HomeNewsBriefReport Documents Explosive Growth in Chile Contraband Cigarette Trade
BRIEF

Report Documents Explosive Growth in Chile Contraband Cigarette Trade

CHILE / 12 MAY 2017 BY LEONARDO GOI EN

A new report indicates that Chile's contraband cigarette trade has increased exponentially during the past five years, a reminder of how profitable the illegal industry is for organized crime groups.

The amount of illegal cigarettes traded in Chile has increased by 386 percent since 2012, according to a report by the Observatory on Illicit Trade (Observatorio del Comercio Ilícito - OCI), which is part of Chile's National Chamber of Commerce, Services and Tourism.

By the end of 2016, the study estimated that 15.4 percent of all cigarettes in Chile were illegal, and that the illicit trade resulted in over $290 million in lost tax revenue every year.

Santiago is home to an estimated 15 percent of all illegal cigarettes in the country, but cities in the north are also centers for contraband. For instance, in the port of Arica, the OCI report estimates that 84.1 percent of all traded cigarettes are of illicit origen.

Not only does the unlawful trade represent a threat to legal businesses, it also appears to be linked to sophisticated criminal networks.

"We are worried about the way in which these products enter our country, which is through contraband ... a phenomenon directly linked with the financing of terrorism," said OCI representative Jorge Lee in comments reported by BioBio.

Indeed, the illegal cigarettes trade "very often constitutes the last step in the chain of transnational criminal networks," Lee added.

An estimated 78 percent of all illegal cigarettes in Chile come from three brands: Fox, based in Paraguay; Pine, based in South Korea; and Jaisalmer, based in India.  

InSight Crime Analysis

Cigarette contraband may not be as notorious as other criminal activities, but it does represent an enormous revenue source for organized crime in Latin America. According to estimates cited in 2014 by the US military publication Diálogo, the illicit cigarette trade combined with the trade in contraband alcohol could be worth billions of dollars per year for regional crime groups.

In addition, the fact that Paraguay accounts for so many of the illegal cigarettes traded in Chile is not surprising. As InSight Crime has previously noted, Paraguayan contraband cigarettes have been a key revenue source for organized crime groups across the region.

SEE ALSO: Coverage of Contraband

In Mexico, for instance, black market cigarettes from Paraguay have been financing criminal groups like the Zetas and the Sinaloa Cartel. In Colombia, the illicit tobacco trade has reportedly been used to launder drug money by the 59th and 19th Fronts of the Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia - FARC) as well as by a criminal group led by Marcos Figueroa, alias "Marquitos," who is now believed to be part of the Urabeños criminal organization. 

share icon icon icon

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

What are your thoughts? Click here to send InSight Crime your comments.

We encourage readers to copy and distribute our work for non-commercial purposes, with attribution to InSight Crime in the byline and links to the original at both the top and bottom of the article. Check the Creative Commons website for more details of how to share our work, and please send us an email if you use an article.

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

Related Content

COLOMBIA / 22 MAR 2013

Colombian police have seized over $1 million worth of contraband cigarettes and alcohol, breaking up a smuggling operation of the…

BOLIVIA / 22 JUL 2021

A recent clash between soldiers and smugglers has pointed to how Bolivia’s trade in contraband has reached a flashpoint.

CHILE / 1 JUL 2013

The recent seizure of nearly 26 kilos of marijuana brings total Chilean drug seizures to more than eight tons in…

About InSight Crime

THE ORGANIZATION

Venezuela's Cocaine Revolution Met With Uproar

6 MAY 2022

On May 4, InSight Crime launched its latest investigation, Venezuela’s Cocaine Revolution¸ accompanied by a virtual panel on its findings. The takeaways from this three-year effort, including the fact that Venezuela…

THE ORGANIZATION

Venezuela Drug Trafficking Investigation and InDepth Gender Coverage

29 APR 2022

On May 4, InSight Crime will be publishing The Cocaine Revolution in Venezuela, a groundbreaking investigation into how the Venezuelan government regulates the cocaine trade in the country. An accompanying event,…

THE ORGANIZATION

InDepth Coverage of Juan Orlando Hernández

22 APR 2022

Ever since Juan Orlando Hernández was elected president of Honduras in 2014, InSight Crime has provided coverage of every twist and turn during his rollercoaster time in office, amid growing…

THE ORGANIZATION

Venezuela's Cocaine Revolution

15 APR 2022

On May 4th, InSight Crime will publish a groundbreaking investigation on drug trafficking in Venezuela. A product of three years of field research across the country, the study uncovers cocaine production in…

LA ORGANIZACIÓN

Widespread Coverage of InSight Crime MS13 Investigation

8 APR 2022

In a joint investigation with La Prensa Gráfica, InSight Crime recently revealed that four of the MS13’s foremost leaders had been quietly released from…