Guatemala: Rise in Smuggled Footwear

The devaluation of the Mexican peso could be one of the reasons behind the increase in the illegal entry of footwear from that country into Guatemala.

Wednesday, August 10, 2016

The effect of shoe smuggling across the border with Mexico is added to footwear imports from Asia, which despite paying the corresponding duties and taxes are, "... still priced below those of the local market" said Bayron Almorza, president of the Union of Footwear attached to the Chamber of Industry of Guatemala, to Prensalibre.com.

See also: "Contraband Continues to Afflict Companies in Guatemala"

Footwear smuggling seems to be getting worse every year. In 2015 industry representatives denounced triangulation, smuggling, under - invoicing and declaring new footwear as used on products coming from China.

"... They have also detected another method of bringing in new shoes inside the packages that come in bundles from the United States. 'They mix used shoes with new ones, afterwards they sort them out and sell the new shoes with other prices, always in the informal market', explained Almorza."

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Guatemala and Smuggled Footwear

August 2017

Local manufacturers are demanding better controls on the illegal entry of shoes, which on top of the breach in labeling rules by some traders, is harming the sector.

Local shoemakers claim that non-compliance with the labeling standard on shoes sold in some stores results in sales made at very low prices, generating unfair competition, which, combined with smuggling, is having a negative effect on the sector.

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As part of the controls to combat smuggling, between May and July 29 companies were suspended from the list of importers, which represents 60% of the total volume of pairs of shoes entering the country.

In order to detect and prevent irregularities in the import of footwear, the General Administration of Federal Tax Audit Tax Administration Service of Mexico carried out 31 audits "...

Decrease in Footwear Production in Guatemala

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Imports of cheap products and smuggling are major factors in the stagnation of the footwear industry.

According to Irma de Aceituno, an executive at the factory Genesis S.A., another factor that has affected the sector is competition from the informal market, which has led to staff reductions at the plant.

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