Argentine banana importer under fire for price fraud

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Argentine banana importer under fire for price fraud

Argentina’s Federal Administration of Public Revenue (AFIP) has filed a criminal complaint against Mendoza-based banana importer Argenfruit for false declarations of product quality.

An official government release said the company had gained undue benefits of US$10 million from declaring Ecuadorian banana imports as 'first-to-superior value' when they were really of 'secondary value'.

The stated Cavendish bananas that Argenfruit imported were worth US$4.44 a carton under Southern Cone trading bloc standards, but due to the false declaration of higher quality the company was able to sell at a price of US$6.90 a carton.

For this maneuver, the complaint was made relevant to the Central Bank of Argentina for not breach of the Criminal Exchange Act.

The release said the company had a banana import operation was worth US$50 million between 2010 and 2011, and had sought to hide economic links to Ecuadorian business Nelfrance Export during AFIP investigations.

Argentine newspaper La Nacion reported that following the complaint, customs had blocked the import of 460 containers of fruit in Chile, causing domestic market prices to nearly double due to the shortage. Argenfruit accounts for around 30% of the Argentine banana market.

To view the official report (in Spanish) click here.

The Argentine Customs Code establishes penalties of 4-10 years prison and a fine of 4-20 times the value of the merchandise, as well as other sanctions, for smuggling crimes with features described by the AFIP.

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