R. v. Hang Hing Herbal Medicine Ltd., 2022 BCPC 5

Citation: R. v. Hang Hing Herbal Medicine Ltd. 2022 BCPC 5 Date: 20220117 File No: 255213-1 Registry: Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA (Criminal Court) REGINA v. HANG HING HERBAL MEDICINE LTD. REASONS FOR SENTENCE OF THE HONOURABLE JUDGE H. DHILLON Counsel for the Crown: C. Coulson Counsel for the Defendant: D. Tarnow Place of Hearing: Vancouver , B.C. Dates of Hearing: October 15, 2021 Date of Judgment: January 17, 2022 [ 1 ] The accused, Hang Hing Herbal Medicine Ltd. (“Hang Hing”), entered a plea of guilty to one count of importing Oceanic Whitetip shark fins into Canada without the requisite permit. In doing so, it committed an offence under s. 22(1) (

a) of the Wild Animal

and Plant Protection and Regulation of International and Interprovincial Trade Act , S.C. 1992, c. 52 (“ WAPPRIITA ” or “the Act ”). [ 2 ] The Crown and Defence are agreed that a fine and forfeiture of the property seized by the Crown is a fit sanction. They are not in agreement as to the quantum of the fine. [ 3 ] The majority of the facts surrounding the commission of the offence were admitted in a filed Agreed Statement of Facts.

In addition, the Court heard viva voce evidence at sentencing from Desmond Pang, an authorized representative of the Defendant Hang Hing, and reviewed the submitted defence materials on sentencing. The Crown filed expert and technical evidence on oceanic whitetip shark species, as set out in the report of E. Cooper Environmental Consulting, Delta, British Columbia dated November 2018 (“Cooper Report”), and the Expert Opinion Statement of Dr Jenny Giles, PhD, CWFS, dated October 16, 2018.

Circumstances of the Offence [ 4 ] The chronology below is adopted from the admitted facts. [ 5 ] On September 25, 2017, Hang Hing imported into Canada a shipping container from China. The consignee for the container was listed as Hang Hing Herbal Medicine Ltd., with a destination address of its retail store at 299 East Pender Street in Vancouver, B.C. The exporter was Heung Cheong Trading Company, based in Kowloon, Hong Kong. [ 6 ] The gross weight of the container was 23,720 kilograms, comprised of 1229 packages of food stuffs.

Packages 487 to 508 were described as 550 kilograms of “Yu Gu (Chinese Herbs)”. [ 7 ] On October 2, 2017, CBSA Border Services Officers inspected the container and discovered 22 bags of suspected shark fins.

They informed Environment and Climate Change Canada (“ECCC” or “Environment Canada”) whose officers confirmed that 22 large white canvas bags contained dried shark fins. [ 8 ] Between October 5 and November 2, 2017, Environment Canada took two sets of samples, for a total of 70 fin samples, from the 22 seized bags for DNA analysis. [ 9 ] DNA analysis indicated that 13 of the 22 fins from the first set of samples from October 5 were from the species Carcharhinus Longimanus , otherwise known as Oceanic Whitetip shark.

The remaining 9 samples were identified as Carcharhinus Falciformis , otherwise known as Silky Shark. [ 10 ] With respect to the second set of 48 samples from October 31 and November 2, the species Carcharhinus Longimanus (Oceanic Whitetip shark) was identified in 32 of the 48 sampled fins.

Of the remaining 16 samples, 15 were identified as Carcharhinus Falciformis (Silky Shark) and one was identified as coming from other shark species. [ 11 ] Of the 20,196 shark fins present in the imported container, based on Environment Canada’s sampling, it is estimated that 64.29% (12,984) of the fins imported were from the Oceanic Whitetip shark. [ 12 ] The Defendant admits that at the time of the offence, it did not possess a permit issued under section 10(1) of the Act to import Oceanic Whitetip shark. Hang Hing concedes that it did not act with due diligence to prevent the commission of the offence.

Circumstances of the Offender [ 13 ] The defendant Hang Hing Herbal Medicine Ltd. is a registered corporation in British Columbia. It was incorporated on September 20, 1994. Its sole director and officer is Che Wood Pang. The Pang family, including Mr. Pang, his wife and their son Desmond Pang, operate the Hang Hing Herbal medicine store in Vancouver’s Chinatown, where they sell Chinese medicine, herbs, vitamins and food stuffs, including dried seafood. [ 14 ] The Pang family works daily at their shop location. The elder Pangs are assisted by their son Desmond Pang.

Desmond Pang testified at the sentencing hearing. [ 15 ] Desmond Pang is 40 years of age and graduated from the University of British Columbia in Computer Sciences. He lives with his parents in the family home. He has been working at the family run store for over 10 years. The store premises are rented, and not owned by the Defendant company. His primary duties are customer service, cashiering, and stocking shelves. [ 16 ] Their daily retail trade is with walk-in customers, but they also sell to restaurants, food processing companies, and to other herbal business. Most of their customers are Asian businesses.

The shop imports the majority of its stock from China or Hong Kong, and to a lesser extent from other Asian countries. [ 17 ] Desmond Pang testified that his father places their order for goods by telephoning their long-standing supplier of some 27 years. They do use other overseas suppliers but to a far lesser extent. Mr. Pang Sr. keeps a tally of goods being purchased from their Hong Kong supplier. Once the order is large enough to warrant shipping in a container, their agent ships the goods. On arrival to the Port of Vancouver, a customs agent helps with processing the shipment to clear customs.

The shipment then goes to a warehouse for unloading. [ 18 ] Desmond Pang stated that they have an expectation of what goods they will receive under their order, but they can not be certain until the goods land at the warehouse. [ 19 ] Mr. Pang was cross-examined on the order form, Exhibit # 3, tab 4, which listed the goods they were importing into Canada. It was prepared by their exporter in Hong Kong. [ 20 ] Mr. Pang agreed that the shipment order at issue represents around 1229 boxes of goods, with an approximate total value of CA$130,000.00.

He confirmed that Hang Hing uses the same supplier for their orders, because their supplier is familiar with how Hang Hing works and what they like to import. Hang Hing receives shipments 4 to 6 times a year of a similar size and value of the goods,

subject to some variation depending on the goods. [ 21 ] The shark fin product was found in boxes marked on the order form in English as “Yu Gu (Chinese Herbs)”. Mr. Pang testified that “Yu Gu” means cuttlefish bone.

The weight of the item was 550 kilograms. [ 22 ] Hang Hing denies that it deliberately attempted to circumvent the regulations by ordering shark fins into the country under the guise of other fish bones, or that it intentionally mislabelled them as “Yu Gu” on the exporter’s order list. [ 23 ] Desmond Pang testified that Hang Hing expected to get cuttlefish bone, based on the order and corresponding prices charged. He said that shark fin would be ten times more expensive.

They were surprised to be told they had oceanic whitetip shark cartilage by government officials. [ 24 ] Hang Hing was aware of the need to obtain a permit to import shark fins. It is conceded by the Defendant company that their method of ordering was deficient and did not meet the high standard of due diligence. The Defendant Hang Hing acknowledges that it should have been much more careful in its ordering procedures. [ 25 ] Hang Hing has implemented changes since this offence. Desmond Pang will exercise greater oversight on ordering and take over ordering responsibilities from his father.

They will let their supplier know if something they order needs a permit by reference to the CITES website. They will not place verbal orders without recording in writing which items, to their knowledge, require an import permit. [ 26 ] Desmond Pang admitted the changes Hang Hing made after the discovery of the oceanic whitetip shark were easy and could have been easily implemented at any time. He agreed that checking on a website to see if a species requires a permit for importation does not cost any money or cause inconvenience.

He agreed that suppliers also know what requires a permit and they can readily accommodate such requirements on shipments. [ 27 ] Mr. Pang accepted responsibility on behalf of Hang Hing for bringing oceanic whitetip shark into Canada without a permit. He expressed deep regret and shame that was felt within the family about this episode. They have not ordered “Yu Gu” at all since the offence.

They describe their entanglement with the criminal justice system to be a very “scary” experience. [ 28 ] Hang Hing presented evidence of its financial history through unaudited statements of Income and Retained Earnings, an extract of which shows the following: 2017 2018 2019 2020 Revenue $ 2,481,713 2,369,300 1,950,016 1,614,540 Cost of Goods 2,208,287 2,085,395 1,715,521 1,362,905 Gross Profit 273,426 283,905 234,495 251,635 Net Income 69,160 (42,845) 25,941 19,291 Retained Earnings 310,383 267,538 271,146 316,378 The total “management salaries” is listed as $213,517 in 2018 and $181,768 in 2019, but this apparently includes employee salaries.

For the year ended October 31, 2020, the management salary of $160,326 is more accurately broken down to $77,626 in salary paid to the Pang family members, and $82,700 wages paid to other employees. [ 29 ] On the basis of the foregoing, the Crown accepts that Hang Hing is a “small revenue corporation” within the meaning of the Act . [ 30 ]

Section 22.02 of the Act defines a “small revenue corporation” as any corporation which has a gross revenue of under $5 million in the 12 months prior to the offence date. The offence in this case occurred on or about September 25, 2017. [ 31 ] The Crown proceeded summarily in this prosecution. The sanctions under WAPPRIITA for

summary offences committed by a small revenue corporation are set out under

section 22 and are as follows: Penalty — individuals 22(4) Every corporation that commits an offence under subsection (1) and that the court determines under

section 22.02 to be a small revenue corporation is liable …. (

b) on

summary conviction, (

i) for a first offence, to a fine of not less than $25,000 and not more than $2,000,000, and (ii) for a second or subsequent offence, to a fine of not less than $50,000 and not more than $600,000 and not more that $4,000,000.

Applicable Principles on Sentencing under the WAPPRIITA Framework [ 32 ] Canada is a signatory to the Convention on the International Trade in Endangered Species (“CITES”), a multilateral treaty to protect at-risk plants and animals, and ratified its obligations by enacting the Wild Animal and Plant Protection and Regulation of International and Interprovincial Trade Act ( WAPPRIITA ). [ 33 ] WAPPRIITA is federal legislation in Canada which regulates the importation of animals and animal products. The Act’ s

Preamble states that the legislation relates to “the protection of certain species of wild animals and plants and the regulation of international and interprovincial trade in those species.”

[ 34 ] Canada has agreed to protect certain species from threat of extinction caused by overharvesting, and to enforce restrictions against trade in designated endangered species.

Section 6 of the Act prohibits importation into Canada of specifically enumerated species except in accordance with a permit issued under the Act.

Oceanic Whitetip Shark ( Carcharhinus Longimanus ) [ 35 ] In March of 2013, the CITES signatories agreed that Carcharhinus longimanus – also known as the Oceanic Whitetip shark – would be added to Appendix II of CITES, requiring protective import mechanisms to be followed effective on or after September 2014. [ 36 ] The Cooper Report notes that Oceanic Whitetip Sharks are large, finned sharks distributed widely through tropical, subtropical and warm-temperate offshore waters.

Once found commonly and abundantly in oceanic waters, in recent decades there has been a significant and alarming decline in the oceanic whitetip shark population which can be attributed exclusively to overfishing. The shark is taken as a bycatch in tuna and swordfish fisheries. Its meat is considered to be of low commercial value and is often discarded.

Its fins, however, have high value in international trade because of its association with luxury foodstuffs such as shark fin soup, and as a source of chondroitin used in herbal medicines marketed for osteoarthritis or other illnesses [ 37 ] CITES noted that over-exploitation of the oceanic whitetip shark in the international fin trade and in bycatch contributed to its decline of 60% -70% in the northwest and central Atlantic Ocean, and up to a 10-fold decline in abundance from the baseline in the central Pacific Ocean.

CITES called for international trade regulation of the species to prevent the oceanic whitetip shark from becoming threatened with extinction. In 2015, the oceanic whitetip shark was assessed as a “vulnerable” species, meaning that there was a significant risk that the species could become extinct in the world. [ 38 ] The Cooper Report also cites the 2016 findings of the U.S.

National Marine Fisheries Service (NMFS) that due to “threats and ongoing abundance declines, oceanic whitetip shark are likely to become endangered within the foreseeable future and have a moderate risk of extinction throughout its global range within 30 years.” NMFS listed the oceanic whitetip shark as a threatened species in 2018. [ 39 ] In short, there is scientific consensus that the oceanic whitetip shark is a species that is presently under threat and at a moderate to high risk of extinction unless global trade is regulated.

Legislative Provisions [ 40 ] From September 2014 onward, consistent with its CITES obligations, Canada has required any party seeking to import Oceanic Whitetip shark, or any part or derivative of Oceanic Whitetip shark, into Canada to first obtain a permit from the Minister of the Environment. [ 41 ] Section 22(1) of WAPPRIITA makes it an offence to contravene any provision of WAPPRIITA or its regulations. [ 42 ] WAPPRIITA contains express sentencing principles and objectives under sections 22.07 and 22.08 of the Act : Fundamental purpose of sentencing 22.07 The fundamental purpose of sentencing for offences under this Act is to contribute, in light of the numerous serious threats to plants and animals and their importance to the environment, to respect for the law regulating international and interprovincial trade in animals and plants through the imposition of just sanctions that have as their objectives (

a) to deter the offender and any other person from committing offences under this Act ; (

b) to denounce the unlawful trade in certain animals and plants and to make it unprofitable; and (

c) to recover, if possible, certain species of animals and plants unlawfully traded ... [ 43 ] The sentencing principles under the Criminal Code are expressly incorporated under s. 22.08(1) of the Act .

There is a legislative directive to consider and apply any statutory aggravating factors under s. 22.08(2) of the Act , which include: • the damage or risk of damage caused, directly or indirectly, to the species; • the degree of offender’s intentionality or recklessness in the commission of the offence, • any profit motive underlying the offence, • the offender’s prior history of non-compliance with wildlife species regulations, or • evidence of a high degree of planning in the commission of the offence. [ 44 ] Under s. 22.09 of the Act , the fines may be levied in a cumulative manner as if each animal, or part, or derivative of the animal had been the subject of a separate information.

Issue for Determination [ 45 ] At issue in this proceeding is what type of sanction represents a balancing of the fundamental purpose and objectives of sentencing under the Wild Animal and Plant Protection and Regulation of International and Interprovincial Trade Act , having regard to the circumstances of the offence and that of the offender?

Sentencing Position of the Crown and Defence [ 46 ] The Crown seeks a fine of $200,000.00 and forfeiture of the seized goods. It says a substantial fine is required to correspond to the gravity of the harm caused to the oceanic whitetip shark and to denounce and deter those engaged in trade in this endangered species. [ 47 ] The defence position is that the quantum of the fine is disproportionate to the fault or culpability of Hang Hing, and fails to meet the test of parity having regard to similarly situated offenders. Hang Hing says a fine of $200,000 would devastate and bankrupt the company.

Given the impact of the COVID-19 pandemic on Hang Hing operations, the defence seeks the imposition of the minimum fine of $25,000. It does not object to a forfeiture order. Discussion [ 48 ] I have been provided with case authorities by the Crown and Defence, including the following: R. v. Terroco Industries Limited , 2005 ABCA 141 ; R. v. Brown , 2010 BCCA 225 ; R. v. Schafhauser , 2017 BCSC 2287 ; R. v. Li Wan (May 6, 2019), Surrey 228648-1 (BCPC); R. v. Pacific Gateway Holding Inc ., 2021 BCPC 37 ; and R. v. Kiu Yick Trading Company Ltd . (May 18, 2021), Richmond 63793-1 (BCPC).

The Gravity of the Harm [ 49 ] In assessing the gravity of harm arising from breach of regulations directed to protecting endangered species, the focus must be on an assessment of the risks of harm that led to the species being under threat of endangerment, and secondly and more specifically, the gravity of harm occasioned by the specific conduct in issue. [ 50 ] As to the general degree of harm, I adopt the analysis of Judge Vandor in R. v.

Kiu Kick Trading , at paras. 40 – 41, that the harm must be assessed in the context of the destructive impact of illegal or unregulated trade practices on global shark populations, and the importance of reinforcing the need to utilize permits to ensure that trade in such species does not drive a vulnerable species towards extinction. [ 51 ] The expert and technical evidence filed at this sentence hearing shows a significant and alarming decline in the oceanic whitetip shark population in the past decade.

In short, in the millennia of existence of this species on earth, this sharply narrowing window of viability denotes a very real, very serious risk of harm to the oceanic whitetip shark species. [ 52 ] Absent robust enforcement of illegal trade in oceanic whitetip shark by-products, there is a substantial risk of this species becoming endangered, and a “moderate to high risk” of extinction within the next 30 years. [ 53 ] As to the specific harm arising from the offence, Dr Giles’ report notes that the evidence of endoskeletal shark cartilage examined in this case corresponded to a minimum of 2272 sharks.

She notes that the shipment seized in the case at bar contained items of extremely low weight and density and represented “much higher numbers of individual sharks per unit weight/ volume.” [ 54 ] The defence notes, correctly, that the internal cartilage of shark fins found in the shipment to Hang Hing can be differentiated from the fins which drive the demand for shark fin soup. However, it is also the case that the lesser value cartilage seized from Hang Hing’s shipment is nonetheless the remaining by-product of sharks finned for higher value trade.

The cartilage from fins that does not enter the shark fin soup trade still enters the trade market as source of chondroitin, which is used in marketing wellness and health supplements. [ 55 ] On the evidence, the total weight of the “Yu Gu” was 550 kilograms, of which an estimated 64% or 352 kilograms (776 pounds) was said to be oceanic whitetip shark. [ 56 ] The Cooper Report at pp. 1-2 notes that between 2014-2016 a total of 5,107 kilograms of oceanic whitetip sharks were “legally commercially traded internationally”, according to trade data from exporter reports.

Clearly, this single shipment of 350 kilograms of oceanic whitetip shark cartilage imported by Hang Hing represents trade of a significant amount when compared to legally reported trades. It raises a concern about significant unreported and underreported trade in this protected species unless there is full compliance with the permitting system under CITES and WAPPRIITA and just consequences for non-compliance.

Degree of Responsibility of Hang Hing [ 57 ] The degree of responsibility of the offender – or moral fault – is assessed both by the knowledge of the offender about the standards required to be met in a regulated field, and the degree of deviation from those standards. [ 58 ] In reviewing both the testimony of Desmond Pang, and Hang Hing’s compliance history under WAPPRIITA , I find that Hang Hing was at all times aware of the need to comply with both the obligation to accurately declare the nature of the species being imported into Canada, and to obtain permits for specific CITES listed species. [ 59 ] For example, on at least six prior occasions between 1998 and 2013, shipments imported by Hang Hing were flagged for inspection and found to contain CITES listed species not declared and/or not bearing the required permits for importation.

The interventions resulted in seizures, without regulatory charges. [ 60 ] It is noteworthy that on October 23, 2015, a shipment of 20 boxes of “unidentified shark fin” was seized and inspected. DNA testing reveal that it was not a CITES protected species (at that time) and the shipment was returned to Hang Hing.

This brought to the forefront that Hang Hing knew there was a concern about shark fin importation, and it needed to be clear and precise in its ordering and labelling of imported goods, including what species were being brought into Canada, and to secure appropriate permits where required. [ 61 ] I am satisfied that this prior history is relevant to determining the degree of moral fault. Through earlier regulatory interventions, Hang Hing was made aware of the need for strict compliance with import permit requirements for various CITES listed species. These

inspection and enforcement interventions were express indications to Hang Hing that it needed to place its orders with particularity and clarity for purposes of inspection at border entry.

It was armed with this knowledge when it arranged for the shipment of so-called “Yu Gu” to be imported in September 2017. [ 62 ] I find that Hang Hing’s system of verbal orders, made by telephone and not recorded or memorialized in writing, is a highly deficient system in the context of a strictly regulated field in the importation of foodstuffs and herbal medicines. [ 63 ] I note that Hang Hing had over $2,000,000 in gross revenues in the year ending October 31, 2017, the year in which the offence was committed. It had a similar volume of gross sales and net profits in 2018.

These figures indicate that a significant volume of goods was sold by Hang Hing in the course of doing business, much of it through importation into Canada.

Within this context, an absence of paper records recording what precisely was ordered, and what product was shipped for import, supports a finding of a lax and deficient ordering and record-keeping system by the importer. [ 64 ] Such lax practices can provide a means of avoiding responsibility, by leaving a trail of ambiguity instead of certainty as whether or not any steps, much less reasonably diligent steps, were taken to comply with import regulations. [ 65 ] In my judgment, Hang Hing did not act close to the due diligence standard to prevent the importation of oceanic whitetip shark.

It did not send a written order which confirmed that it wanted only cuttlefish bone. It did not advise its supplier that no CITES designated species of fish, including oceanic whitetip shark, could be shipped without the requisite permit. Well over one-half of the “Yu Gu” order it received was oceanic whitetip shark product, something its supplier could have avoided with clear directions. Hang Hing did not take these simple, straightforward, preventative and precautionary steps.

This was far from a “near miss” with compliance where all reasonable steps had been taken to avoid the breach but fell just short of compliance. [ 66 ] Sentencing principles call for individualized sentencing for the offender having regard to their degree of culpability, any aggravating and mitigating factors, weighed together with parity and restraint.

The primary sentencing objectives in this case are protection and conservation of a CITES II species, denunciation of the unlawful conduct which contributes to the decline in a vulnerable species, and specific and general deterrence through appropriate sanctions. [ 67 ] It is an aggravating factor in this case that damage to the oceanic whitetip shark species can be linked to the fact that every shipment which avoids measures targeted at conservation and species protection contributes to the over-exploitation and depletion of this at-risk species.

The fish bones in this case correspond to a minimum of 2272 sharks harvested. This number may not be large as a percentage of a typical fisheries catch, but it represents, in one shipment, a not insignificant number of sharks whose fins were harvested and sold, and the by-product of which was shipped as “fish bone” to Vancouver. [ 68 ] I do accept that the dollar value of the impugned product was not significant. As noted by the defence, the price listed for “Yu Gu” was approximately $6,000. Of this total, the oceanic whitetip shark cartilage had a pro rata value of $3,840.00.

This is about 3% of the global Hang Hing order of $130,000.00. [ 69 ] I accept that Hang Hing brought in the product for the purpose of profiting by sale, but again, at the lesser end of the scale in terms of aggravation, because of the low dollar value of the product itself, in the context of the total shipment, and corresponding lower levels of profit attainable from it. [ 70 ] It is aggravating that Hang Hing has a history of noncompliance by not declaring or not possessing permits for CITES listed species in 2000, 2003, and 2013.

A failure to heed prior regulatory warnings, and a failure to amend internal practices to meet CITES requirements, contributed to this occurrence. As noted in R. v. Terroco , at paras. 35-37, “… failure to take simple and inexpensive steps to avoid the unwanted consequences … is an aggravating factor”, and “… offences which involve recklessness will call for more severe penalties that those which are near due diligence misses”. [ 71 ] As for mitigating factors, Hang Hing has pleaded guilty and saved the justice system the cost and expense of trial proceedings.

It has expressed sincere remorse for its failings through the testimony of Desmond Pang. I accept that Hang Hing has been specifically deterred from risking a future breach of CITES import requirements. Another mitigating factor is the greater degree of transparency Hang Hing provided in its financial disclosure. [ 72 ] In assessing both parity and proportionality, I have reviewed the cases presented.

The central thread in these cases is that the financial penalty imposed must not be seen simply as the cost of doing business, and a deterrent fine must “be more than a slap on the wrist but less than a fatal blow”: R. v. Kiu Yick at para. 28, citing Terroco Industries Limited . [ 73 ] In R. v.

Schafhauser , a salmon fisheries violation case, the court noted at para. 11 that penalties imposed to protect a valuable resource “must be sufficiently severe to communicate to the accused that there is a high risk associated with their illegal activities both for the resource they are affecting and to themselves for their conduct.” [ 74 ] In R. v. Pacific Gateway Holdings, the structural relationship between the Defendant and related companies was somewhat opaque, and its true financial picture difficult to accurately discern. Its net income for 2017 was around $48,000 and it was said to be operating as a loss.

It twice imported over $400,000.00 in goods mislabelled as “Japanese eels” of which a significant percentage (39% and 48%) were CITES regulated European eels. The goods were released and were not subject to forfeiture. [ 75 ] In Pacific Gateway Holdings , the Court found the offender’s culpability to be a “near miss” because of limited foreseeability that Chinese origin eels would contain European eels. On count 1, the court imposed a fine of $50,000 plus $40,000 on the profit gained, for a total financial penalty of $90,000.00.

On count 2, the penalty was a fine of $50,000 and DNA testing costs of $23,776 for a total financial penalty under count 2 of $73,776. [ 76 ] R. v. Kiu YickTrading dealt with sentencing for the offence of unlawful importation of silky shark fin on February 9, 2018. The Defendant had been given advance notice of the status of silky shark as a protected species several months before it placed its order. It ordered shark fin from its supplier in Hong Kong without specifying the type of shark fin or inquiring about the need for a permit. It

failed to ensure that its $180,000.00 order did not contain a CITES regulated species. Its shipment contained silky shark, estimated at between 1,964 and 3,185 individual sharks, for which a permit was required. Its failure to secure a permit was found to be more than a “near miss”, and at the “moderate to low end” of the culpability spectrum. [ 77 ] On May 18, 2021, the Defendant Kiu Yick was sentenced to a fine of $60,000 with six years to pay. In addition, the company forfeited $180,000.00 of seized goods.

The collective financial impact (including forfeiture) was $240,000. [ 78 ] I find that the circumstances in this case are similar to Kiu YickTrading on a number of fronts. Both corporate entities are family run businesses which sourced goods from Hong Kong. Both had deficient ordering practices resulting in CITES II shark species entering Canada without permits. Both failed take simple steps to ensure that the shipment met import requirements.

Both brought in shipments containing specimens from at least two thousand at-risk shark species. [ 79 ] It is more troubling in Hang Hing’s case that the shipment was entirely mislabelled as “Yu Gu (Chinese herbs”), providing erroneous information as to its true contents, while in Kiu Yick Trading the shipment was correctly labelled as shark fins but not identified specifically as CITES protected silky shark. The kind of mislabelling in Hang Hing makes detection and enforcement far more difficult and is a more aggravating factor. [ 80 ] One significant difference is in the dollar value of the goods imported.

Kiu Yick Trading brought in a shark fin shipment valued at $180,000.00 which it forfeited; Hang Hing imported a far lower amount, around $3,800 in oceanic whitetip shark fin product, in a $130,000.00 shipment. The relevance of the dollar value of the goods is related to the economic risks undertaken by an importer who contravenes import requirements and places the shipment at risk of forfeiture.

Although relevant, the central focus in sentencing is an individualized assessment of the harms arising from breaching import requirements with respect to a protected species and the degree of fault in a particular case. [ 81 ] Kiu Yick Trading’s fault was assessed to be at the moderate to low on the culpability scale. I place Hang Hing’s fault to be higher, near the moderate level, for its lax and deficient ordering practices, mislabelled goods, and prior history of concerns with regulatory compliance.

Penalty [ 82 ] I have considered the objectives of sentencing in the context of the facts in this case, and the particular circumstances of the Defendant.

I have also taken into account the financial position of the Defendant as shown in its financial statements. [ 83 ] On the issue of parity, namely sentencing similarly situated offenders committing similar offences to similar sentences, I note that the “near miss” in diligence in Pacific Gateway resulted in fine of $50,000, and Kiu Yick Trading ’s culpability of “low to moderate” resulted in a fine of $60,000. [ 84 ] Hang Hing has been found to engage in practices which fall closer to the mid-level of culpability, with a greater number of aggravating factors as compared to similarly situated offenders.

It has also accepted responsibility for its compliance failures, made necessary changes, and has been transparent as to its financial history. [ 85 ] In my judgment, balancing all relevant factors in this case, a sentence which deters and denounces the unlawful trade in protected shark species and makes such conduct unprofitable is a fine of $75,000.00 under count 1, to be paid by Hang Hing Herbal Medicine Ltd. to the Receiver General of Canada in trust to the Environmental Damages Fund, pursuant to

section 22.11 of WAPPRIITA . [ 86 ] I have taken into account the downturn in business due to the Covid-19 pandemic. In comparison to Kiu Yick Trading, which was sentenced in May 2021 during the pandemic, the financial health of Hang Hing prior to the pandemic was more robust. Hang Hing’s gross revenues appear to be six times greater (over $2 million vs $300,000 for Kiu Yick Trading), and net profits three-fold higher ($69,160 in 2017 vs $25,000). Hang Hing has a healthy retained earnings balance, being the portion of a company's cumulative profit that is held or retained and saved for future use.

In 2017, its retained earnings were $310,383. [ 87 ] Given its pre-pandemic financial standing, I find that Hang Hing will not be decimated if given time to pay the fine.

Hang Hing Herbal Medicine Ltd. shall pay the $75,000.00 fine in eight equal instalments, the first payable on or before December 31, 2022 and thereafter before the end of each consecutive calendar year until paid in full. [ 88 ] This court further orders, pursuant to section 19(1) of WAPPRIITA , that the offence related property, consisting of 22 bags of shark fins seized and detained by Environment and Climate Change Canada on October 6, 2017, is to be forfeited to Her Majesty the Queen in right of Canada. _____________________________ The Honourable Judge H. K. Dhillon Provincial Court of British Columbia