The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has identified individuals, companies and vessels in the People’s Republic of China (PRC) for sanctions, due to human rights abuses and IUU fishing activities.
Li Zhenyu and Xinrong Zhuo, and the networks of entities they control, including Dalian Ocean Fishing Co and Pingtan Marine Enterprise, along with eight other affiliated entities are listed, as well as 157 PRC-flagged fishing vessels in which these entities have an interest.
These actions are taken pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world.
‘Treasury condemns the practices of those sanctioned today, which often involve the abuse of human rights, undermine fundamental labour and environmental standards, and harm the economic prospects of local populations in the Indo-Pacific,’ said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson.
‘These designations demonstrate how seriously we take the problem of illicit fishing and our commitment to holding the perpetrators of serious human rights abuses to account.’
Reviewing options
Pingtan Marine Enterprise (PME) has responded to the announcement, stating that ‘it conducts marine fishing operations in international waters with owned or licensed vessels, and has endeavoured to ensure that its fishing methods are in compliance with international standards and the laws and regulations of the operating waters.’
‘The company is thoroughly assessing the possible impact of this incident on the company’s business and prospects. The company intends to take appropriate measures to protect the interests of the company and its shareholders, and is currently reviewing its options to seek removal from the SDN List,’ a PME representative stated.
This is the first time Treasury has designated an entity listed on the NASDAQ stock exchange.
According to an OFAC statement, IUU fishing is associated with distant water fishing (DWF) – and DWF fleets have a reputation for rampant abuse of crew members.
These designations are the latest US government actions in an ongoing effort to deter IUU fishing and associated human rights abuses in the international fishing industry.
Individuals identified
OFAC has designated Li Zhenyu, chairman of Dalian Ocean Fishing Co, as ‘being a foreign person who is a leader or official of an entity, including any government entity, that has engaged in, or whose members have engaged in serious human rights abuse relating to the leader’s or official’s tenure.’
OFAC identified 32 vessels in which DOF has an interest and are therefore blocked property.
Also identified by OFAC is the Cayman Islands-registered Pingtan Marine Enterprise, Ltd (PME), which operates approximately a hundred fishing and reefer vessels via subsidiaries and an affiliated company.
In 2021, Pingtan Fishing received a $19 million subsidy from the PRC government as an incentive to develop its DWF industry.
‘Its vessels have been involved in serious human rights abuse and implicated in IUU fishing and other illegal activity in Indonesia, East Timor, and Ecuador. This includes the 2017 seizure of a Honglong-owned vessel and the arrest and imprisonment of the vessel’s crew after the Ecuadorian Navy found it had illegally transshipped more than 6600 shark carcasses, including from endangered species, through the waters of the protected Galapagos Marine Reserve,’ OFAC states.
‘In 2016, an Indonesian court ordered a moratorium on PME’s fishing activities and the impoundment of its affiliate vessels in Indonesia following allegations against an affiliated company that included human rights abuse.’
OFAC has designated PME’s founder, chairman, and CEO, Xinrong Zhuo (Zhuo) as ‘being a foreign person who is a leader or official of an entity, including any government entity, that has engaged in, or whose members have engaged in serious human rights abuse relating to the leader’s or official’s tenure.’
A long list of companies based in China and other countries is further listed, including Honglong, owned by Zhuo’s family, which has provided PME with millions of dollars’ worth of fuel and supplies for their vessels.
‘PME and Honglong have used each other’s vessels to collateralise loans worth hundreds of millions of dollars, and PME claims exclusive operating rights to 20 of Honglong’s vessels,’ OFAC states.
Under the OFAC actions, all property and interests in property of these persons in the United States or in the possession or control of US persons are blocked and must be reported to OFAC.
