December 30, 2023

US closes sanctions loophole on Chinese processed Russian seafood

United States President Joe Biden signed an executive order to close a sanctions loophole that allowed the importation of significant quantities of Russian-caught pollock, cod, salmon, and crab processed in China, Anchorage Daily News reported.

This move is a respond to calls from North Pacific seafood industry officials and their congressional allies who argue that Chinese-processed Russian seafood has negatively impacted US markets, leading to lower prices for fishermen in Alaska.

The executive order is part of a broader effort by the Biden administration to strengthen the sanctions imposed in a March 2022 executive order following the Russian invasion of Ukraine. While the initial seafood sanction prohibited the direct import of Russian seafood to the US, it permitted these products to reach American consumers if processed in another country.

President Biden's recent action not only expands the US's ability to sanction financial institutions but also includes language allowing tougher sanctions on Russian seafood and diamonds, even if they are substantially transformed in another country. The US Treasury Department, in a companion document, released a determination specifying that the ban on imports now extends to Russian-caught pollock, cod, salmon, and crab, regardless of processing location, effective immediately.

US Treasury Secretary Janet Yellen emphasised that the US would employ new and powerful tools as Russia has sought to evade sanctions by redirecting certain trade and financial flows through third countries.

The North Pacific seafood industry, a key economic force in Alaska and Washington, has been advocating for an expansion of sanctions. Both states' congressional delegations intensified efforts to convince the Biden administration of the necessity of broader measures.

The expanded sanctions, challenging the longstanding consideration of seafood's origin based on processing location, are poised to disrupt American markets. Major US seafood companies, accustomed to relying on cost-competitive Russian products processed in China, particularly pollock blocks used in fish sticks, may face challenges with the new restrictions.

Pollock, the largest fishery by volume for both the US and Russia, plays a crucial role. In Alaska, where over 95% of this year's 1.39 million-metric-tonne catch was processed, the impact will be significant. In Russia, with a larger 2023 harvest, much of the pollock is sent to China for further processing before being exported to the US and Europe.

-      Anchorage Daily News