A Shanghai court has upheld a ruling against a Zespri subsidiary for under-declaration of customs duties on kiwifruit imports, www.bayofplentytimes.co.nz reported.

The ruling upholds a NZ$960,000 (US$760,000) fine against the China-based subsidiary, Zespri Management Consulting Corporation (ZMCC), and a five-year jail term for employee Joseph Yu.

The original ruling, given in March, found underpayment of customs duties from 2008-2010 on New Zealand kiwifruit. The smuggling charges were contested by Zespri, leading up to this week's ruling.

The company had argued that evidence of shipment reconciliation was provided to the company, indicating full payment of duties. The court, however, found the reconciliations irrelevant,  www.bayofplentytimes.co.nz wrote.

Zespri CEO Lain Jager said the company accepted the ruling and would undergo an overhaul of its Chinese operations to avoid further incidents.

"While we are disappointed, Zespri accepts the court's decision and acknowledges Zespri's monitoring of its import arrangements into China between 2008 and 2010 failed to ensure that its import partners were compliant with local customs laws and regulations," Jager said in the New Zealand publication.

"Our biggest concern remains for the welfare of our employee and we will continue to work with his family and legal representation to explore how we can support him personally and legally going forward."

Related stories: Zespri to appeal Shanghai customs case

Zespri found guilty of smuggling by Chinese court

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