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 Panama, a bill proposes reinforcing coercive measures for customs offenses with penalties ranging from $250, to a fine equivalent to the value of the unpaid taxes.
The Ministry of Economy and Finance explained that the bill proposes "to facilitate greater collection, in any of the instances that sanction the crimes of customs fraud and contraband."
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.
Panamanian producers report that every week between 5 thousand and 7 thousand hundredweight of tomatoes enter the country illegally from Costa Rica, in addition to other agricultural products.
Producers in the province of Chiriquí claim that smuggling from the neighboring country is not limited to agricultural products, but also occurs with materials for production.
Through at least 47 clandestine posts on the border between the two countries there is illegal circulation of tomatoes, yams, avocados, plantains and bananas.
Eduardo Carles, Minister of Agricultural Development in Panama, told Prensa.com that, in the case of bananas and plantains,"... producers sell them in Costa Rica when the price falls in the local market ....
The private sector has signalled an increase in seizures of drugs, food, smuggled cigarettes, and consumer products from illegal sources.
From a statement issued by the Chamber of Commerce, Industries and Agriculture of Panama (CCIAP):
The Chamber of Commerce, Industries and Agriculture of Panama (CCIAP) has expressed concern over the increase in illegal trade including smuggling, counterfeiting and piracy.
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 reform aims to add to the Criminal Code offenses of smuggling and customs fraud, among the violations against economic order.
From a statement issued by the National Assembly of Panama:
The full National Assembly approved on its third reading Bill 176 which amends and adds articles to the Penal Code.
The rule is intended to add to the existing Criminal Code the offenses of smuggling and customs fraud within infringements against the economic order, adding a new Chapter.
"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".
A bill has been presented which incorporates the concept of customs fraud and smuggling into the Penal Code and establishes penalties from 5-12 years in prison.
The bill provides various prison terms ranging from 5 to 12 years. Porcell explained that these concepts will be incorporated into the Penal Code and that predicates to money laundering will also be considered as an offence.
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 "...
Producers in the sector are warning about a growth in contraband of agricultural products encouraged by a price differential and lack of border controls.
The border between Costa Rica and Panama, according to producers in the area, has become a corridor for the smuggling of agricultural goods. The large number of border posts (about 80) and the considerable distances, make it very difficult to control the movement of goods.
Products such as coffee, bananas, tomatoes and cucumbers are illegally entering Panama with authorities being unable to stop them.
It is farmers of these products who are complaining about the situation, claiming that there is unfair competition because the merchandise is being sold on the market at much lower prices than the local products.
Coming from Costa Rica is "everything we sow and cultivate both in Baru as well as Renacimiento, and it is sold without any controls on the Panamanian side," said producer Pedro Rodríguez.
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.