From: The Hill | Congress Blog
By Roger Bate
But while the medicines trade is a problem, illicit tobacco is probably the greater threat, even driving the economies of many free trade zones, and arguably a major part of the entire Paraguay economy. Illicit whites are legally manufactured cigarettes illegally smuggled into myriad markets. For example, dozens of companies in Paraguay produce tens of billions of cigarettes each year. It does not matter how much health advocates decry such action when the President of Paraguay, Horacio Cortes, was the co-founder (and still part owner) of the largest producer, Tabacalera del Este. The vast majority of Paraguay’s cigarettes are smuggled into other nations. Perhaps one third of the cigarettes on sale in Brazil are illicit and most come from Paraguay. My research colleagues found that these products were widely available across the region. The Colon Free Trade zone in Panama is awash in these products, and trade in Belize and Venezuela is also growing.
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Mexican drug cartels, such as Los Zetas and the Sinaloa cartel, have been involved in the distribution of illicit cigarettes. So too have Colombian terror groups, notably the Revolutionary Armed Forces of Colombia (FARC) and the Urabeños, which use illicit tobacco for money laundering purposes. Cigarette trafficking in Brazil may be also linked to criminal groups, such as the Red Command and the First Capital Command, although as is often the case, without greater law enforcement efforts against the trade, it is hard to unearth the exact perpetrators and beneficiaries.
