The picture is similar on the coasts. Let’s say some fish is salted. The fishermen and the person who salts the fish are paid, and the barrel is paid for as well. Somehow, it turns out that there’s an excess of salted fish in stores, and that it will not be shipped any time soon. And at the same time, another, fattier herring becomes available. What do you do? Throw the first portion away” ( Birds on the Wires. Moscow, 1982).

There is an intentional lack of clarity in statistical data. When successes need to be emphasized, we have a lot to show, and when subsidies are needed, then low harvest figures are shown. But in reality, the USSR harvested 10.4 million tons in 1990, instead of the reported 7.8 - a figure equivalent to that of 1985. And a catch of 4.5 million metric tons, when re-calculated on a per capita basis, is rather similar to the USSR’s harvest of 10 million metric tons a year. Do we need a larger total catch?

Such is the market economy. It can’t be any other way. If one adds to these numbers the harvest that was not reported in statistics (and various estimates calculate that at as much as 2 million tons), then the figure would be 6.7 million metric tons, similar to Japan. The difference is less than one million tons ("Fisheries of Russia. Notes on Corruption", in Russian).

The largest Russian harvests, around 5 million metric tons in 1992, were possible due to the healthy state of the Sea of Okhotsk and Bering Sea pollock stocks. Official accounts of annual total harvests totaling 3.5 million metric tons in the middle of the first decade on the 21st century most likely reflect the state of marine biological resources (or the results of state management of them), combined with market influence, rather than a crisis of Russian fishing itself. It is baseless to speak of a sharp decrease of annual harvests in the conditions of a market economy. For example, the total catch can be easily increased by about 1 million metric tons a year, if resources of Pacific saury, octopus and Pacific grenadiers were to be exploited. However, the major constraint is not the practical possibilities and capacity to catch, but the fact that it is not economically viable. From this point of view, there is no crisis in modern fisheries. It just became more economically reasonable, contrary to what it was during entire Soviet period. For all the public that is connected with fisheries, and especially for those people whose mentality was formed as part of the Soviet system, such positioning of the fisheries industry is rather unusual, and sometimes even unacceptable.

“Our coastal and 200-mile zone waters were generously endowed by nature. With regard to resources of crab, pollock, and sturgeon, we are first in the world, and in resources of herring, cod, places and salmonids – second. In other marine resources, such as capelin, perch family species, anchovies, sprat, halibut, saury, and so forth, Russia is within the top five countries in the world. However, it must be added that our resources are mostly concentrated in the northern seas, such as the Barents Sea, the Sea of Okhotsk and the Bering Sea and, as a result, fluctuations of their numbers are pronounced. Years of good harvests alternate with bad years. Therefore, our fisheries industry in northern waters, to compare it with agriculture, is in a high-risk zone. For example, until recently Russia was harvesting up to 600-800 thousand metric tons of Pacific (Japanese) anchovy per year in the Far Eastern seas. In addition to that, Japanese fishermen were also harvesting 3 to 4 million metric tons.” (V. Zilanov: "Fish resources of Russia: to improve and to use, or to share and sell?” in Russian).

“It must be noted that, according to international analysts, Japan consumes about 10% of the fish and seafood on the global market. According to data from Japanese customs, imports of marine biological resources from Russia by Japan in 2005 totaled 213.5 thousand metric tons, with a total value of 123 billion yen (over 1 billion US dollars); these figures were an increase from 2004 of 7.2% by volume and 5.7% by value.

However, the corresponding Russian customs statistics are 70% lower then those of Japan; this suggests that smuggling and illegal transfers of marine biological resources to Japan total around 700 million US dollars per year.

Additionally, the total economic damages to Russia due to poaching and uncontrolled smuggling of marine biological resources to the countries of the Asia-Pacific region exceeds, in the estimates of some experts, 1 billion US dollars per year.

…It has become widespread practice among the national fishing companies to deliberately declare lower totals of exported fish and seafood products, both in terms of weight and value, and the gap between declared and real prices may reach 1000 percent in some kinds of seafood. Special attention should be paid to the fact that those Russian and Japanese criminal structures, who organize illegal harvesting and illegal exports of marine biological resources, have connections within the corrupt “power structures” (army, police etc.), state authorities and local administrations of the Far East coastal regions; often they have an “inside man” even at the federal level.

Organizers of poaching and illegal exports of biological resources spend substantial sums for technical equipment on board, expensive satellite phones, and bribes for controlling authorities; they are also able to track the movements of border control and customs vessels.

Extremely large profits, received by the criminal groups from the sale of valuable marine biological resources abroad, enable them to “settle” almost all “contentious” questions with representatives of the controlling authorities.

Additionally, organizers of these criminal activities have a variety of methods at their disposal to counteract law enforcement authorities. For example, it often begins at the local level, as practically every middle-size and large-size Russian fishing vessel has so-called “representatives of the vessel owner” on board, who are supposed to track the harvests and transfer of the catch, as well as distribute the profits.

On the other end, the system to receive smuggled marine biological resources is also well established in the countries of South East Asia; these resources are “ordered” and paid for by the local fishing companies.

Moreover, different seaports of Japan and South Korea even compete with each other to develop the most favorable conditions for the Russian smugglers of marine biological resources, by providing infrastructure for storage and sales of the products, easing procedures to enter the ports, discounting fees to stay in the ports, etc.

Moreover, different seaports of Japan and South Korea even compete with each other to develop the most favorable conditions for the Russian smugglers of marine biological resources, by providing infrastructure for storage and sales of the products, easing procedures to enter the ports, discounting fees to stay in the ports, etc.

Several years ago, the Japanese seaports Nemuro and Hanasaki were just small fishing settlements. Today they are prosperous port towns, with well-developed infrastructure. The same is true for the South Korean port of Pusan.

The Nemuro seaport is fully dependant on the smuggling of Russian fish and marine products, garnering up to 90 million US dollars annually from under-the-table deals.

Another aspect of this issue is connected with the positions of some Japanese politicians, who consider the Kurile Islands and Sakhalin, and sometimes even the entire Russian Far East, as the rightful “northern territories” of Japan; from this point of view, the shipment of marine products from these fishing areas is not considered contradictory to the economic interests of Japan. It must be recognized that currently, we have a well-established mechanism of illegal harvesting and smuggling of marine biological resources. The main components of this process are the poaching itself, the transfer of illegally harvested marine products without customs declarations to other vessels waiting in open waters, the transfer of illegally caught resources across the territorial waters of Russia and its exclusive economic zone, and, finally, the sale of the smuggled products in foreign seaports.

Usually, the most valuable marine animals become the major targets for poaching. This includes crabs, sea urchin, shrimp, clams, salmon, halibut, cod, Alaska Pollock, and more.

Such barbarian exploitation of biological resources in the Far East leads to the intensified, and in some estimates even irreversible, decline of natural populations of aquatic resources, and as a result – to a corresponding decrease of TAC limits. The limits decreased from 4.5 million tons in 1999 to 3.1 million metric tons in 2005. This exploitation also causes additional environmental problems, and leads to increased social tensions in the region.

Notably, estimates published by KamchatNIRO – the Kamchatka state fisheries research agency – indicate that the resources of Kamchatka crab declined tenfold in recent years.

The amount of crab that could be harvested without any lasting damage to the population is so low, that it is no longer reasonable to even issue permits for harvesting them. According to experts’ forecasts, in 2006 no more than 2.7 thousand tons of Kamchatka crab should be caught. After distributing these quotas among fisheries enterprises, this will equal only 5 to 10 metric tons per vessel.

Beginning in 2003, the poaching of the more valuable Kamchatka crab and Blue crab in the Far East basin entered a new phase. Total allowable catch limits begin to decline rapidly, and in 2005 totaled only 7.16 thousand metric tons; at the same time, supplies of crab to Japan and the United States between 2003 and 2005 remained high, exceeding 48 thousand tons each year.

This gives us cause to declare that the poaching situation has become much worse in the last three years, and that the scale of illegal harvesting has increased. If, in 2003, the amount of Kamchatka and Blue crab exports to Japan and the USA exceeded the TAC by only 2.95 times, in 2004 it was already 4.76 times, and in 2005, 6.64 times. Furthermore, it must be mentioned that in reality, the scale of illegal harvesting became even greater, as these calculations do not include the Kamchatka and Blue crab that was supplied to the Russian domestic market or to countries other than Japan and the USA.

Such a dramatic imbalance became possible primarily due to changes that were taking place in the ways Kamchatka and Blue crab were reaching foreign markets. In order to maximize the catch under conditions of declining resources, fishing companies involved in illegal harvesting engaged in large-scale violations of fishing rules.

Sea urchins, once widespread in the coastal areas at depths of 5 to 10 meters, cannot be found today at depths above 40 meters. This is a result of large-scale illegal fishing, stemming enormous demand for the delicacy in the Japanese markets.

While the official TAC on these species is 3 thousand tons, in reality up to 10 thousand tons of this particular resource is caught and exported illegally.

…It is extremely difficult to assess the damage from illegal harvesting to stocks of the most valuable bottom-dwelling species, the Alaska pollock, which inhabit the 200-mile exclusive economic zone and territorial waters of Russia. This is because, in recent decades, large amounts of the fish have been shipped to the markets of several countries of the world, including Japan, South Korea, China, the USA, countries of the European Union, as well as to the Russian domestic market. As a result, it is rather difficult to compile and analyze all the data. In such circumstances, true harvest totals can be assessed only using indirect information. One of the major indicators is the total amount of pollock roe that is harvested by Russian companies and shipped to the markets abroad. If we base our calculations on the approved standard ratio of roe mass to total body mass, equal to 4.5%, then the true harvest of Alaska pollock in 2005 by the Sea of Okhotsk fishing fleet was at least 567.7 thousand metric tons. This figure is 116.6 thousand tons larger than the official data on harvests, and 58.9 tons larger than the approved TAC (reported use of TAC limits in 2005 was 88.6%). The sharp decline in the price of Alaska pollock observed in 2005 on the internal market (that is, the price prior to coastal processing costs) was also related to enormous amounts of fish caught in excess of the TAC, delivered to Vladivostok by the Sea of Okhotsk pollock fishing expedition.

…Drift-net fishing of salmon in the exclusive economic zone of Russia is a particular problem in the Far East, particularly on Kamchatka. In 2005, prior to the start of official harvesting season for Sockeye salmon, a total of 9 thousand tons of fish caught by drift-net vessels in the territorial waters of Russia entered foreign markets; this was already ten times more than the entire drift-net fishing TAC. The amount of salmon supplied to external and internal markets, depending on the species and on the products made from it, exceeds allowable limits by a factor of 1.5 to 2 …”

“In recent years, the problems facing the fisheries industry have been a source of constant concern. It is reported that enormous sums of hard currency are likely to be floating out of the country because of the joint efforts of our fishermen. The figures given – 500 million US dollars a year, 4 billion and even 10 billion US dollars – are equivalent to almost half of the national budget! But the problem is that nobody can get these billions and bring them back into the country. There is not a single fishing captain who is a billionaire – no figure from the national fisheries business is named in any of the known lists of rich people. Moreover, the situation in the industry is getting worse and worse. If in the 1990s, Russia was harvesting 7.5 million metric tons of fish, in 1998 it was down to 4.5 million tons, and in 1999, down to 4 million metric tons. The production of fish meal, canned fish and other fish products face similar circumstances. At the same time, exports increased, reaching in some years 1.5 million metric tons. Imports of fish also increased to 500-700 thousand tons annually. Consumption of fish and seafood products in Russia decreased, from 20 kilograms per person per year in 1990, to 9 kilograms per year in 1998. The profitability of domestic production, in the estimates of the Main State Accounting Control Chamber, was 19% to 37% in 1990-1991; it became negative in 1996 (-2.2%) and in 1998, losses reached -7.1%. Additionally, the credit debts of companies and enterprises of all types of ownership far exceed the loans and credit owed to them. If we judge solely on the basis of these figures, the industry as a whole is bankrupt. But how is it possible that a bankrupt industry generates billions of dollars abroad? What is really happening in the country’s fisheries?”. (V.K. Zilanov, “Fishing policy must be reworked”, in Russian).

Those fisheries experts who are working directly in the collection of harvesting data consider that the official statistics encompass about 80% of all harvested marine resources. The remaining 20% of data are missing for various reasons (analysis by fish protection agencies and border guard service indicate the most widespread violations of law as being the concealment or misrepresentation of harvest data, failures of vessels to communicate when at sea, missing records in the vessels’ journals, etc.

In this case, if it is reported officially that 4.5 million metric tons of fish and seafood products are caught (data from 1996), the unaccounted harvest could comprise around 1 million metric tons, at a total value of around 5 billion US dollars (based on prices in the Magadan Oblast) or about 2.5 billion US dollars (based on global average prices). As a rule, all unaccounted and unreported harvest is sold abroad.

In the analysis of the “Federal program for development of the fisheries in the Russian Federation by the year 2000” (the so-called “Fish Program”), enacted by decree of the government of the Russian Federation ¹ 930 on September 18th 1995, it is stated that over 60% of fisheries enterprises are unprofitable.

However, given market economy conditions and a lack of state subsidies, it is not possible that enterprises that only incur losses, rather than profits, can exist. If they are still operating, it suggests that they are working in the “shadow sector” of the economy. Cash turnover of this sector could be as much as 25 billion US dollars, if we assume that the average price of one metric ton (1000 kilograms) of seafood is 2.5 thousand US dollars.

This figure is derived from the following calculations: in total 4 million tons of fish and seafood are harvested annually according to official statistics, but this comprises only 40% of the true total catch.

This means that the true total catch should be around 10 million metric tons. The total value of the unaccounted 6 million tons of marine products, by the lowest possible estimates, cannot be less than 6 billion US dollars.

During the period when the USSR was second in the world in total harvests of fish and marine products, the fishing fleet was comprised of 2800 vessels, catching about 11 million tons of fish annually.

The fishing fleet of Russian Federation today harvests 4.5 million tons of fish and seafood per year. From simple calculations, we may conclude that only 1200 vessels are necessary to catch this amount. But statistics of the fisheries agency show that 2000 vessels are currently operationg on the seas. Using the proportions above, we can judge the total catch of these 2000 vessels. We arrive at a figure of 7.8 million tons. Adjusting for the low effectiveness of the fishing fleets due old and worn vessels, we reduce this total by 30%.

We come to an estimate of 1 million metric tons of unaccounted catch, valued at about 2.5 billion US dollars.

Analysis of catch and export data of the most valuable species indicates the following:

According to Japanese statistics, Russian exports of crab to the ports of Hokkaido – Rumoi, Nemuro, Otaru and Momoetsu – amounted to over 50 thousand tons in 1996. This figure was confirmed in the July 1997 TV program “Moment of Truth,” by the 1st Deputy Minister of Agriculture and Food Supplies of Russian Federation, Mr. A.V.Rodin. Hard currency that should have been received for this crab did not enter Russia Federation, and no taxes were paid.

The minimum price for the crab is 10 thousand US dollars per metric ton. This suggests economic damages of over 500 million US dollars.

In 1997, foreign companies bought quotas to fish one of the most valuable species, sockeye salmon: the quotas totaled 26 thousand tons, and were valued at 12 million US dollars. The market value for this amount of sockeye is 230 million US dollars. As such, the Russian Federation lost about 220 million US dollars.

Up to 50 thousand tons of other salmon species are also sent abroad annually without necessary documentation. At a minimum value of 500 US dollars per ton, the economic damages total 25 million US dollars.

Up to half of the overall cod catch (of 370 thousand tons per year) is sold abroad without documentation. 150 thousand tons, multiplied by 1200 US dollars per ton, amounts to a loss of 180 million US dollars.

As much as 80% of the Pollock with roe leaves the country without documentation. In 1997, over 200 thousand metric tons of this Pollock was shipped abroad, at a total value of over 400 million US dollars.

Taking into account also sea urchins, sea cucumbers, clams, shrimp and some very rare but extremely valuable fish species, the total economic damages from illegal exports of high-value marine bioresources constitute 1.225 billion US dollars.

The amount of all other illegally exported products is over 1 million metric tons, at an average value of 800 million US dollars.

Therefore, we can conclude that in 1996-1997, due to the lack of control by the state, a total of 2 billion US dollars worth of fish and seafood was shipped illegally out of the territory of Russian Federation (including its exclusive economic zone).

According to official data, about 4 to 4.5 million tons of different fish and seafood is harvested each year. Of this:

• 1 million tons go to the domestic market;
• 1 million tons are officially exported, and
• 2 to 2.5 million tons are exported illegally.

The average global price per one ton of “high-value” species of fish and seafood is 2.5 thousand US dollars. The minimum loss is calculated as such: 2.5 thousand US dollars multiplied by 2 million tons of fish and seafood equals 5 billion US dollars that did not enter the Russian economy, and were not taxed.

The total annual harvest of Norway is only 2 million tons of fish and other seafood. The value of all Norwegian exports is 3.3 billion US dollars a year.

The value of the total Russian annual catch (that is, officially 2 million tons) is about 5 billion US dollars.

Accordingly, this means that the value of all undocumented Russian exports of fish and seafood equals around 2.5 billion US dollars.

The official total value of the annual Japanese harvest (8.1 million tons) is 2488.8 billion Yen (about 25 billion US dollars, or more than 3000 dollars per ton).

The value of our harvest should be approximately half of Japanese, as there is no reason why fish caught in Russia should be priced lower to those caught in Japan. Adjusting for the inefficiency of the Russian fleet, we can reduce this estimate by half. But even then, the total value of our annual catch should be no less than 7 billion US dollars. From this calculation, we see that the “shadow” fisheries industry conceals much more than 2.5 billion US dollars of fish per year.

Despite the fact that harvest and export statistics for marine biological resources are complicated and hard to obtain, seven different methods of calculation provide rather similar results.

It can be assumed that uncontrolled and unrecorded harvests and exports of fish and marine products caught in the territorial waters, exclusive economic zone and on the continental shelf of the Russian Federation fall between 1 and 2 million metric tons per year, at a value of at least 2.5 billion US dollars.

We can be rather certain that, without substantial support at the level of the fishing industry and the state, this would not be possible. As such, we must understand that these 2.5 billion US dollars are not shared only by fishing oligarchs (so to speak) and smaller fish thieves, but that a large portion of this tainted money ends up in the pockets, or rather the foreign bank accounts, of higher and mid-level state officials. That is the only reason why crime and corruption still flourish in the fisheries industry of Russia, and why there is no fight against it.