The Colombian border town of Cucuta has smuggling coursing through its veins, underpinning its economy and strengthening organized crime, which is raking in millions from everything from beef to gasoline.
The city streets are lined with shacks where vendors siphon out the fuel from Venezuelan pickups and decant it into Colombian cars; restaurants serve Venezuelan beef that crossed the border stuffed into stripped-out cars; pharmacies sell out-of-date and damaged Venezuelan painkillers; and the marketplace hosts block after block of stalls offering everything from toothpaste to toilet cleaner that has been smuggled in from across the border.
“In Cucuta, people don’t see contraband as a crime, they see it as a way of life, a way of getting by, of doing business and generating employment,” the head of the Cucuta Tax and Customs Police (POLFA), Lt Coronel Rodolfo Carrero, told InSight Crime.
But while the contraband trade has colonized Cucuta, its impact is not limited to the city. Smuggling in the border region is creating mass shortages of essential goods in Venezuela and undercutting legal businesses in Colombia. It is also creating new contraband mafias, fuelling violence between organized crime networks and facilitating the regional cocaine trade.
21st Century Socialism to 21st Century Smuggling
As in many Latin American border towns, Cucuta has a long history of contraband smuggling. But the current boom is a direct result of the economic policies of the Venezuelan government, whose attempts to tackle poverty and control the country’s economy have fed the profits of the smugglers.
Subsidies and price controls designed to ensure access to staple goods and protect consumers from the effects of runaway inflation have instead created a huge disparity in the prices with Venezuela’s free market neighbor, giving smugglers an irresistible economic incentive.
The profits on offer from this price gap are magnified by the exchange rate imposed by the Venezuelan government. Venezuelan Bolivares can officially be traded at 6.3, 10.5 and 50 to the dollar, depending on who is buying what. But in Cucuta, 2,000 Colombian pesos — roughly one dollar — buys 89 Bolivares.
The result, say the POLFA, is that smugglers pay Venezuelan contacts two or three times the retail price for products, sell them in Colombia for five or six times their original price and still easily undercut legal businesses in Colombia.
SEE ALSO: Colombia News and Profiles
“These people are doing double damage,” Juan Camilo Nariño, the vice president of commerce at the National Association of Colombian Businessmen (ANDI), told InSight Crime. “They are damaging the Venezuelan government and people and they are damaging the productive sector of the Colombian people, and it all comes from these subsidies and the enormous exchange rate differences.”
The Smuggling Mafia
Low-level smugglers use what police call the “smurfing” technique, carrying small amounts of goods across the border, but making up to 20 trips a day. There is little police can do but wave them through as the administrative cost of making a seizure dwarfs the value of what the “smurfs” are carrying.
However, while smurfing may be the most common form of smuggling, it is not the authorities’ biggest concern. The POLFA say they have indentified five specialist smuggling networks operating in and around Cucuta, which are transporting and distributing huge quantities of contraband goods across Colombia.
“These groups are mafias, which are dedicated to a criminal economy and to money laundering,” said Lt Coronel Carrero.
These operations begin with a phone call from Venezuela, where smugglers assemble bulk shipments of goods, either by making many small purchases, or getting businesses to quietly set aside the merchandise.
SEE ALSO: Venezuela News and Profiles
To move their loads into Colombia, the smugglers use clandestine border crossings — narrow dirt tracks of mud and sand that wind their way towards the Tachira River, which marks the border between the two countries. At the river, poles topped by fluttering plastic bags mark the shallowest points where it is safe to cross.
Once in Colombia, many of the products are sold on in Cucuta, but others find their way to cities along the Caribbean coast or deep into the country’s interior. Before they are shipped on, many goods are wrapped in Colombian packaging, and disguised with legal invoices purchased from corrupt contacts in legitimate businesses.
The POLFA and other authorities tasked with tackling the trade are now playing catch-up with these sophisticated networks.
Over the last year, they have stepped up their efforts against contraband smuggling in the region, with notable results. By mid-September, the POLFA in Cucuta had seized over $5.1 million worth of contraband — 32 percent more than in all of 2013.
As indicated in the chart below, the most commonly seized contraband items in 2013 and 2014 include clothing, medication, and meat.
The police patrol the clandestine border crossings on dirt bikes, typically accompanied by a truck, acting on tip-offs and relying on speed and surprise to snare smugglers. However, the odds are against them and their seizures are just a fraction of what makes it through.
Around Cucuta, there are 35 trails — that the police are aware of — and they are watched over by the smugglers’ intelligence networks: men on motorbikes known as “moscas” (flies), who monitor police movements and are in constant communication with those driving vehicles loaded with contraband
The police count on the fact that once on the narrow trails, it is usually impossible for the smugglers to turn around. However, each route has its own hiding places – including nearby ranches and farms — where the owners are paid off in exchange for letting the smugglers park their vehicles on the property, hiding out from police patrols.
When police do make a seizure, they can confiscate the goods and sometimes the vehicles, but almost always have to let the smugglers walk. Under Colombia’s current laws, if smugglers are carrying goods worth less than $14,000 (except in the case of gasoline), then they cannot be prosecuted. The smugglers, aware of the law, will rarely carry anything over the limit.
“We can’t stop this,” one POLFA officer told InSight Crime while out on patrol. “All we can do is try to make sure it is not out of control.”
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Big Profits, Big Time Criminals
The huge profits the contraband mafias are raking in have inevitably caught the attentions of the overseers of the Colombian underworld — the criminal-paramilitary hybrids known as the BACRIM (from the Spanish abbreviation for “criminal bands”).
According to the POLFA, the BACRIM control smuggling routes in and around Cucuta, charging smugglers their own import “taxes” on anyone moving contraband.
The region has long been a stronghold for the Rastrojos criminal network, which despite having suffered some major blows in recent years remains strong in Cucuta, according to police. However, since 2011, Colombia’s most powerful BACRIM, the Urabeños, have made a violent attempt to take control of Cucuta and the surrounding region, leaving a trail of dead in their wake.
“Contraband was one of the principal reasons for [the Urabeños] coming here and trying to take over,” said Lt Coronel Carrero. “The business is so lucrative that these bands are fighting and disputing territory with the aim of winning control of contraband as well as drug trafficking routes.”
SEE ALSO: Urabeños News and Profile
Both the Urabeños and the Rastrojos operate on both sides of the border, using Venezuela to hide from the Colombian authorities, according to Lt Coronel Carrero.
Police believe the region’s biggest cocaine kingpin, Victor Ramon Navarro Serrano, alias “Megateo,” the leader of a criminal group descended from demobilized guerrillas, is also capitalizing on the contraband trade.
Intelligence reports indicate that not only is Megateo importing contraband gasoline for cocaine processing, he is also paid for drug shipments in Venezuelan contraband, helping him to quickly and easily launder drug proceeds by converting them into almost untraceable pesos.
As with any multi-million dollar criminal business in Colombia, the Cucuta contraband trade has also been facilitated by official corruption.
In an attempt to clean up the force, the POLFA have introduced confidence tests for officers, meet with internal affairs monthly and, critically, have started rotating staff and removing officers with local ties. (Below, police in Cucuta inspect a seizure of medications).
“The police that used to work here had lived alongside contraband, they had grown up with contraband, their dad or their mom or some family member, directly or indirectly, had something to do with contraband,” said Lt Coronel Carrero.
Venezuela has also begun to take steps to tackle corruption in the Bolivarian National Guard (GNB), which monitors the border. In August, Venezuelan authorities even arrested 15 guards in the neighboring state of Tachira and accused them of repairing a smuggling trail after it had been destroyed.
However, while high-ranking Colombian officials would not comment on corruption in the GNB except to note Venezuela’s recent efforts, on the ground both Colombian police and locals still see the GNB as wild cards: unpredictable, corrupt and with little regard for the law.
On one smuggling trail, InSight Crime saw a burned-out car riddled with bullet holes in the wheels and engine. The work of the GNB, the police said, and a common sight during their patrols.
“There’s just no talking to those guys,” the owner of the car said when InSight Crime asked him why the GNB had opened fire on the empty vehicle.
Despite the ongoing concerns over the GNB, Venezuela now certainly appears to be taking the issue of contraband seriously, especially as popular discontent with widespread shortages in the shops grows.
President Nicolas Maduro has put aside his often antagonistic relationship with Colombia to call for increased cooperation on anti-smuggling operations, and Colombian officials speak highly of the improved relationship.
In August, Venezuela began closing the border between 10 pm to 5 am. Although it is a temporary measure, both the Colombian authorities and residents say this has been an effective — but controversial – move.
Police point to statistics suggesting a sharp fall in the amount of contraband crossing the border, accounted for by a drop in “smurfing.” But residents point to vacant shops and closing businesses as evidence of the impact.
This paradox — where success against contraband smuggling hurts the city’s residents far more than criminal networks — is a cause of concern to the authorities and a source of anger among residents.
“They are taking food from us, from our families,” one man told InSight Crime after police confiscated the sacks of oranges he was smuggling. “This doesn’t do any harm to the country. It’s fruit, it’s not like carrying a kilo of drugs.”
The local government is already working on a “Plan B” to bring residents that live off contraband into the legal economy. Their first program targets the streetside gasoline vendors known as “pimpineros,” offering them training, start-up loans and seed capital to start new legal businesses. Meanwhile, police are hoping a new anti-contraband law currently making its way through Congress will give them the powers to go after the serious criminals.
However, attempts to take down the contraband mafias are already running into the same wall as the fight against drug trafficking — while the profits are there, then it does not matter how many arrests they make, or how many networks they dismantle, the trade continues.
“You capture some, and others are still there, and so it goes on,” said Lt Coronel Carrero.
This article is the first in a four-part series looking at the contraband trade in Colombia. Read part two, on how contraband politics took over northeast Colombia; part three, which looks at how police confront the smugglers’ so-called “caravans of death,” and part four, which traces how contraband became Colombian organized crime’s tool of choice for laundering money.
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