'Narcos Out'. Graffiti in Rosario, Argentina

Argentina is now a key source of precursor chemicals for Mexican cartels, raising the question as to whether these transnational drug trafficking organizations are fuelling rising violence and intimidation in the epicenter of the country's drug trade -- Rosario.

Rosario, Argentina's third-largest city, located in the Santa Fe province, is best known as the birthplace of superstar soccer player Lionel Messi, and revolutionary "Che" Guevara.  Recently it has risen to notoriety as Argentina's new drug capital. If, as Argentina’s security minister claims, the country is entering a "war" against drug trafficking, then Rosario is the front line.

Over the last few years, as Rosario has become an increasingly important production and transit point for drugs linked to Mexican cartels, violence in the city has also been on the rise. There have been more than 1,000 murders tied to drug trafficking in the city since 2004, when the annual number of drug-related homicides was just 70 -- a figure that by 2012 had risen to 160. In recent months the situation has reached a critical point.  The city surpassed 2012's year-end homicide total of 182 some time ago, and recorded its 200th homicide on November 2.

The city has also recently witnessed intimidation campaigns targeting judicial officials, members of the security forces and politicians, culminating in an October attack on the residence of Santa Fe governor Antonio Bonfatti, during which four people shot up the building. Following the assault, the judge involved in the investigation received a text message threatening Bonfatti and other public officials.

The rise in violence coincides with an exponential spike in drug activity in the city. Between 1973 and 1988, authorities in Rosario seized a total of just three kilos of cocaine, according to Clarin. In 2012, the total was 400 kilos.

InSight Crime Analysis

Rosario's rising violence is based, in part, on increased competition between several local criminal organizations, including "Los Monos," led by the Cantero family, and "Los Garompas," as well as other smaller groups. Local experts insist these groups are more comparable to street gangs than cartels and they lack the organization and power of the criminal networks in countries with more established roles in the drug trade, such as Colombia and Mexico

However, transnational drug trafficking organizations have also established a firm presence within Argentina. Colombian narcos have reportedly taken root in Rosario, with police indicating the Oficina de Envigado is behind much of the drug trade, while Mexican cartels, especially the Sinaloa Cartel, have longstanding interests throughout the country.

Until recently, the violence associated with the drug trade was minimal and the criminal networks behind it maintained a low profile. However, the current escalating murder rates, appearance of larger gangs and attacks and threats against public officials are all indicative of organizations that have increased confidence in their power and are unafraid to use intimidation tactics, even against high-profile targets. 

These methods are in keeping with the tactics favored by larger drug trafficking organizations in other countries, and it is likely they are linked to the spread of transnational organized crime groups -- either directly or as a result of competition for the markets their presence creates. And while growing cocaine exports out of Argentina and a large domestic cocaine market may account for much of these markets, it is in the country's role in the precursor chemical trade in particular that has drawn many of these organizations into the country.

Mexican cartels, primarily the Sinaloa Cartel, have been moving into Argentina since the mid-2000s, when the country became a major supply center for chemicals used in the production of cocaine and methamphetamine. The growing meth market, both in Latin America and across the globe, has made these drugs an increasingly important source of income for the cartels, and Argentina has become a crucial link in the supply chain.

For years, Argentina was open territory for individuals and groups seeking to import industrial quantities of ephedrine, pseudoephedrine and other precursor chemicals used to produce drugs like cocaine and methamphetamine. The country had minimal restrictions on imports of these chemicals, allowing potential drug manufacturers access to a near endless supply of precursors.

The governments of first Nestor Kirchner, and then his wife and successor Cristina Fernandez de Kirchner, proved unwilling to regulate this trade -- unsurprisingly given it was the source of much of their campaign financing. Pharmaceutical companies were some of the Kirchners' biggest campaign donors, particularly during Cristina Kirchner's presidential campaign in 2007, according to a 2013 report by International Assessment and Strategy Center (IASC) fellow Douglas Farah (pdf). Kirchner's campaign and affiliated party received almost a third of publicly declared campaign donations -- about $1.5 million -- from individuals connected to pharmaceutical companies with rumored cartel affiliations. Accusations are that the local partners of the Sinaloa Cartel bankrolled a large portion of Fernandez's campaign, playing a significant role in her victory.

With no oversight and little pressure from the government, precursor chemicals poured into the country. According to trade data cited in the IASC paper, in 2008 Argentina imported 22.5 metric tons of precursors in 57 shipments -- though the legal pharmaceutical industry needed only 0.8-1.2 tons of ephedrine for its total annual use. Many of the shipments were facilitated from Mexico by major Sinaloa Cartel player Zhenli Ye Gon, who leveraged his connections in China to order large shipments of ephedrine to Argentina, where it was processed, packed into wine bottles and transported through a state-sanctioned shipping company to Mexico.

One of the first clear signs of the extent of the Mexican presence in Argentina's drug trade came in July 2008, when authorities discovered a major drugs lab in the Ingeniero Maschwitz neighborhood of Escobar, in Buenos Aires province. The lab, which was used to produce ecstasy and crystal meth, had enough precursor materials at the time of seizure to create 200,000 meth tablets. Ten individuals -- nine Mexicans and one Argentine -- were arrested at the lab and later sent to prison.

Authorities continued investigating people connected with the meth trade, and in November police arrested Mario Segovia, nicknamed the "King of Ephedrine," at his luxurious Rosario home. Segovia was responsible for transporting more than 8,000 kilos of ephedrine from Ingeniero Maschwitz and other labs near Buenos Aires to Rosario -- much of which was then sent on to Mexico, concealed in sugar shipments. Along with Segovia, police also arrested Jesus Martinez Espinoza, a Mexican national who was believed to be the main point of contact for the Sinaloa Cartel in Argentina.

At the same time, the deadly consequences of the meth trade were already emerging within Argentina. A few weeks after the Ingeniero Maschwitz bust, three of Argentina's major ephedrine suppliers with ties to the lab were abducted and murdered in Buenos Aires, in the country's highest-profile crime associated with meth production. One victim, Sebastian Forza, was a long-time pharmaceutical businessman turned ephedrine supplier, with a history of selling to Mexican cartels and the Ingeniero Maschwitz lab. Just a few days before the lab bust, Forza, along with the other two victims, Damian Ferron and Leopoldo Bina, had been negotiating ephedrine purchases with Rodrigo Pozas Iturbe, another Mexican arrested in connection with the lab.

In the midst of public outrage following the triple murder, the Kirchner administration began a highly publicized crackdown on the internal drug trade, promising to curb imports of precursor chemicals, particularly ephedrine. The government efforts appeared to be somewhat effective, as 2009 imports of ephedrine dropped to 39 shipments for a total under 14 metric tons (still approximately 14 times the legitimate domestic demand), and dropped to just 11.8 metric tons in 2010. For a moment, it seemed, the producers were on the run.

More likely, though, they were just keeping a low profile, as ephedrine imports shot back up again after 2010 -- to 18.6 metric tons in 2011, and 17.3 metric tons in 2012. As of June 2011, Maruba, the Argentine-owned import company often used for precursor shipments, was still delivering ephedrine to the Mexican port of Manzanillo, in Sinaloa Cartel and Zetas territory, even though the chemical has been illegal in Mexico since 2008. Meanwhile, the Sinaloa Cartel was reinforcing its influence over all levels of the drug trade in the country, while the cartel head Joaquin "El Chapo" Guzman was even rumored to have temporarily set up residence in Argentina in 2011.

The synthetic drug trade is now flourishing again in Argentina, with new ephedrine supply routes and producers springing up across the country, particularly near the capital of Buenos Aires and in the historic trafficking stronghold, Rosario.

In early September, authorities discovered what the national Secretary of Security called "Argentina’s largest cocaine kitchen" in a house near Rosario, which was stocked with large quantities of drugs and precursor chemicals. In mid-October, "Operation Green Apples" captured a ring of sellers with an assortment of synthetic party drugs worth more than $15 million and links to Rosario-based suppliers.

With weak law enforcement, widespread institutional corruption and the government's reluctance to tackle the precursor trade, the large-scale seizures, discoveries of laboratories and operations against trafficking rings are likely to continue to increase in Rosario and Argentina as a whole as local traffickers and their international backers take root. As they do, the violence recently witnessed in Rosario is likely to become an ever more common occurrence, both in the city and throughout the country.

Investigations

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