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.
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,"...
Rice, vegetable oil, liquor, eggs, sugar and cement make up the bulk of the products in the list of goods most affected by illegal trade in the country.
From a statement issued by the Chamber of Industry in Guatemala:
Guatemala, July 19 2016. - The Chamber of Industry in Guatemala has revealed, as it has done repeatedly over the past twenty years, the situation of Contraband and Customs Fraud in the country, and this morning presented to the media the alarming statistics representing losses caused by this scourge in Guatemala.
As expected after any government intervention in a market, the price consumers pay for the product has increased and a black market has been created, encouraging smuggling.
And the Costa Rican State itself risks having to pay millions in compensation for convictions for failing to comply with the procedures established by the WTO after blocking imports of avocados from Mexico.
It has been announced a tender will be launched in April for an electronic system to check containers.
After several failed attempts, it has now been announced the tender to install a tracking system to track and monitor the location of containers in Guatemala will be held no later than April, according to the Superintendent of Tax Administration, Francisco Solórzano Foppa.
Businesses are asking the Executive to reactivate the National Commission against Smuggling to protect issues such as competitiveness, intellectual property rights and the rights of consumers and entrepreneurs.
When the criminal customs fraud structure in Guatemala known as La Linea fell, the National Commission Against Contraband (Conacon) ceased to be operational.
Companies have to allocate up to 15% of expenses to security services, as a result of the growing violence in the country.
A company wishing to operate in Guatemala has to allocate between 8 to 15% of its expenses to security in order to keep operating. The figure was provided by Victor Guillen, manager of purchases, imports and exports at Dagas, and published by Elperiodico.com.gt, who revealed that his company earmarked Q250 thousand ($32,000) per month for the security of its plants, trucks and workers.
The Executive Directorate of Revenue in Honduras is putting out to tender the implementation in Tegucigalpa of a control and monitoring center.
Honduras Government Purchase DEI-BID-LPI-063-2015:
"Description of the Sub Systems:
-Infrastructure Support: Relates to conditioning of the site, wall cladding, false ceilings and floors, LED lighting, air conditioning, common telecommunications infrastructure, furniture equipment for use by technical staff, etc.)
Agricultural production in Mexico is favored by the devaluation of the peso, which has encouraged smuggling to Guatemala of pork products, coffee, poultry and eggs.
The union of entrepreneurs in the agricultural and livestock sector is claiming that it is now not only pork which is being traded illegally on the border, but other products such as coffee, eggs and poultry.
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.
The producers union has estimated the number of pigs per month which are smuggled illegally from Mexico at 2500, causing losses of $15 million a year.
The Association of Pork Producers of Guatemala (APOGUA) states that the annual pork sales total $323 million, but could be more if it were possible to minimize the illicit flow of pork from Mexico.
Elperiodico.com.gt reports that "...Despite performing surveillance on the border with Mexico to stop and report the crime, it is estimated that in one month about 2500 pigs are able to enter from Mexican territory. According to the general manager APOGUA, Carlos Zuastegui, so far in 2015 that 8400 pounds of pig meat have been seized."
The new law lowers from $50,000 to $5,000 the minimum amount of goods in infraction, for it to be considered as a crime of smuggling.
The Legislature approved the bill which sanctions with penalties smuggled goods worth over $5000. The new law also provides for penalties against "split smuggling", made by the same group or individual.
"... The reform proposes that when different entries are reported for amounts less than the $10,000, but which added together exceed that figure, they will be considered a violation of the law, regardless of whether the entry is of different products or money. Prison sentences and fines will be toughened and repeat smugglers could be punished with 3-10 years in prison, depending on the offense. "
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.
The Smuggling law approved on its first reading includes penalties of 3-10 years in prison for those who illegally sell goods infringing animal, human or plant health.
From a statement issued by the Costa Rican Union of Chambers and Associations of Private Business Sector (UCCAEP):
UCCAEP celebrates approval of project to improve anti-smuggling
Business sector considers it a step towards the promotion of formality.
In Honduras shortages caused by cattle smuggling and uncontrolled exports to Guatemala and Mexico have forced the closure of a plant which in 2014 exported $37 million worth of meat products.
The company Carnes y Derivados SA de CV decided to stop operating the plant that operated in Catacamas, Olancho province, mainly due to the shortage of cattle which is affecting agribusinesses in the country.
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