received any application from Rieber Oils for customs exemption for fish oil during the past 10 years,” Harald Moksnes Weie, section head of the Norwegian Agricultural Authority, told NRK. 

Paul-Chr. Rieber, on the other hand, is of the opinion that there is a general customs exemption for import of fish oil for use in fish feed production. But the Norwegian Agricultural Authority clarifies for NRK that this presupposes that one applies in advance.

After NRK's enquiry, the company has now applied for customs exemption with retroactive effect as well.

“We have sent a letter to the Agricultural Authority, requesting exemption,” Rieber said.

“It does not follow automatically that one receives exemption with retroactive effect,” Weie clarified, and further emphasised that the companies themselves are responsible for following the regulations.

“If the company does not follow the regulations, they must take the consequences themselves. This may entail that they will not receive the customs reduction they might have received if they had applied for it,” Weie stated, and emphasised that lack of knowledge is not sufficient grounds.

“Documentary proof is required to receive exemption with retroactive effect, and not knowing the regulations does not constitute sufficient reason,” Weie emphasised.

NHO Head
On a daily basis Paul-Chr. Rieber is Group CEO of CG Rieber AS. In addition, he is chairman of the board for the wholly owned subsidiary that imports the fish oil, GC Rieber Oils. 

Paul-Chr. Rieber is also the elected president and chairman of NHO's board - the highest position that may be held within NHO' member-governed organs.

“This kind of focus is unfortunate both for the company and for NHO,” Rieber stated.

His company, GC Rieber Oils, is responsible for almost all import of fish oil from Morocco and Western Sahara to Norway, with regard to both money and weight, and for a long time claimed that it was used for the production of omega-3 capsules. 

Omega-3 Production
In connection with a documentary on Swedish TV the company claimed that the fish is ground into oil and sent by tanker to Kristiansund. There it is supposed to have been bought by GC Rieber Oils and refined into a quality that may be used in health cost products. It now appears, however, that the oil to a great extent is bought by EWOS from Rieber Oils and used for animal feed.

Arne Alnæs, CEO of GC Rieber Oils, wrote, in a document to which NRK has had access, that the oil from Western Sahara is of such a poor quality that it can not be used in the production of omega-3 products. Furthermore, the company delivers the fish oil to a Norwegian customer, which, from what NRK understands, is EWOS, Norway's second largest producer of fish feed. 

The president of the Confederation of Norwegian Enterprise, Paul-Chr. Rieber, stated that he is not familiar with the customs regulations for the import of fish oil.

Anita Graff, Assistant Director of the Directorate of Customs and Excise, is now starting an investigation of Rieber Oils.

Exemption does not follow automatically, according to Harald Moksnes Weie of the Norwegian Agricultural Authority. 

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