On December 15, 2016, Bloomberg News published an article to re-submit the antibiotic residue problem of shrimp to the public. The article reveals the inside story of some transactions: a large number of Chinese-fed “drug-disabled” shrimps are “illegally” sold to the United States via Malaysia.

China's aquaculture production accounts for 60% of the world's total. According to the 2013 report, in the Pearl River Delta region alone, Chinese scholars estimate that there are 193 tons of antibiotics used in the breeding industry every day. Bloomberg said, "The Chinese government is clearly aware that the antibiotic problem is out of control." China has found the highest rate of bacterial resistance in the world, 42-83% of the extended-spectrum β-lactamase produced by drug-resistant bacteria in healthy humans. This substance is capable of decomposing penicillin and its derivatives. Among the aquatic products sampled in Shanghai, 43% of Salmonella have more than two anti-drug resistance genes.

In 2004, the US Department of Commerce launched an “anti-dumping tax” on Chinese aquatic products, and all American shrimps were forced to impose a 112% tax. Since the fall of 2006, the US Food and Drug Administration (FDA) has intensified the inspection of imported aquatic products. Nearly a quarter of the sampled samples have illicit drug residues. Although the source of a large number of unqualified products is marked as Malaysia, the key point of the incident is that the US has mastered the confessions of several involved enterprises, and the Chinese enterprises have become the biggest suspects.

Blue Archipelago, Malaysia's largest aquatic state-owned company, said that in 2015, Malaysia's shrimp production was 32,000 tons, about 18,000 tons were consumed locally, and another 12,000 tons were sold to Singapore. In the same year, the US Department of Agriculture data showed that Malaysia's shrimp exports to the United States exceeded 20,000 tons.

Obviously, not all prawns exported from Malaysia are produced locally. In fact, Malaysia plays the role of “re-export”. A Chinese-American middleman (now sentenced by the US for three years) confessed to the blackout of the transaction: many shrimps were shipped from China, but they were labeled with Malay local production, and then sold to the United States through a US Texas company, American Fisheries. So, it managed to escape the tax of 38 million US dollars. A number of “shell companies” registered in Malaysia are engaged in the import and export of shrimps, just to blind the supervision of the US government. In addition, the case also involved a Chinese state-owned enterprise.

Although the US policy of adding anti-dumping duties to China has been implemented for nine months, in 2005, former senior executives of China's state-owned SOAP Group decided to invest in a new joint venture to focus on the shrimp export business. Guangzhou Lingshan Aquatic Products Co., Ltd. is responsible for the acquisition of packaged shrimp products in the Pearl River Delta region. Although the company had advanced drug testing equipment at the time, many "antibiotic-contaminated" products entered the company's warehouse. Two-thirds of the products were re-exported through Malaysia and taken over by the Texas company to the United States. A former senior executive of Guangzhou Lingshan Aquatic Products revealed to Bloomberg.

How are Chinese products labelled on the Malaysian origin? The article pointed out that the local production certification of Malaysia is issued by the Ministry of Commerce of Penang, Malaysia. Mr. Mohd Noordin Ismail has worked in the Malay Ministry of Commerce for 40 years and Malaysia is responsible for the issuance of export commodities. According to him, the procedure for issuing documents is based solely on the integrity of the company, which is signed and sealed on the assumption that the documents provided by all merchants are authentic. And he himself has not actually done a verification of authenticity.

The article mentioned that the production address of Malaysia's exported aquatic products is also wrong. According to the address provided on the label file, some areas are large residential houses without any breeding ponds or fishing facilities; some addresses marked as shrimp ponds cannot see the water surface image on Google Maps at all.

How did the shrimp product shipped out of Malaysia to the United States? The American Fisheries account book of the Texas company responsible for receiving the goods in the United States did not have a business transaction record with the Malaysian Transportation Company, which denied its illegal re-export of shrimp products from Malaysia. However, the legal documents revealed that the company’s Chinese-born president had sent a cheque to YZ Marine (Malaysia Cargo) privately. American Fisheries acknowledges that its project operating capital is provided by the Chinese. Due to the lack of a legal long-term work visa, the company's Chinese employees only stay in the United States for three months at a time. When the visa is valid, they send new employees from China to the United States to take over their predecessors.

In response to this incident, the Southern Shrimp Alliance, a US shrimp trade organization, commented that the US market is flooded with a variety of counterfeit labels of aquatic products: “Too many channels allow import and export businesses to evade US law regulation, like American Fisheries. This model can be used flexibly, and repackaging the shell company makes it reasonable and legal. Even if all Malaysian exporters are listed on the “warning list”, it will not solve the problem, and expanding the FDA inspectors will not help.”