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A report from the news agency Reuters revealed this Tuesday the scheme with which a local company managed to export to Canada a total of 12 million dollars in Chinese raspberries under the “Chilean and organic” product label between 2014 and 2016.
The article, titled “How a Chilean raspberry scam bypassed controls from China to Canada,” exposed the ease with which potentially dangerous and mislabeled products can be bypassed by health agencies and customs.
The investigation also revealed the concern that this irregularity generated in union leaders, but at the same time the inaction of the Chilean authorities.
For this case, in August 2019, the Chilean Justice sentenced the owner of Berries, César Ramírez. The false export operation of the company based in Santiago Centro It included the certificate of origin and the adulterated organic product.
Reuters examined thousands of pages of legal filings, investigative documents, and business records obtained through access to information requests in Chile and Canada.
“Achieving the fraud was relatively simple”the agency stated.
The Canada-Chile trade pact, in force since 1997, allows exporters to self-certify the origin of their products. The deal allowed mislabeled berries to enter Canada duty-free, evading a 6 percent tax applied to the same fruit imported from China, the report said.
The scheme: How did the fruits get to Canada?
According to research by Reuters, a large part of the Chinese raspberries exported by Frutti di Bosco were supplied by Harbin Gaotai Food Co., Ltd., which is headquartered in Binzhou City, Heilongjiang Province of China.
The frozen fruits were sent to Chile through an intermediary, Directus South East Asia Ltd, based in New Zealand.
After crossing the Pacific Ocean, the raspberries were brought by Frutti di Bosco by truck to the Fruticola Olmué packing plant, based in Chillán, where the “Chilean and organic” product labels were placed.
Finally, they were sent to Canada, where he bought them Alaska Foods, Inc., based in Montreal, one of the largest suppliers of frozen fruits in the North American country.
The Canadian company, which is insolvent and entered a receivership last September, denied any wrongdoing. However, César Ramírez told the Chilean Customs investigators that Alasko ordered the repackaging of the Chinese berries because “it was cheaper to do it in Chile and then export to Canada, thus using Chile-Canada FTA”.
Although Canada was by far the main destination, Frutti di Bosco also shipped to United States, Kuwait, the Netherlands and the United Arab Emirates.
How was the fraud discovered?
Everything was discovered in 2016, after a complaint in Customs by the management of Fruticola Olmué, which a year before had been bought by Juan Sutil, current president of the Confederation of Production and Commerce (CPC).
An internal audit by Sutil’s team found that the plant had repackaged the imported fruit in plastic bags labeled Chilean organic, a practice that started under the company’s previous owners in 2014 and was still going on when the new management discovered it, according to Customs investigation documents.
In the first seven months of 2016 alone, Frutícola Olmué appeared to have packed at least 400 tons of mislabeled fruit destined for Canada, enough to fill 25 shipping containers, according to your letter to Customs.
The bottling plant cut ties with Frutti di Bosco on October 24, 2016, the same day you alerted Customs, according to a separate letter he sent to Frutti di Bosco and was seen by Reuters.
Frutícola Olmué told reporters that no longer does business with Ramírez, the Canadian frozen fruit firm Alasko or Rebolledo, the fruit broker.
When searching Frutti di Bosco’s books, customs inspectors found that between 2014 and 2016 the company had exported more than 3,600 tons of fruits and vegetables.
Alleged silence of the Chilean authorities
“This situation could generate serious problems for the food industry of our country”, alerted Ronald bown, director of the Chilean Association of Fruit Exporters, in a letter to Customs on November 15, 2016, asking the agency to investigate the complaints, along with warning of the “closing of markets” to Chilean fruit.
“However, Chile did not notify Canada that something was wrong, according to Canadian officials. An alert did not materialize even after Ramírez, the owner of Frutti di Bosco, alleged that he had colluded with the buyer of the fruit, Montreal-based Alasko Foods Inc, to ship the illicit products to Canada, according to records from the Chilean investigation “, stated Reuters.
A spokeswoman for the Canadian Executive told Reuters that your country’s Ministry of Foreign Affairs, the Canadian Food Inspection Agency (CFIA), and the Canadian Border Services Agency They had no records of the case or communication in this regard from the Chilean Government.
For Hugo Baierlein, former director of foreign trade at the Sociedad de Fomento Fabril (Sofofa), the alleged lack of communication would be highly irregular and it would have been standard practice for Chilean officials to communicate in such circumstances.
Consulted by Reuters, neither the Chilean Foreign Ministry nor Customs clarified whether they had contacted Canada. However, the latter agency added that if those communications had taken place, the service uses that information in a confidential manner.
Just now the Canada’s CFIA said it is investigating the matter, after what journalists they contacted the authorities of that country for this story.
In 2019, after a simplified trial carried out in the Talcahuano Guarantee Court, the local Customs and the Prosecutor’s Office managed to convict the legal representative of the exporting company to two sentences of 61 days of minor imprisonment in its minimum degree.
In addition, two penalties of suspension from office or public office during the time of the conviction and the payment of two fines to the National Customs Service for 2.5 million pesos each.
In the case of the prison, the conditional remission was determined, so the convicted person must appear at the Santiago Social Reintegration Center for one year.
