Washington DC | New York | Denver | Seattle

Seafood Fraud

Lisa Weddig National Fisheries Institute

April 9, 2014

Topics for discussion

• Intro to National Fisheries Institute and Better Seafood Board

• Fish Fraud – what is it? • Why Fight Fraud • Laws on the Books • Enforcement is Key • Broken Window Theory

Who is NFI?

• Nation’s leading advocacy organization for the seafood industry.

• NFI’s members represent every element of the industry • fishing vessels • processors • importers • restaurant and retail chains

• NFI and members support and promote sound public policy based on science.

Better Seafood Board

• A corporate entity separate from National Fisheries Institute

• Sole focus is seafood fraud • Separate Board of Managers • Link between industry and

government or customer • encourage enforcement • awareness of U.S. laws and

regulations • awareness of problem

Fish Fraud

• Species substitution • Adding excessive glaze to increase

weight • Short-weighting • Over-treating to increase water

content • Trans-shipping to avoid customs

duties

Fish Fraud - Not a Secret

• Species substitution • Adding excessive glaze to increase

weight • Short-weighting • Over-treating to increase water

content • Trans-shipping to avoid customs

duties

Common Offers

Black Tiger Shrimp 6x4 lbs, Block Frozen 100% NW/NC 90% NW/NC 80% NW/NC

•

1992

Tastier Names Trouble for Seafood Stocks

NY Sushi Sleuths Uncover Fishy Tricks

Why Fight Fraud?

• erodes consumer trust in the product category

• creates unfair economic advantages for companies willing to perform illegal acts

• promotes an environment of “bending the rules” to succeed

Laws Enacted By Congress

• Fair Packaging and Labeling Act • Federal Food, Drug, and Cosmetic

Act

Fair Packaging and Labeling Act

Labels must contain accurate

information to identify the product, manufacturer, packer or distributor and the net quantity of contents, in terms of weight or mass, measure, or numerical count.

Federal Food, Drug, and Cosmetic Act

Three Key Sections • SEC. 402. Adulterated food • SEC. 403. Misbranded food • SEC. 801. Imports and exports

SEC. 402 Adulterated Food

A food shall be deemed to be adulterated— (b) Absence, substitution, or addition of

constituents. (1) If any valuable constituent has been in whole

or in part omitted or abstracted therefrom; or (2) if any substance has been substituted wholly

or in part therefore; or (4) if any substance has been added thereto or

mixed or packed therewith so as to increase its bulk or weight, … or make it appear better or of greater value than it is.

SEC 403. Misbranded Food

A food shall be deemed to be misbranded— (a) … If (1) its labeling is false or misleading in any

particular, … (b) … If it is offered for sale under the name of another

food. (d) … If its container is so made, formed, or filled as to

be misleading. (e) … If in package form unless it bears a label

containing (1) the name and place of business of the manufacturer, packer, or distributor; and (2) an accurate statement of the quantity of the contents in terms of weight, measure, or numerical count, except that … reasonable variations shall be permitted, …

(w) Major food allergen labeling requirements. (states specific species of fish or crustacean shellfish).

SEC. 801. Imports and exports

(a)Imports…

If it appears from the examination of such samples or otherwise that … such article is adulterated, misbranded, … then such article shall be refused admission

Lacey Act

Unlawful, in part, for a person to make or submit any false record, account or label for, or any false identification of, any fish or wildlife which has been, or is intended to be, imported, exported, transported, sold, purchased, or received from any foreign country or transported in interstate or foreign commerce. (16 USC §§ 3372(d)(1) and (d)(2))

FDA Food Code

3-601.12 Honestly Presented (A) Food shall be offered for human

consumption in a way that does not mislead or misinform the consumer

Florida State Regulations

• An operator may not knowingly and willfully misrepresent the identity of any food or food product to any of the patrons of such establishment. The identity of food or a food product is misrepresented if: • The description of the food or food product is false or

misleading in any particular; • The food or food product is served, sold, or distributed

under the name of another food or food product; or, • The food or food product purports to be or is represented

as a food or food product that does not conform to a definition of identify and standard of quality if such definition of identity and standard of quality has been established by custom and usage.

Response from an Exporter

• Have your government write a law making this illegal.

Importance of Enforcement

• Industry and government both have a role in ensuring consumers are confident in seafood purchases. • The government provides and enforces

guidelines to ensure economic integrity • Industry follows the guidelines.

Applaud Enforcement

Applaud Enforcement

National Investigation Exposes Fraud in Frozen Seafood Labeling

Washington DC | New York | Denver | Seattle

The Broken Window Theory

Alleviating Larger Problems by Sweating the Small Stuff

Background

• Introduced by criminologists James Wilson and George Kelling in 1982 issue of The Atlantic Monthly:

“Consider a building with a few broken

windows. If the windows are not repaired, the tendency is for vandals to break a few more windows. Eventually, they may even break into the building, and if it's unoccupied, perhaps become

squatters or light fires inside.”

• Theory: Serious crime flourishes in areas in which disorderly behavior goes unchecked

• Allowing minor crimes, like vandalism, to go unpunished creates norm for unacceptable behavior • Baseline for more serious crime • Removes informal controls that normally regulate

crime • Makes it more difficult for police to do their job

• But if broken windows, or smaller issues, are addressed seriously when they are manageable, officials can maintain the informal community expectations that control more serious crime

Examples

• New York City: • 1984-1990: NYC Transit Authority

begins patrols of subways to combat graffiti and fare dodging

• 1993: Mayor Giuliani adopts “zero tolerance” strategy for entire city: NYPD targets all types of petty crime

• 2001: Study finds that rates of petty and serious crime fell significantly and continued to fall in years after implementation

Washington DC | New York | Denver | Seattle

The Broken Window Theory

Can it apply to food fraud?

Fraud • Supplier 1 selling 10

pound boxes of frozen fish fillets that tested at less than 90% net weight

• Supplier 2 selling 10 pound boxes of frozen fish fillets that tested at less than 95% net weight

Food Safety • Supplier 1 had

entries refused for being “filthy”

• Supplier 2 had entries refused for being “filthy” and no ingredient statement

Fraud • Offers to sell product

at less than 100% net weight

Food Safety • FDA Warning Letter – • Significant violations of

the seafood HACCP regulation (21 CFR Part 123) • failed to have or implement

affirmative steps • failed to have product

specifications that are designed to ensure product imported by your firm is not injurious to health

• On Import Alert 16-119 • Detention Without Physical

Examination Of Fish And Fishery Products For Importer And Foreign Processor (Manuf) Combinations

Tilapia 350/550

90% net wt

40lbs $0.92

Tilapia 550/750

90% net wt

40lbs $0.98

Fraud • imported Pangasius

fillet as sole avoiding duties

• purchasing and creating false labels describing imported Pangasius fillet as grouper;

• falsely labeling and selling Lake Victoria perch as grouper and/or snapper

Food Safety • Changing harvest

dates on oyster tags indicating a more recent harvest date

Fraud • Supplier on Import

Alert 22-04 – Detention without Physical Examination of Juices and Juice Concentrates that are Adulterated or Misbranded Due to Substitution

Food Safety • Supplier of

pomegranate seeds linked to hepatitis outbreak

Old FDA

• “There is no place in the seafood industry for those who substitute a less expensive or less desirable species of fish for one that consumers value more. We will seek out those who perpetrate fraud – and we will bring them to justice.”

Old FDA

• “There is no place in the seafood industry for those who substitute a less expensive or less desirable species of fish for one that consumers value more. We will seek out those who perpetrate fraud – and we will bring them to justice.”

FDA Commissioner David A Kessler, April 1991

Washington DC | New York | Denver | Seattle

Thank You

Lisa Weddig

www.betterseafoodboard.com