It is well known that drugs, particularly cocaine, transit through Central American nations before reaching Mexican cartels and the lucrative US market.  This report, in todays edition of Mexican newspaper El Universal , shows that Central American nations are also the source and destination of smuggled goods, products which are otherwise legal.  The article investigates how the widespread practice affects the Guatemalan economy and public coffers.  Below is my translation to English.  You can read the original in Spanish here.

The illicit flow of merchandise from Mexico, Belize, El Salvador  Honduras and even Panama is causing an unstoppable draining of the Central American nation’s public coffers.

After a careful investigation, Guatemalan police officers uncovered the contents of two cargo trucks on September 15.  The trucks aroused suspicion because they had been abandoned in the Xelajú Bus Terminal in the western department of Quetzaltenango, Guatemala’s second most important city.  The officers patiently unloaded the goods which had illegally entered Guatemala from Mexico.  They included 627 packs of toilet paper and 587 of corn flour as well as 200 boxes of cooking oil.

Just a week earlier, a Guatemalan man driving a van with 2.4 million illicit cigarettes in 242 boxes hidden in 2 secret compartments was arrested in another police operation in a village in the eastern department of Izabal.  The department is located in the Guatemalan Caribbean area, near where the illegal goods had been picked up.

In the middle of August, two Guatemalan men were arrested in the north of the country bordering Belize for transporting a shipment of more than half a million cigarettes which had been smuggled into the country.

In a daily flow from the borders with Mexico, Belize, El Salvador and Honduras and occasionally from Panama, the contraband of fuel, carbonated water, rice, oils, grease, cigarettes and batteries is flooding Guatemala, creating an annual shortcoming of more than 820 million dollars from the Guatemalan public coffers.

When asked about the issue by El Universal, Guatemalan Police spokesman Pablo Castillo stated that “the business is managed by bands of organized crime”.

He added that “they smuggle groceries, cigarettes and alcohol.  That is what is being constantly seized each day in operations in all the border areas”.

Official illicit trafficking figures released by the Guatemalan Industry Chamber (GIC), one of the most important private sector associations in the country, are shocking.  In a country that has vast and unprotected borders with four countries:

• More than 200 thousand gallons of untaxed petroleum and other fuels, equivalent to 10% of Guatemalan consumption, enter Guatemala every day from Mexico.

• More than one and a half million boxes, with 24 units in each one, of carbonated water comes onto Guatemalan soil each year, predominantly from Mexico but also from El Salvador, Honduras and Belize.

•  Almost 384 thousand quintals of rice, equivalent to 25% of annual Guatemalan production, are brought into Guatemalan territory from Mexico.

• Some 175 million cigarettes – 18% of the local market – from Belize (and from Panama via boat) are injected into the Guatemalan economy each year without paying taxes.  More than 720 thousand boxes of oils and fats – 15% of Guatemalan consumption – are sent every year from Mexico to Guatemala.

• A yet unknown amount of batteries produced in ‘pirate’ factories in Honduras and Guatemala constantly enter the Guatemalan market.

President of the GIC Fernando López asserts that “smuggling negatively affects the competitiveness of Guatemalan companies”.  He added that illicit goods trafficking contributes to a “direct and indirect loss of jobs, takes money away from social programs, increases insecurity and crime, creates risks to public safety with lethal effects and endangers consumers because of the lack of guarantees of the quality of the products”.

Lopez explained that “the phenomenon impacts on Guatemalan industry by aggravating competitive disadvantages against sectors which do not comply with internal regulations, devaluing the image of local brands and causing the loss of market share and profit due to the advance of the ‘black market’.

Industries have called for a strengthening of police and military presence in the four border areas in the face of what they describe as a problem which, according to the GIC ‘ is not just a Guatemalan problem but a worldwide scourge’.

The smuggling of merchandise aggravates the troubled situation of a country which has become a springboard for international drug trafficking as well as a variety of other kinds of organized crime, both national and transnational, which includes businesses as diverse as human trafficking, arms, timber and archeological relics.

The police spokesman explains that “there are groups which are expressly dedicated to smuggling.  Police have broken up 5 to 7 groups in 2014 alone, using scientific and technological methods in order to thwart entire networks”.

With the intention of confronting the criminal chains that control this activity, Guatemalan and El Salvadoran police forces have created what the spokesman describes as binational police.

He stated that “this means that police from both countries have the right of passage 20 kilometers beyond the border in order to be able to carry out routine inspections or to make arrests of people who are trying to smuggle illicit objects into either of the countries”.

However, in what is a sometimes violent mix of drug trafficking and other criminal operations, the illicit flow of fuels, carbonated water, rice, oils and batteries from the four bordering countries  continues to surround Guatemala.