Samherji accused of using Faroes to avoid Namibian tax
The Faroese national television (KvF) yesterday aired a documentary that journalists of the KvF worked on in cooperation with RÚV's Kveikur programme and Wikileaks.
The documentary revealed that Samherji responded to tighter tax laws in Namibia in 2016 by registering Icelandic crew members in Namibia on board reefer vessels (cargo ships) that the fishermen never set foot on. The goal was to get around the Namibian law, that in 2016 obliged all crew members on vessels fishing in Namibian waters to pay taxes in Namibia.
Instead of doing that, which would have forced Samherji to reimburse the Icelandic crew, Samherji used a company in the Faroe Islands to pay the crew. Favourable tax incentives are in place in the Faroes for companies that register freight and cargo vessels on the islands. It allows companies to get 100% of their crews' taxes refunded.
This is what Samherji appears to have done with the fishermen in Namibia. By registering them on either Scombrus or Harengus, two reefer vessels Samherji owned and were registered on the islands, they would be able to dodge the taxes that should have been paid in Namibia.
Internal discussions within Samherji from early 2016 show that Samherji aquired legal opinion on wether the new law would aply to the Icelanders; captains, engineers etc, that were on board the Samherji trawlers fishing in Namibia. According to a report by Ernst & Young in Namibia, the new law would appy to the Icelanders.
Emails between Samherji's people show that they in return believed that the situation at hand called for swift action, otherwise Samherji would be "in deep shit“ as Aðalsteinn Helgason, the former head of Samherji's operations in Namibia, put it in an email to his coworkers. Which Arna McClure, Samherji's in-house lawyer, and a former chairperson in at least one of Samherji's Namibian companies, Mermaria Seafood, replied, that she would call a meeting with Samherji's people in the Faroe Islands.
Shortly thereafter, money started going from Samherji's two Namibian fishing companies, Mermaria and Arcticnam, to Samherji's company Tindholmur in the Faroe Islands. Over half a million US dollars one year (between the autumn of 2016 and the autumn of 2017).
Journalists from Iceland's state TV investigative team, Kveikur, yesterday reported that they had confirmed that the Faroese company, Tindholmur, paid Icelanders working on Samherji's Namibian trawlers during the same period. An Icelander among those paid that way confirmed it to Kveikur, but asked to remain anymous. He also showed Kveikur documents regarding bank transfers from Tindholmur to his account in 2016 and 2017.
The crew member also stated that he had indeed been registered as a crew member on a reefer vessel registered in the Faroe Islands but owned by Samherji. He added that dispite that, he had never set foot on the said reefer vessel, but only the trawlers fishing in Namibia. The registration was all part of Samherji's scheme, set up to avoid paying taxes in Namibia.
In last night's documentary on KvF, a tax expert in the Faroe Islands, Eyðfinnur Jacobsen, was interviewed. Journalists from the KvF had presented him with documents and part of an interview with Jóhannes Stefánsson, where he told the story of the Faroese scheme, as it had been planned shortly before he left Samherji in the middle of 2016.
Eyðfinnur Jacobsen, a lawyer specialising in tax law, stated that the scheme conducted by Samherji was illegal, both in the Faroe Islands, and especially in Namibia. In the Faroe Islands, the law states that putting up wrong information to the authorities for someone's gain is illegal in the Faroe Islands. That seems to have been done blatantly in the case of the Icelandic fishermen wrongfully registered as crew members on the reefer vessels for tax purposes.
The damage, on the other hand, was in Namibia, as taxes from operations in the country were siphoned off to a country that had nothing to do with the origin of the money involved.
„You can say that the breach is done in the Faroe Islands by a Faroese company against Faroese law, but that the effect of the breach is not in the Faroe Islands, but in Namibia,“ said Eyðfinnur Jacobsen, tax expert from the Faroe Islands, in the documentary "The Insatiables“ about the Fishrot case's Faroese connection.
Earlier this week KvF reported that authorities in Iceland, that are investigating Samherji's operations, both in Namibia and elsewhere, had alerted the Faroese tax authorities to the case. The latter one confirmed with the KvF.
KvF made multiple attempts to get reactions from Samherji before airing the story, without comments being given by the company. In an interview in the documentary, Björn á Heygum, a former politician and a Faroese lawyer that has been Samherji's representative in the Faroe Islands for close to thirty years, said that he had no idea about the illegal scheme involving the fisherman paid through Tindholmur company, despite the fact that he had been the chairman of the board of Tindholmur at the time the payments where made.
He further stated that he wasn't denying that such an illegal scheme had been put up by the company, just that he had no information about the companies' operations. He had in fact been an inactive chairman of the comany's board, only attending one meeting each year to sign annual reports. Asked if he believed Samherji had mislead him, he said that it would appear they did. The blame for that and the company's actions lay with the CEO and owners of the company, Samherji.