September 2, 2008

Mitsubishi Corp. has been notified by Japan's tax authorities of its failure to pay JPY 4.2 billion (US$38.75 million ) in tariffs on pork imported from Denmark.

The Tokyo Regional Tax Bureau has imposed about 4.5 billion yen (US$41.5 million) in back taxes including penalties on the Japanese trader, for violation of Japan's differential tariff system.

The differential tariff system required Japanese pork importers to pay tariffs equivalent to the price difference when their pork is imported at lower prices than the government-set price.

In 2005, Mitsubishi bought Danish frozen pork at low prices from Foodane Japan Ltd., a unit of a Danish meat importer, via another firm.

Foodane Japan was made to declare it had imported pork at around the government-set standard price.

The tax bureau has found Mitsubishi and Foodane Japan predetermined their trade price, leading the authorities to conclude that Mitsubishi was the actual importer and that the major trader failed to declare tariff payments, according to the sources.

Mitsubishi said the company has been notified of an administrative penalty for its pork transactions and will decide on its response.