Given the crisis in the region, businessmen in Guatemala report that smuggling of Mexican products has increased, while in Panama, beer producers attribute the rise in illegal trade in alcoholic beverages to the dry law.
With the spread of Covid-19, governments in Central America have decreed mandatory quarantines and have also restricted the movement of consumers at certain hours.
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.
In Nicaragua domestic cattle producers are being paid better than those in other countries.
"... The plants are paying around US $3.22 per kilo for 'hot' beef while markets such as Brazil, the world's largest exporter, whose meat competes with Nicaragua’s, paid US $2.22 per kilo. That means that Nicaragua is paying about $220 more per head than in those markets, and 45% more per kilo of 'hot' beef relative to the leading exporter of beef in the world ", said Onel Perez, executive director of the Nicaraguan Chamber of Beef Exporting Plants (Canicarne), in an extensive interview with Elnuevodiario.com.ni.
As a measure to discourage smuggling, the taxable limit for withholding income tax on the export of live cattle has been reduced.
The Federation of Livestock Associations of Nicaragua (Faganic) welcomed the decision to reduce the limit for incurring income tax, believing that it will be an incentive to reduce smuggling of cattle and allowing more to be exported through the formal market.
Producers and industrialists in the livestock sector have agreed to work together to reduce smuggling by optimizing controls on the movement of cattle.
The problem of cattle smuggling is an issue that has already been denounced on several occasions , and has now led to industry players coming together to make changes to processes and improve controls. The goal is to minimize smuggling so that industrialists have sufficient supply to give to slaughterhouse and producers get better yields.
It has been indicated that deductions and taxes incurred by coffee farmers is the reason for smuggling of the grain to neighboring countries.
According to an article on Laprensa.hn Emilio Medina, manager of the export company Beneficio de Café Montecristo, "... taxes and deductions applied to each hundredweight of coffee exported combined with low grain prices in the international market have led to increased smuggling of the aromatic to Guatemala and Nicaragua ... This traffic of coffee to neighboring countries has affected the volume of shipments and foreign exchange. "
The commissioning of the plant belonging to the Mexican SuKarne has once again brought to the fore the problem of smuggling of live cattle both to Costa Rica and to Honduras.
An article in Elnuevodiario.com.ni reports that "... Canicarne's executive director, Onel Perez, insisted that the problem of livestock [smuggling] not only affects meat processing plants, but will also have effects on employment in newly set up processing plants, the price of meat for consumers, and livestock taken as a whole. "
"If the calculations made for Guatemala in 2013 and 2014 are taken as a reference for other Central American countries, the volume of illegal trade in the region, could be between 3.4% and 4% of GDP".
"If the calculations made for Guatemala in 2013 and 2014 are taken as a reference for other Central American countries, the volume of illegal trade in the region, could be between 3.4% and 4% of GDP".
The livestock sector attributes the reduction in sales in the first nine months of the year, compared to the same period of 2013, to increased smuggling.
Some 39,800 cattle were exported up to the month of September, according to reports from the Central Bank of Nicaragua. This amount reflects a decline in sales compared to September 2013 when 56,000 heads were exported.
Liquor distribution companies are demanding that the government improve measures to control the illegal entry of spirits, particularly from Nicaragua.
The cost of a box of 24 units of Nicaraguan liquor ranges from $13.50 to $14, while in the Honduran formal market the same amount costs between $19 and $26.50. The obvious difference in prices and growing demand for the product due to the proximity of the holiday seasons are the main factors that contribute to an increase in alcohol smuggling in Honduras at this time of year.
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 "...
Nicaraguan producers are complain that phytosanitary controls applied by the government of Costa Rica have increased the illegal entry of Nicaraguan beans, estimated at $4 million a year.
On average over 160 containers holding 480 pounds of beans each are smuggled to Costa Rica, amounting to approximately $26,000, as "... a result of phytosanitary measures restricting the entry of beans with impurities," say Nicaraguan businessmen.
Central American Business Chambers call for stopping unfair trade in both directions between the two countries.
"We must, as soon as possible, stop the illegal movement of goods from Guatemala to the southern border of Chiapas, in order to be able to aspire to making progress on all our objectives in this new era of trade between Mexico and Central America," said Jose Mejia, president of the Central American Binational Union of Chambers of Commerce, Industry and Investment.