HomeNewsBriefParaguay Contraband an ‘Uncontainable Avalanche’ Spurred by Corruption
BRIEF

Paraguay Contraband an 'Uncontainable Avalanche' Spurred by Corruption

ARGENTINA / 26 SEP 2014 BY MARGUERITE CAWLEY EN

Official corruption is facilitating Paraguay's contraband trade, particularly near the Triple Frontier with Brazil and Argentina -- a hot spot for the illicit movement of products ranging from food to stolen cars and a center for money laundering.

Paraguay's vice minister of industry, Pablo Cuevas, recently called the movement of contraband in Paraguay an "uncontainable avalanche," and complained that the bodies responsible for addressing it were under-resourced. 

However, the business is also run with the complicity of tax and customs officials, who ensure that contraband shipments cross borders with no problems, according to ABC. In one recent case, evidence indicates customs officials allowed a truck loaded with 50 tons of sugar from Argentina to pass freely through controls on its way to Asuncion, and that police who later gave chase to the vehicle allowed those responsible for the shipment to escape, reported ABC

The Parana River -- which runs down from Brazil, along the eastern border with Paraguay and into Argentina -- is an important hub for the trade. Clandestine ports are located along it, while food products are also brought across the land bridge connecting Foz de Iguazu in Brazil with Ciudad del Este, Paraguay.

Items from Argentina are carried up the Parana River to the Triple Frontier, as well as crossing the border at a port on the Paraguay River that connects to Asuncion, reported EFE.

Paraguayan officials are also investigating 70 vehicles thought to have been stolen in Argentina and Brazil and trafficked into Paraguay.

Meanwhile, Paraguay sends numerous clandestine shipments of electronics -- flown in from China -- and cigarettes by river into Brazil and Argentina.

InSight Crime Analysis

According to Paraguay's Ministry of Industry and Commerce, the country loses some $100 million each year to contraband. Ciudad del Este has long been a hub for contraband and counterfeit goods, as well as illegal drugs. The most recent reports underscore how this is facilitated by a culture of corruption, in a region where police have been accused of extortion, the navy of allowing clandestine ports to operate, and the region's judges of favoring drug traffickers. The local government is also under investigation for corruption

SEE ALSO: Coverage of Paraguay

InSight Crime visited Ciudad del Este in August, and found that bargain products were traded mainly in dollars rather than the Paraguayan Guarani, indicating that the black market trade may be linked to money laundering. 

There are also economic factors that help spur the trade. ABC pointed to the inclusion of Argentina, Brazil and Paraguay in the Mercosur trading bloc -- which promotes the free movement of goods and currency -- as a facilitator. Meanwhile, recent drops in the value of the Argentine peso compared to the Guarani have reportedly led to an increased flow of goods into Paraguay. 

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