A container ship financed by JPMorgan was seized by US customs officials this week after authorities found nearly 18 tons of cocaine with an estimated street value of $1.3 billion on the vessel.
The MSC Gayane is operated by the Switzerland-based Mediterranean Shipping Co., but JPMorgan helped finance MSC’s purchase of the ship. The two reportedly structured the purchase so the ship was owned by client assets in a transportation strategy fund run for JPMorgan’s asset-management arm. The MSC Gayane sailed under the flag of Liberia, a West African country. West Africa is a popular transit route for smugglers between South America and Europe because of its porous borders, weak rule of law, largely unmonitored coastline, and limited infrastructure and resources. The proportion of cocaine seizures in Africa accounted for by West Africa rose to 78% in 2016, “reflecting the rapidly growing importance of West Africa as a transit area,” the UN Office on Drugs and Crime said. Upon application from the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the United States District Court for the Eastern District of Pennsylvania issued a seizure warrant for the vessel.
On Thursday, July 4, CBP executed the warrant and seized the MSC Gayane. CBP has various seizure and forfeiture authorities under Title 19 of the United States Code (USC).