The National Customs Authority of Panama confirmed that they are investigating several companies in that country dedicated to distributing their goods in small percentages to other smaller companies in order to dilute their cigarette loads and be able to more easily smuggle cigarettes to several countries in the region, including Costa Rica.
The Columbus Free Zone is the epicentre of this criminal network that currently occupies the authorities of that country and has negative effects on ours, because shipments of cigarettes without control continue to enter the national territory and much less with documentation that supports its sale, so they evade the tax office with billions of billions.
The Panamanian government recognized to Crhoy that its Achilles heel in recent years is the terrible control that has existed of this important container entry point into its country and as a result the illegal burdens begin to move easily to the region, Costa Rica being one of the most affected nations.
In the Free Zone there is a very special phenomenon, because a container is introduced, it reaches company A, but that makes a 50% transfer of the merchandise to a company B, and that B takes 50% of its share and moves it to a company C, D and F, giving 100 cigarette pacas to each, and so it is diluted. This is what we call in Panama a web or an octopus, up to 20 arms or companies are detached from their heads, we have to look in the end where everything comes, when we detect the contraband those goods have a manufacturing code and that’s where we realize the beginning or where it came from. We give the relevant alerts to the Costa Rican authorities and they do their job, explained Reynaldo Javier Bello Méndez, Deputy General Logistics Director of the National Customs Authority of Panama, in an interview with this media.
The hierarch confirmed that there are three companies with posts in the Free Zone that would be carrying out the degree of containers in order to be able to mobilize it more easily to our country.
Crhoy visited the wineries that are registered in the name of these societies, one of them effectively has a space in that deposit, however, it is small and unsided. According to Customs records, and intelligence work carried out by this unit, this company has made up to two or three different companies that import the same profile of goods and are domiciled in the same cellar of the Free Zone.
We found that there were also no people working on a schedule in which common operations are usually maintained, as was the case in neighbouring wineries. On that site you could see a lot of white boxes without stamps, but it is unknown whether they were cigarettes or other products, however, in theory this company that has an oriental name is almost only dedicated to that business.
Even in Customs documentation to which this medium had access, it was confirmed that they report the import of containers of cosmetics, shoes and other small items, to disguise the entry of cigarettes, or legally put them in and then distribute them in small quantities to the other companies so that they can be dissolved and the traceability of the merchandise is lost. This is how the pacas finally reach the 20 organizations that operate in the city of Columbus that are in charge of sending the cigarettes to Costa Rica through their criminal allies.
In order to reach the second winery, it was necessary to enter for a second security check, so it was only possible to verify the existence of the premises from the distance, but not the operation and size of it.
A third that is in the eye of the authorities, not only Panamanians, but also Colombia and Ecuador, of Korean origin, is one of the most imposing in terms of the physical structure and state of the site.
Bello explained that the engine of this type of irregularities is corruption in the controllers, as when they assumed they detected officials who for a long time been collaborating with the organizations, even some of these investigations ended with detained officials.
Mauricio Boraschi, deputy prosecutor of the Attorney General’s Office, confirmed that groups that mobilize tons of cocaine have no hesitation in doing the same with cigarettes because they also leave them millions of profits with lower risks.
Is it a product for which products are easily falsified, documentation is falsified that supports licit imports and that can move it without the same fear as moving cocaine. It is placed very quickly on the market and generates profits of up to 100% more than its original value, because they evade tax burdens and manage to sell them at cheaper prices than the licit ones, he explained.
We request an interview with Melissa Rodriguez, current director of the Fiscal Control Police (PCF) a.i. in the country, to learn about the approach being given to the issue in the country, however, since October 25, the press office of the Ministry of Finance notified before our request that it was being managed, without the fact that the space for consultations has been provided to date.
Low penalties and high gains
The deputy director of Customs of Panama said that another aspect that encourages these criminals are the low and sometimes practically non-existent sanctions, since the groups take advantage of these benefits to continue to commit crimes and even include people who do not have interference in the operation, such as the secretaries of their offices, to admit that they have been wrong in the documentation and only pay a fine.
That’s daily bread. The Customs Penal Law currently considers as serious a lack of the fact that a company declares that it carries 2,000 bicycles when what actually comes in the container is 2,000 cigarette pacas. When they go through the scanner, specialists detect that other undeclared products are coming, we stop it, we establish a process and the company defends itself by saying that there was an error in the documentation and the only penalty is $500 for a serious misdemeanour. In many cases we detect that and alert the country of destination for the authorities of that country to stop those future departures, while changing the law that seeks to establish arrest when it can be established that it is with care,” he said.
Under this legal shield, companies continue to import cigarettes from different Asian countries, among which are mainly some in the Middle East. The most confiscated brands are Alzhaimer (the most popular brand today), Elephant, Gold City and Gold Star in different varieties, of which only last September 1700 pacas with a value of $1.7 million was confiscated in a shipment that arrived in Panama and was preparing to be distributed in small quantities.
They don’t stop, they don’t expect a change of government to work, organized crime has found in the smuggling of cigarettes more production than in cocaine trafficking, so much so that when I was as director in Colón we detected 15 gangs of local smugglers and they told us when we stopped them that they stopped drug trafficking to do it with cigarettes, because they pay a fine and with that they avoid going to jail or take a short time to stop,” Bello explained.
Last July crhoy was in Bogotá, Guayaquil and Quito to delve into details about the business that transnational structures have in South America to mobilize goods that pass through Costa Rica.
One of these is the Gulf Clan, which dominates with a large presence of armed groups the Gulf of Urabá in Colombia and this makes it easier for them to dominate the custody of the product in several areas that have exit to the Atlantic with important accesses such as Puerto Turbo.
Costa Rica has identified that many of these bands have ramifications in our country, in addition to other local bands that use the same model of import of cigarettes using the narco platform.
Alejandro Arias Monge, alias Diablo, currently a fugitive from justice, would be one of these that allegedly through alliances with criminal groups in the province of Columbus, Panama imports smuggled cigarettes.
File 21-000115-0622-PE, known as the Colorado Case, where relatives and trusted people are investigated by Arias, mentions in reports filed by the Prosecutor’s Office that the structure uses the placement of smuggled cigarettes in Pococí businesses.
More taxes?
Cigaro decommissioned in July 2024 in the South Zone. Photos: MSPs
A bill is currently being valued in the Legislative Assembly to lower the consumption of cigarettes, proposed by Congressman Gilbert Jiménez de Liberación Nacional (PLN).
This is file 23,880 that seeks to establish a new tax on the boxes, increasing the current price by 30%.
The deputy said they seek to discourage consumption and grant resources to the Costa Rican Social Security Fund, the Ministry of Health, Institute on Alcoholism and Drug Dependence and the Costa Rican Institute of Sport, as well as to add among the beneficiaries to the Institute of Rural Development and Finance.
However, Ricardo Carvajal, director of the Observatory of Illicit Trade (OBCI), of the Costa Rican Chamber of Commerce, explained that this initiative would aggravate the problem, as people would not quit smoking, but consume illicit products.
Do you have very good intentions to reduce tobacco use because of the health consequences, but the fact that the price of this product rises is an incentive for the marketing of products irregularly, if already deporsi is a highly regulated product, increasing taxes would only stimulate smuggling. When people find that the prices of illicit cigarettes are lower they will prefer to buy these and this will increase the profits to organized crime and exacerbate the problem of insecurity , Carvajal explained.
Ecuador implemented the measure of gradually raising taxes for nine years, reaching a price 150% higher than that before the variation.
The Chamber of Industries and Production of Ecuador (CIP) agreed that this is a door open to smuggling, proof of which is that in that country the consumption of illegal products increased from 15% in 2015 to 85% last year after the variation in taxes.
“Definitely, increasing taxes on this product is not a solution, we can see that by making the product more expensive consumers look for cheaper options and that causes smuggling to grow,” said Pablo Jiménez, vice president of the CIP in an interview with crhoy.
This article was translated after originally appearing in crhoy.com