MSC spent “tens of millions” of dollars after MSC Gayane drugs bust

Switzerland-based Shipping company MSC told a court prior to the sentencing of several crew members on a charge of drugs smuggling on the MSC Gayane in 2019 that it had since spent “tens of millions of dollars in making its systems more secure, reported American Shipper.

The cocaine bust on June 17th 2019 was one of the biggest hauls in US history and was part of a plot worthy of a Hollywood movie.

MSC confirmed in a letter to US District Court Judge Harvey Bartle III that it had “suffered significant financial and reputational damage” as a result of the incident.

The consequences included more than $100m in additional security costs.

At the time of the smuggling plot the MSC Gayane was new, big and expensive. The 2018-built container ship had a capacity of 11,600 teus.

US authorities, acting on information provided, invaded the ship en masse in Philadelphia and discovered nearly 20 tons of cocaine, hidden in seven shipping containers.

Of the ship’s crew of just over 20, at least eight  were involved according to prosecutors. Four crew members from Montenegro led the operation. They had taken jobs on the ship intending to smuggle cocaine. They recruited at least four other crew members.

The container vessel had left its previous port “clean”. However, speedboats met the MSC Gayane at night off South America, on multiple occasions.

“Crew members used the vessel’s crane to hoist cargo nets full of cocaine onto the vessel and then stashed the cocaine in the vessel’s shipping containers. After hiding cocaine among legitimate cargo, the crew members used fake seals to reseal the containers”, a prosecutor said during the trial.

Three co-conspirators have pleaded guilty. A fourth, Vladimir Penda, who was found guilty was sentenced last week to 70 months in jail.

MSC filed its letter in preparation for Penda’s hearing

MSC told the judge that it although had robust anti-smuggling procedures in place for years before the MSC Gayane incident, since then it had made big changes since then. “Over the past two years since the MSC Gayane seizure, MSC has spent tens of millions of dollars to enhance its anti-smuggling procedures,” it said, adding that it had  “expanded deployment on MSC vessels of teams of security guards and CCTV cameras monitored remotely in real time by third-party security specialists.”

Canine units and diver-team inspections are now routine, particularly in higher-risk areas like South America.

MSC told the judge that MSC was  pushing ahead with “expedited development and rollout of smart containers that can sense and issue an alert if someone breaches or tampers with the container”.

In total, MSC’s post-Gayane security enhancements were projected to cost more than $100m from 2019 through 2024, MSC said.

As a result of the June 2019 discovery  MSC was suspended for 90 days from the Customs and Border Protection (CBP) “trusted trader” C-TPAT programme.

The US government also targeted the MSC Gayane with a forfeiture action. MSC placed $10m in a CBP security account and provided CBP with a $40m surety bond in order to release the ship, as well as agreeing to:

  • disclose everything it knew about any criminal conduct of its employees related to the smuggling incident;
  • facilitate any interviews with MSC employees by US authorities;
  • and assist with serving subpoenas on any MSC employees inside or outside the US.

MSC told the judge in its new filing, “Given all of MSC’s efforts to … prevent drug smuggling, you will understand how distressed and upset all of MSC’s 27,000-plus employees and crew are – and also, in particular, the [Aponte] family that continues to own MSC – to have their over 50 years of work building the company … undermined by the criminal conspiracy. The MSC Gayane incident is an unwanted and undeserved stain on their record”, the company said.