U.S. Treasury Blacklists NASDAQ-Listed Chinese Fishing Company
The U.S. Treasury has imposed sanctions on two Chinese fishing executives and 10 companies under their control, including NASDAQ-listed Pingtan Marine Enterprise. It is the first time that the Treasury has ever sanctioned a corporation listed on U.S. stock exchange.
The announcement, which was issued on UN Anti-Corruption Day, targeted the well-documented human rights abuses in China's distant-water fishery. Back in June, the Biden administration signaled its intention to go after human rights violations on the high seas with a memorandum on IUU fishing. The Treasury leveraged its broad human rights enforcement authority under the Magnitsky Act to implement the White House's goals.
The sanctions cover two fisheries executives, Li Zhenyu and Xinrong Zhuo, along with nearly a dozen fishing companies under their control.
Li controls Dalian Ocean Fishing, the operator of 32 China-based fishing vessels. The officers aboard one of these ships, the tuna boat Long Xing 629, allegedly underfed and overworked their crewmembers to the point that five died at sea during a 13-month voyage in 2019-2020. Three of the deceased were buried at sea. The malnourished survivors of the voyage reported typical patterns of forced labor, including deceptive recruiting, withholding of travel documents, physical abuse and wage theft.
NASDAQ-listed Pingtan Marine Enterprise, Ltd. is a much larger operator of reefers and fishing vessels, with about 100 ships under management and 2,000 crewmembers. The reefer Fu Yuan Yu Leng 999, which was detained by the Ecuadorian Navy with 6,600 shark carcasses aboard in the Galapagos Marine Reserve, belonged to Pingtan. The company's vessels are banned by court order from operating in Indonesia because of the alleged human rights abuses perpetrated by one of its affiliated companies; Indonesia's Supreme Court has accused Pingtan of operating "torture ships" and engaging in de facto enslavement of its crewmembers.
The Treasury gave American shareholders three months to wind down their holdings in Pingtan. Any losses will be limited in size by the company's small market cap: Pingtan's stock value collapsed in 2013 and has never fully recovered. It has traded in the range of $1 per share or below since late 2021, and as of Friday, it was worth $0.64.
“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," said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson in a statement.
In addition to Dalian and Pingtan, Treasury sanctioned a range of subsidiaries, including Fujian Heyue Marine Fishing, Fujian Provincial Pingtan County Ocean Fishing, Fuzhou Honglong Ocean Fishing, and Pingtan Guansheng Ocean Fishing, along with half a dozen holding companies.
The list of sanctioned vessels is 157 ships long, and it includes dozens of vessels of the Fu Yuan Yu fleet, owned by Pingtan subsidiary Fuzhou Honglong. The fleet was caught engaging in potentially illegal shark fishing off Timor Leste in 2017, high seas driftnet fishing in 2016, unlawful squid fishing off South Africa in 2016, and forced labor in 2020, among other alleged abuses.
The Treasury's newly-issued sanctions exceed the recommendations of D.C.-based think tank C4ADS, which detailed Pingtan's operations and called for its delisting from the NASDAQ exchange earlier this year.