Editor’s Note: Volume 1 of The Bureau for International Narcotics and Law Enforcement Affairs’ 2016 International Narcotics Control Strategy Report, “Drug and Chemical Control” is available here and Volume 2, Money Laundering and Financial Crimes is available here. Below are a few brief excerpts from Volume 2
From: United States Department of State, Bureau for International Narcotics and Law Enforcement Affairs
Bahamas
The Commonwealth of the Bahamas is a regional and offshore financial center. The country’s economy is heavily reliant upon tourism, tourism-driven construction, and the offshore financial sector. The Bahamas remains a transit point for illegal drugs bound for the United States and other international markets. The major sources of laundered proceeds are drug trafficking, firearms trafficking, gambling, and human smuggling. There is a black market for smuggled cigarettes and guns. Money laundering trends include the purchase of real estate, large vehicles, boats, and jewelry, as well as the processing of money through a complex web of legitimate businesses and international business companies (IBCs) registered in the offshore financial sector. Drug traffickers and other criminal organizations take advantage of the large number of IBCs and offshore banks registered in the Bahamas to launder significant sums of money.
Canada
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Canada does not have a significant black market for illicit goods. Cigarettes and counterfeit goods and software are the most commonly smuggled goods in the country. There are indications that trade-based money laundering occurs, and underground financial systems are used within the immigrant community. Some human trafficking organizations engage in money laundering. Bulk cash smuggling is widespread.
Paraguay
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Ciudad del Este, on Paraguay’s border with Brazil and Argentina, and nearby Salto del Guairá, and Pedro Juan Caballero represent the heart of Paraguay’s “informal” economy, and trade-based money laundering occurs in the region. The area is well known for arms and narcotics trafficking, document forging, smuggling, counterfeiting, and violations of intellectual property rights, with the illicit proceeds from these crimes a source of laundered funds. Paraguay accounts for over 10 percent of the world’s contraband cigarette trade. There are estimates that up to 90 percent of cigarettes produced in Paraguay, approximately $1 billion worth, is smuggled annually across borders, largely to Brazil, Argentina, and Uruguay. Cigarette smuggling is used for money laundering purposes and the cigarette supply chain enriches criminal organizations and corrupt officials. In the past, terrorist organizations have received some proceeds from these illicit activities.
