• Connect with us on Linkedin

Piracy, Smuggling on the Rise in Booming Brazil

The explosive growth in Brazil's economy over the last decade has produced an insatiable demand for pirated and smuggled goods, and organized crime is reaping the benefit.

Linkedin
Google +

Brazil's federal revenue service reports seizing $812 million worth of illegal consumer goods at airports, seaports, and border crossings in 2011, up 16 percent from 2010. The trend has been rising for several years; a February 2011 report by the National Council to Combat Piracy and Crimes against Intellectual Property (CNCP) showed a three-fold increase in seizures of false, smuggled, and pirated products from 2004 to 2010.

In many cases, counterfeit goods enter Brazil via Paraguay's Tri-Border Area, a hub of illicit activity, including drugs and weapons trafficking. Smugglers source from a large variety of locations, as far away as China. Once goods are inside Brazil, they are distributed by criminal networks that sometimes span the country.

The smugglers and counterfeiters are driven by Brazil’s booming domestic market, which is hungry for cheaper goods than Brazil's stiff tariffs and high taxes allow. The Doing Business Project, a subsidiary of the World Bank Group, estimated Brazil's tax rate to be 67.1 percent of profit, compared to 46.7 percent for the United States. The high tax burden on Brazilian businesses is passed on to consumers, who must also contend with the high tariffs on imported products like electronics and automobiles. This encourages consumers to buy in the informal sector, where goods are cheaper.

In a 2010 survey of Brazilian consumers, conducted by the Rio de Janeiro State Commerce Federation, of the 52 percent of consumers who had not purchased a pirated good that year, only four percent cited fear of prosecution. Of those 48 percent who had, the overwhelming majority (94 percent) said lower prices drove them to buy counterfeits.

The trade in pirated and smuggled goods feeds other types of organized crime in Brazil. According to the CNCP's 2011 report "the route used by smugglers who traffic pirated products in Brazilian territory is the same used by other criminals to move their products." The report also notes that up to 20 percent of seizures of pirated or smuggled goods also brought in drugs, guns, or ammunition. This points to links between organized crime and piracy in Brazil, suggesting that the same groups who traffic drugs and arms may also be involved in trafficking contraband goods.

Roberval Ferreira França, a military police colonel, has said that counterfeiting networks in São Paulo state are directly linked with smuggling and drug trafficking, as the Bom Dia Network reports. Rafael Thomaz Favetti, then-president of the CNCP, said in August 2010 that piracy was controlled by organized crime, according to a report by Agencia Brasil.

There is evidence that many smugglers have penetrated the very authorities hunting them. Weeks ago, federal police, arrested five employees of the Revenue Service, along with 15 others, who, together, had been running an international illegal import ring with hubs in at least three different states. The Revenue Service estimated the smuggling ring was responsible for more than $50 million in illegal imports.

In another example of corruption aiding smuggling, authorities in Pernambuco arrested a councilman and four police officers for accepting bribes to allow the safe passage of pirated goods. The five were on an anti-piracy squad. The year-long investigation, in which police also found drugs, weapons, and US and European currency, involved 125 law enforcement agents. The manpower necessary to dismantle a smuggling ring of no more than five people illustrates the difficulty in tackling piracy in Brazil. A study by the Brazil-US Business Council estimated the value of Brazil's black market of consumer goods at more than $20 billon. This means the port, airport, and border operations of the Federal Revenue Service, the largest source of apprehensions, disrupted less than 5 percent of pirated goods last year.

Linkedin
Google +

---

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

We also encourage readers to copy and distribute our work for non-commercial purposes, provided that it is attributed to InSight Crime in the byline, with a link 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.

InSight Crime Search

The Complete Organized Crime Database on the Americas

InSight Crime Social

facebooktwittergooglelinkedin

InSight Crime Special Series

The Zetas in Nuevo Laredo

Los Zetas in Nuevo Laredo

After the capture of Zetas boss "Z40," Nuevo Laredo is bracing itself for the worst. This investigation breaks down what makes the city such an important trafficking corridor, and what it will take for the Zetas to maintain their grip on the city.

See entire series »

 

Uruguay's Marijuana Bill

Uruguay: Marijuana, Organized Crime and the Politics of Drugs

Uruguay is poised to become the first country on the planet to regulate the production, sale, and distribution of the drug.

See entire series »

El Salvador's Gang Truce

El Salvador's Gang Truce

The truce between El Salvador's two largest gangs -- the MS-13 and the Barrio 18 -- opens up new possibilities in how to deal with

See entire series »

Juarez After The War

Juarez After The War

As a bitter war between rival cartels grinds to an end, Ciudad Juarez has lost the title of world murder capital, and is moving towards something more like normality.

See entire series »

The Zetas And The Battle For Monterrey

The Zetas and the Battle for Monterrey

InSight Crime delves into the Zetas' battle for Mexico’s industrial capital, Monterrey, getting to the essence of a criminal gang that defies easy definition.

See entire series »

Slavery in Latin America

Slavery in Latin America

InSight Crime coordinated an investigation into modern slavery, looking at how Latin America’s criminal groups traffic human beings and force them to work as slaves.

See entire series »

FARC, Peace and Criminalization

FARC, Peace and Possible Criminalization

The possibility of ending nearly 50 years of civil conflict is being dangled before Colombia. While the vast majority of the Colombian public want to see peace, the enemies of the negotiations appear to be strong, and the risks inherent in the process are high.

See entire series »

Displacement in Latin America

Displacement in Latin America

InSight Crime coordinated an investigation into the new face of displacement in Latin America, where organized criminal groups are expanding and forcing people to flee.

See entire series »

Target: Migrants

Target: Migrants

The growth of organized crime in Mexico and Central America has led to an increase in violence and insecurity across the region, posing challenges to citizens, public security forces, and travelers.

See entire series »

Zetas in Guatemala

The Zetas in Guatemala

Mexico's Zetas have taken Guatemala by storm, and they are testing this country and the rest of the region: fail this test, and Central America sinks deeper into the abyss.

See entire series »

Most Read

Testimony Describes Zetas' Ties to Mexico Governor

Testimony Describes Zetas' Ties to Mexico Governor

Testimony from a US federal court provides more fuel for accusations that a former governor of Veracruz, Mexico, accepted cash from the Zetas, which was then part of the Gulf Cartel.

Read more

Mexico's Kidnapping Hotspots: The High-Risk States

Mexico's Kidnapping Hotspots: The High-Risk States

Kidnapping is the most troublesome security problem facing Mexico’s government, and a breakdown of kidnapping reports by a watchdog group reinforces the idea that only long-term institutional reform can cure it.

Read more

Colombia Houses Prisoners in Bogota Park Due to Overcrowding

Colombia Houses Prisoners in Bogota Park Due to Overcrowding

Close to 70 prisoners are being held in a park in Bogota, underscoring both the unsustainable levels of overcrowding in Colombia's detention centers and the government's failure to provide adequate solutions.

Read more

Latest Criminal Profile