An interesting defence by Japanese fishing firms that bribes paid to Russian officials and deposited in Cyprus bank accounts were properly booked as “expenditures” and therefore not to be taxed as profits!!
(And from my own experience I conclude that there is no Japanese businessman – or politician – who believes there is anything wrong or unethical in bribing officials – especially in other countries. The only wrong is in paying too much or being caught.)
The Japan Times has the story (but of course does not comment on the ethics involved):
KUSHIRO, Hokkaido (Kyodo) One of four fishery firms hit for back taxes for allegedly making illicit payments to Russian officials denied any impropriety Monday and said the payments were a necessary expense. “We booked the money in the expenditure category (in accounting). It was not illicit money,” said Munemoto Nakayama, who runs Kanai Gyoin Kushiro, Hokkaido. The president spoke with reporters following media reports Sunday that Kanai and three other fishery firms provided about ¥500 million to Russian officials in the three years to 2009 so they could fish in Russia’s exclusive economic zone beyond the limits set under a bilateral agreement with Japan.
Sources said the tax authorities discovered the firms made the payments using irregular accounting methods and concluded the act constituted income concealment, ordering them to pay about ¥200 million in back taxes and penalties. Nakayama confirmed, as claimed in fresh media reports Monday, that the four firms, in addition to having given the money to Russian officials aboard their ships, remitted part of the ¥500 million to bank accounts overseas, including in Cyprus. “We have been doing Russia-related business for over 10 years and have remitted money (overseas),” he said. He also revealed that his company had already filed a revised tax return in connection with the payments as demanded by tax authorities. The four firms admitted paying the Russians to look the other way when their fish catches exceeded the legal quota, the sources said.
Walleye pollock: image wikimedia
Kanai, along with three other firms — Wakkanai Kaiyo in Wakkanai, Hokkaido, Kaiyo Gyogyo in Hachinohe, Aomori Prefecture, and Sato Gyogyo in Shiogama, Miyagi Prefecture — sends boats to Russia’s EEZ to catch walleye pollock. The annual catch quotas in Russia’s EEZ were set in the Russo-Japanese fisheries talks, and this year’s quota for walleye pollock was 10,925 tons, the Fisheries Agency said. Russian border security officials are usually present on Japanese boats to monitor their operations, the sources said. Investigative sources said they often hear of fishing companies paying the Russians and they appear to be wining and dining them as well.
Tags: Bribery and corruption, Bribing Russian officials, Japan, Japanese fishing firms, Russia
The k2p blog 