European reefer operators and owners face tens of millions in possible fines after a series of penalty notices from the US Customs and Border Protection (CBP) agency.

London-based Star Reefers and Swedish-based, Russian-controlled operator Cool Carriers with its owner Baltic Shipping account for the lion's share of voyages that the agency is known to have objected to so far.

But Norway's Green Reefers and Ecuador's Noboa Group are also among those whose vessels were named by US Customs in August in an enforcement blitz to punish violators of the Jones Act.

TradeWinds has compiled the penalty notices that have been disclosed in an Alaska federal lawsuit seeking to stop the agency's action. The harshest penalties demanded of a shipowner so far, some $28.31m, face Antwerp-based Trireme Vessel Management, an arm of Ecuador's Noboa Group whose five reefers trade with Cool Carriers.

TradeWinds' sister publication Intrafish recently broke the news of the unprecedented $350m enforcement drive, whose primary target is the main charterer in the trade, Seattle-based American Seafoods. The action has brought the US pollock trade to a standstill in high season with cold-chain warehouses brimming with fish that owners are afraid to move.

The US claims American Seafoods gave its frozen fish a short pro-forma ride on a Canadian rail track to nowhere, then trucked it over the US border to take advantage of the so-called "Third Proviso of the Jones Act", a loophole in the US cabotage regime that was meant to allow using cross-Canada rail links.

Lawyers for American Seafoods have gone to court in Alaska seeking to stop the agency action, saying US Customs had known and approved of the trade all along, urging that a key part of the country's fisheries supply chain faces massive disruption.

Not just the charterers, however, but all sides involved in relevant cargo moves, including ship operators and shipowners, may be at risk of fines, with potentially duplicate assessments for owner and charterer.

The fines can equal the value of the cargo carried, in several cases exceeding $10m per voyage.

"The draconian penalties noticed by CBP are now more than 35 times the largest Jones Act penalties ever collected," wrote American Seafood's lawyers in urging for a temporary restraining order against the agency.

Some or all of the shipowners with exposure are taking steps to force American Seafoods to cover the fines, saying they had no idea their ships were being chartered into a decades-long scheme to bust the Jones Act.

Lawful trading purposes

The penalties known so far are linked to some 17 voyages performed between 2017 and 2020 under charter for American Seafoods' subsidiary Alaska Reefer Management (ARM) between cold storage terminals in Alaska and New Brunswick run by its sister company Kloosterboer International Forwarding.

In the case of the Noboa Group's Trireme ships, US Customs demanded $14.75m for a single 2020 voyage of the 627,689-cbf Duncan Island (built 1993) from Dutch Harbor in Alaska to Bayside in Canada, just facing the US border. A similar voyage by the 627,689-cbf sistership Charles Island (built 1993) brought notice of a $13.56m penalty.

"Both of these ladys had been fixed to ARM for lawful trading purposes from Alaska to Canada and thereafter the Netherlands," wrote shipbroker George Filias to ARM president Per Brautaset on behalf of the owner.

"The fixture concerned cargo of fish which as per customs notifications was ultimately imported back to Calais, Maine. Owners in no way were complicit nor did they have any knowledge that their ships were being used as a means to circumvent any laws/regulations of the US."

"Owners denounce these claims and as stated verbally to you, have engaged legal counsel to defend them against these allegations," Filias wrote to Brautaset.

Another of the biggest claims is connected to a 2020 voyage of a Green Reefers ship, the 375,723-cbf Green Costa Rica (built 1992). In that case, US Customs handed charterer ARM a $10.18m penalty but it is not known whether the shipowner faces a similar demand.

Officials at Star Reefers, Green Reefers, Cool Carriers and its owner Baltic Shipping, and Trireme Vessel Management did not immediately respond to email enquiries from TradeWinds soliciting comment on the fines and their plans to deal with them.

Reefers named by US Customs in Jones Act penalty notices
Ship Fine Owner/Operator
424,307-cbf Wellington Star (built 2002) $787,000 Star Reefers
516,530-cbf Durban Star (built 1993, now Hai Feng 728) $1.03m Star Reefers
576,064-cbf Afric Star (built 1990, now Cheng Hang) $2.69m Star Reefers
596,157-cbf Andalucia Star (built 1991; scrapped) $3.05m Star Reefers
506,228-cbf Solent Star (built 2001) $5.31m Star Reefers
618,206-cbf Star Standard (built 2009) $358,000 Star Reefers
486,761-cbf Dunedin Star (built 1994) $485,000 Star Reefers
596,157-cbf Almeda Star (built 1991, now Shun Ze Long 6) $908,000 Star Reefers
527,399-cbf Ivory Dawn (built 1991, now Baltic Pearl) $1.26m Cool Carriers/Baltic Shipping
765,753-cbf Ditlev Reefer (built 1990) $1.21m Cool Carriers/Baltic Shipping/Chartworld
677,143-cbf Swan Chacobuco (built 1990; scrapped) $670,000 Cool Carriers/Baltic Shipping/Chartworld
424,306-cbf Chilean Reefer (built 1992; scrapped) $3.36m Cool Carriers/Baltic Shipping/Chartworld
627,689-cbf Duncan Island (built 1993) $14.75m Cool Carriers/Baltic Shipping/Trireme (Noboa Group)
627,689-cbf Charles Island (built 1993) $13.56m Cool Carriers/Baltic Shipping/Trireme (Noboa Group)
547,557-cbf Crown Garnet (built 1996) $7.82m Cool Carriers/Baltic Shipping
375,723-cbf Green Costa Rica (built 1992) $10.18m Green Reefers
516,227-cbf Runaway Bay (built 1992) $1.73m Searus Shipping
Source: American Seafoods, Alaska Federal District Court, VesselsValue