Zespri pleads not guilty

A China-based subsidiary company of New Zealand kiwifruit marketer Zespri pleaded not guilty to charges of criminal smuggling related to alleged under-declaration of customs duties by independent importers in a Shanghai court yesterday.

In a statement today the company said a judgment was expected from this trial in the next three months.

The company said a Zespri employee, who was not a New Zealand citizen, also pleaded not guilty yesterday to the same charges.

Zespri said it would continue to offer support to him and his family, and his government is offering consular assistance.

The trial follows on from a China Customs investigation which began in 2011.

Zespri’s former Shanghai-based independent importer, Liu Xiongjie, pleaded guilty to charges of criminal smuggling in May 2012.

In hearing his case, the court rejected his mitigating defence that he was not responsible for meeting customs obligations on the importation of New Zealand kiwifruit.

Liu is appealing the 13-year sentence he received.

He has repaid 37 million RMB (around $NZ7 million), which was the amount of the underpaid customs duties.

As a continuation of the China Customs investigation into the under-valuation of New Zealand kiwifruit imported into China, Zespri’s China-based subsidiary – Zespri Management Consulting Corporation (ZMCC) – was charged with Customs offences alleged to have occurred between 2008 and 2010.

Zespri said these allegations related largely to the invoicing practices and the manner in which the pro-forma invoice price was reached by the importers.

The legal obligation to meet all customs requirements sits with the importer.

Zespri said it has always acted at the direction of the importer and in good faith, believing its processes were in accordance with Chinese law and regulations.

There is no evidence that Zespri or New Zealand kiwifruit growers benefited from the customs under-declaration, the company said.

China is Zespri's third largest market with record sales of $110 million in 2011-2012. Sale volumes were 26 per cent up at 9.2 million on the previous export. 

Sales will be down in the 2012-2013 year due to a smaller crop in New Zealand. 

Zespri said it has cooperated with China Customs throughout its investigation, including providing key information and face-to-face meetings between senior executives and authorities.

China is a valuable market for New Zealand kiwifruit and Zespri remains committed to its China business. This case is not expected to impact on Zespri’s sales in China in the 2013 season.

The company said today it would not make any further comment until after the court has issued its judgment.

Waikato Times