The Scourge of Smuggling

The impact of illicit trade in Guatemala is such that "in the case of the paper industry, smuggling has grown to the point of taking away a portion of the market from companies and 30% of their turnover."

Thursday, November 30, 2017

Guatemalan businessmen say that out of every ten products sold in the country, three are of illegal origin. The impact of illicit trade on business activity can already be seen in the turnover of companies, who are also forced to reduce their employee payrolls.

See: "Contraband Growing in Honduras"

"The president of the Guatemalan Chamber of Food and Beverages (CGAB), Roberto Herrarte, told Elperiodico.com.gt that " ... lack of 'political will' has allowed an increase in the entry of illicit products into Guatemala, products on which taxes are not paid and which do not comply with health permits, and which from here will move on to Honduras and El Salvador."

Enrique Lacs, executive director of the CGAB, indicated that companies have started to dismiss employees because of sales losses associated with contraband.  "If for every Q1 million that a company sells, it generates about 20 jobs, the opposite happens if a sale is made with contraband products." For example, in the case of the paper industry, contraband has grown to the point of taking away a portion of the market from companies and 30% of their turnover. "The costs of the lost percentage can not be borne by the companies, and they are forced to let go of staff," said Lacs."

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More on this topic

Pressure for New Laws to Combat Smuggling

February 2020

Because the current legal framework is ineffective, Guatemalan entrepreneurs in the food sector are asking the government to draft a new law that would criminalize smuggling and also consider it a matter of national security.

Directives of the Guatemalan Chamber of Food and Beverages (CGAB) assure that the current Decree 58-90 "Law Against Fraud and Contraband" is obsolete and does not allow for direct and frontal combat against contraband.

Rebound in Smuggling Forecasted

November 2018

In Guatemala, food and beverage businessmen estimate that product smuggling during the end of 2018 will increase more than reported in previous years.

Complaints by Guatemalan businessmen regarding the illicit marketing of different types of products have been a constant in recent years. Long-standing calculations detail that of every ten products sold in the country, three are of illegal origin.

Smuggling "Hub" in Central America

March 2018

In the view of businessmen in Guatemala, the country has become a connection center for merchandise that is transported illegally from the Colon Free Zone, in Panama, to the Corozal Free Zone, in Belize.

Within the to and fro of contraband products moving from the south of Central America on the route to Mexico, a significant amount stays in Guatemala, where criminal structures are responsible for "marketing" these products throughout the territory.

Unstoppable Smuggling in the Northern Triangle

August 2017

Guatemalan businessmen are demanding stricter laws to combat the illegal entry of goods from Mexico, which are now being sold in El Salvador and Honduras.

Food and beverage companies say that in the municipality of Acajutla, El Salvador, it is possible to buy oil, flour and crackers that were illegally smuggled in from Mexico, first passing through Guatemalan territory, and eventually being sold on Salvadoran soil. 

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