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Friday, Dec. 23, 2005

Itoham gets 30 million yen fine

Court triples meat processor's tariff evasion penalty

The Tokyo District Court ordered major meat processor Itoham Foods Inc. on Thursday to pay 30 million yen over its involvement in a meat importer's evasion of customs duties on imported pork, imposing a fine three times the amount that prosecutors had demanded.

Presiding Judge Yoshinobu Iida criticized Itoham for gaining huge profits by dodging tax on pork and said the company bears a heavy responsibility. Itoham had been charged with violating the Customs Tariff Law.

Iida also said it is hard to accept the company's argument that its top management was not involved in the tariff evasion, given the scale of tax evaded.

"Even if (the top management) were not involved, its presidents and others should be seriously blamed for failing to oversee" the activities of the employees, Iida said.

A lawyer for Itoham said it is surprising that the company received a heavier punishment than the prosecutors had demanded, adding that the firm will decide whether to appeal after thoroughly examining the ruling.

Itoham President Masami Ito said the company takes the ruling seriously and will boost compliance with the law to regain public confidence.

According to the court, Itoham, based in Nishinomiya, Hyogo Prefecture, bought about 3,000 tons of imported pork from Seiko, a meat importer also based in the city, between 2002 and 2004, knowing that proper tariffs had not been paid.

The amount of customs duties evaded on the pork that Itoham bought from Seiko totaled about 670 million yen.

In closing arguments in the trial in November, the prosecutors said the charges filed against Itoham covered only part of its wrongdoing, alleging the company had engaged in the evasion of tariffs on imported pork since around 1998.

Itoham had argued that officials in charge were responsible and that the company was not systematically involved in the tariff evasion.

The company had also argued that the existing pork tariff adjustment system does not fit the current business environment.

The judge, however, dismissed the argument, saying Itoham is not qualified to discuss the appropriateness of the system, given that the company gained profits by allowing wrongdoing by import brokers.

The pork tariff adjustment system was introduced in 1971 to protect domestic producers from lower-priced imports.

The government collects from importers any difference between imported pork prices and the standard pork price it sets, so that lower-priced imports do not put downward pressure on domestic prices.



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