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Smugglers play central role in money laundering, say law enforcement

June 25, 2014

Some people really bring the party.

Costa Rica’s National Police discovered 814 boxes containing more than 19,000 bottles of beer, and another 76 boxes with 1,030 bottles of other liquors hidden in a mobile disco truck searched in Cuidad Neilly, near the Panamanian border, on Feb. 6. The bootleggers even stuffed their speakers and light rigs with beer bottles.

The driver of the roving party truck had no tax receipts for the deluge of liquor on board, and police seized the black-market booze. That same day, National Police seized 20,000 bottles total of various types of smuggled liquor across Costa Rica.

Costa Rica’s porous borders and relatively high cost of living make the country a prime target for smugglers angling to sell liquor, cigarettes and even seemingly innocent household items, like canned tuna and cartons of milk, at lower prices by avoiding taxes and other duties. While contraband might seem like a good deal, law enforcement officials argue that the illicit trade aids money launderers, weakens an already strained tax collection system, and could even pose a health hazard.

“This is an issue that affects all levels of society,” said Chargé d’Affaires Melanie Smart of the British Embassy in San José during her opening remarks of a weeklong workshop dedicated to tackling illicit commerce in the region.

“The proceeds of illegal trade often end up in the hands of criminal organizations, and fund other illegal activity. This last point is especially pertinent in Central America where insecurity has such a profound impact upon the lives of citizens,” Smart said.

Vice Minister of Revenue Álvaro Ramos, who coordinates tax, customs and the Fiscal Control Police (PCF), said that law enforcement must challenge the romantic image of the smuggler.

“This is not a nice guy,” Ramos said, “(this is someone) who’s trying to legitimize capital from much darker businesses.”

The vice minister told The Tico Times that the government needs to work on improving communication between ministries to better coordinate efforts to fight contraband, especially in medications, which could be adulterated and endanger people’s health.

Beer was the most popular liquor for smugglers to secret across the border, with the PCF seizing 123,072 bottles in 2013, followed by 36,464 bottles of whisky.

Nearly 22 percent of the alcohol sold in Costa Rica is contraband, according to a 2013 Euromonitor report.

PCF confiscated more than 21 million cigarettes in 2013. Ramos speculated that the spike up from the 4.3 million seized on average between 2010 and 2012 could be due to the anti-smoking law that went into effect in March 2012.

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