The US' food supply chain should be tightly controlled. Yet smuggled cattle, raised in uncertain circumstances, flow north from the Central American nations of Guatemala, Honduras and Nicaragua to Mexico. Processed by-products from some of these animals are exported abroad to serve international markets, even reaching shelves in the United States. This is all thanks to a complex "cattle laundering" system.
The roar of the 18-wheeler could be heard off in the distance, as it barreled out of the lush green foothills of the Sierra Madre mountain range just after sun down in Mexico’s southern state of Chiapas. The steel gray truck chugged uphill, eventually coming into focus as it snaked around the sculpture of K'inich Janaab Pakal, the most famous Mayan ruler of Palenque, which sits in the center of this roundabout west of downtown.
Unmarked and without the branding of any particular transport company, the truck approached and passed by in less than a minute. Inside, about 25 heads of cattle were on board, standing head to back with barely enough room to move or breathe. Over the next hour, six trucks with a total of at least 150 animals passed through this same thoroughfare that connects this southeast region to various highways leading to all parts of the country.
*This is the third article in a three-part investigative series, looking at how cattle produced in Central America are smuggled into Mexico and laundered in a variety of ways to enter the legal food supply chain before beef products are consumed in both Mexico and the United States. Read the full investigation here.
The cattle’s journey almost certainly began about 200 kilometers south of here, on the border with Guatemala, in the dusty town of Benemérito de las Américas. Sitting on the state of Chiapas’ far eastern reaches, the municipality of under 20,000 people hugs the Usumacinta River.
Here, the winding river acts more like a bridge connecting two countries than a border separating them. Sitting largely unsupervised, there is no formal crossing point, nor are there any 10-foot walls with heavily armed individuals in camouflage patrolling in the distance. Rather, people and goods calmly cross from Guatemala and into Mexico on small boats under the midday sun.
On the Mexican side, a taxi driver helps a family of four load their things into the trunk of the car. Another pick-up truck is backed up to the riverbank, accepting goods from the boat that just arrived. Beside it, a long orange truck has its back eight wheels sunk into the river, preparing for grains to be loaded on board.
Later, dozens of emaciated cattle in poor health will be transported through this same crossing on long, covered wooden canoes. They too will be loaded onto waiting trucks and driven out of town to resting points along Highway 307 leading towards Palenque. On this highway, one is just as likely to be slowed down by the many topes, or speed bumps, that dot the tarmac as you are by a rancher leading a convoy of cattle blocking the two-lane road.
Many, if not all, of these cattle come from Guatemala, Honduras and Nicaragua without the proper ear tags or health documentation needed to be transiting through Mexico legally. But they will have said documents before they reach the first official customs checkpoint manned by the armed forces, hours north of the border.
Cattle Trafficking: An Illicit Market that Thrives with Globalization
Driving along the roads of southeastern Mexico and the Isthmus of Tehuantepec – the narrowest point in Mexico between the Gulf of Mexico and the Pacific Ocean – is to enter a changed landscape where jungle that used to stretch as far as the eye can see has been felled so hundreds upon hundreds of Zebu cattle can graze. The cattle industry has become so important that, in some municipalities, ranchers have considerable influence over local politics, society and the economy.
Made up of the states of Chiapas, Tabasco and Veracruz, this zone is crucial for the 800,000 head of cattle that the Mexican government estimates are smuggled into the country each year. But talking about this illicit market generates fear and mistrust among residents.
"Be very careful when investigating this. It’s very dangerous," a ranching leader in southern Veracruz, who asked to remain anonymous, told InSight Crime.
On the one hand, cattle trafficking is an outgrowth of the organized criminal interests present in this area. Smuggling cattle from Guatemala has provided a golden opportunity for criminal networks to diversify their income, launder money through the buying and selling of cattle, extort money from the transport networks involved, as well as to use the cattle themselves as a means of moving cocaine.
The fear that residents expressed is well-founded. In some cases, local officials who have openly denounced cattle smuggling in this area have been killed.
SEE ALSO: The Secrets of Cattle Smuggling From Guatemala to Veracruz
On the other hand, cattle smuggling is a knock-on effect of the globalization of the beef trade. Following the passage of the North American Free Trade Agreement (NAFTA) in 1994, Mexico's exports of cattle and beef to the United States, and later to other markets, grew. This put pressure on the Mexican supply chain to produce sufficient cattle to meet the international and local demand, which has, in part, been filled by illicitly sourced cattle from Central America.
Guatemala has historically acted as a major centro de acopio, or collection point, for both legal and illegally sourced cattle from Central America that are destined for the Mexican market. But it wasn’t until 2019 that the Mexican and Guatemalan governments officially signed an agreement to formally regulate the entry of cattle.
With these agreements, authorities issued a series of requirements so that Central American cattle could legally move through Mexico. These include, for example, that the animals must come from certified ranches in Guatemala, that they must wear an identification tag with which they are tracked until slaughter, and that they must have all the proper health certificates.
However, the vast majority of cattle arriving into Mexico from Guatemala continue to do so illegally. Guatemalan authorities said that only 7,234 cattle were formally exported in 2021, according to official data obtained by InSight Crime.
Cattle traffickers use informal crossings to sidestep the controls mentioned above and don’t have any official documentation upon entering Mexico. But in order for the cattle to be sold to large producers and meat companies in the country, they need to appear in the national registries. That is, among other requirements, these cattle must have an ear tag that identifies them as being certified in Mexico.
To fill this gap, cattle traffickers seek out the services of black marketeers.
Black-Market Ear Tags to ‘Launder’ Contraband Cattle
The National System of Individual Cattle Identification (Sistema Nacional de Identificación Individual de Ganado - SINIIGA) is in charge of providing ear tags for all cattle in Mexico. Working directly with local cattle rancher’s unions, they sell ear tags to what are called livestock production units (Unidad de Producción Pecuaria - UPP), or properties where ranchers have their cattle registered. Here, only a certified veterinarian can place ear tags on the cattle before they are transferred to collection points to be sold and prepared for slaughter.
The tags carry a unique code with which the animals are registered in the government database, known as the Padrón Ganadero Nacional. Ideally, this record should make it so authorities can track all the places the cattle have transited through from birth to slaughter.
However, in Mexico there is a thriving black market for such identification markers, and local rancher’s unions are largely to blame. Almost all sources consulted by InSight Crime during our investigation on cattle trafficking said that corruption exists within the SINIIGA system, and some officials will sell the ear tags under the table, either directly to traffickers or to other entities involved in the trade.
"They sell the tags under the table [...] someone buys it, they put it on illegal cattle and that's how they try to legalize it," Veracruz state Governor Cuitláhuac García Jiménez told the local press in March 2022.
SEE ALSO: Mexico News and Profiles
There are several ways in which ear tags can be obtained. According to local sources, collection points, such as those along major passageways like Highway 307 connecting Benemérito de las Américas with Palenque, frequently obtain ear tags through their local union and sell them directly to those who bring unmarked cattle to their facilities.
"If the cattle don't have Mexican tags, they sell them to you informally [at the collection centers]," a cattle rancher from Chiapas told InSight Crime. All the ranchers interviewed in this region said the same thing — although federal authorities denied it happened.
Ranchers may also falsify the number of cattle that they own to obtain an excess of ear tags, which they can then sell to those bringing in contraband cattle. In other cases, traffickers can steal the identity of a producer and use it to report a higher number of cattle, and thus obtain corresponding ear tags. The scheme can be applied until the producer files taxes, at which point the tax authorities may note the discrepancy.
In all instances, the black market for ear tags is a lucrative system. While an official ear tag provided by SINIIGA costs between 40 or 50 Mexican pesos (around $2.50), the ones sold in the black market can hover between 400 and 700 pesos ($20 to $35), according to ranchers interviewed in Chiapas and Veracruz. This means that if the 800,000 cattle the Mexican government estimates are smuggled into the country each year obtain ear tags through the black market, the business could be worth as much as $18 million.
Paperwork is also falsified. Several ranchers interviewed by InSight Crime in Veracruz, Chiapas and Tabasco mentioned that transporters, for instance, obtain veterinary certificates attesting that the animal is free of diseases and has the necessary vaccines in order to be moved within Mexico. According to these sources, the certificates are forged with the complicity of veterinarians and authorized laboratories.
Once the cattle have ear tags and health certificates, any record of their true origin disappears. This means that the animals can be slaughtered and packaged for consumption in local markets, or the processed beef can even be exported to international markets like the United States.
“The irony is that everything comes in legally,” a government official in southern Mexico told InSight Crime. “I have no legal argument for rejecting [contraband] cattle. [On paper], there is no legal violation.”
No End in Sight
Combatting this illicit trade is nowhere near the top of the list of priorities for Mexico’s authorities on the Guatemala-Mexico border. The National Guard and Army, for instance, are focused much more on immigration and drug trafficking, though people and drugs still cross. Simply put, both institutions told InSight Crime cattle trafficking was not their responsibility.
SEE ALSO: All About Contraband
When arranging interviews with police forces in the border states, spokespersons mentioned they deal with cattle rustling, but not cattle trafficking. Moreover, while transnational livestock smuggling is considered a tax crime, Mexico's Attorney General’s Office, including its regional offices in the border states, reported no complaints related to cattle smuggling when InSight Crime made an information request.
It’s also unclear to what extent customs agencies are involved in trying to regulate the issue. For instance, Mexico’s Secretary of Finance and Public Credit (Secretaría de Hacienda y Crédito Público – SHCP), which oversees customs, did not report having identified any cases of cattle smuggling from Guatemala.
On the other hand, beyond the corruption within SINIIGA, the system doesn’t appear to have the capacity needed to monitor and check that the reported records match the number of cattle that producers actually have. When InSight Crime visited a SINIIGA office in southern Veracruz, the staff there mentioned that you simply have to “trust what the ranchers report.”
At the federal level, legislators modified in July 2021 the official law that regulates the identification of cattle so that the distribution of ear tags is the sole responsibility of the government, all in an effort to improve oversight. The governor of Veracruz has been one of the most prominent voices in favor of these reforms, arguing that they will help combat cattle smuggling.
Still, it’s not yet clear when these changes will be implemented. And on the ground, the ranchers InSight Crime spoke with remain skeptical.
*This is the third article in a three-part investigative series, looking at how cattle produced in Central America are smuggled into Mexico and laundered in a variety of ways to enter the legal food supply chain before beef products are consumed in both Mexico and the United States. Read the full investigation here.
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