Public Comment Forum

The mass smuggling of cigarettes in Paraguay offers an important lesson for those looking to legalization as a panacea. Even with a product that can be bought legally and just about anywhere, smugglers are ready to cash in on price differences and more than a few smokers are willing to buy from them. A recent State Department report on the global illicit tobacco trade explains how running smokes serves as a gateway drug to more nefarious activities (humans, weapons, drugs, antiquities, diamonds, and counterfeit goods) and is a significant threat to national security. Regardless of what’s being smuggled, authorities on both sides of Latin American borders need to enforce customs controls and stop smuggling to make sure the legal trade, if there is one, doesn’t get undercut.

When revenues (even from legal products like cigarettes) end up in the wrong hands, they can also finance more serious crime, including human trafficking and terrorism. After all, there is no reason for the same criminal organizations running guns, drugs, and people not to diversify to take advantage of low hanging fruit. Mexico is a case in point: while it struggles with drug cartels armed to the teeth with guns they buy in America, the government also has to deal with 340 million packs of contraband cigarettes that cost $70 million in lost taxes every year. The governments of both Guatemala and Panama have alleged the notorious Zetas, one of Mexico’s most powerful cartels, are in on selling “pirate” packs smuggled over the southern border. It’s not just a Latin American affair: even in the US, Mohammed Youssef Hammoud made headlines when the FBI discovered he was financing Hezbollah by pushing cigarettes.