The US State Department named seven Central American countries as havens for laundering the proceeds of drug trafficking and organized crime, and described the region as a main cocaine corridor for US markets, confirming the importance of Central America in the international drug trade.
This is the first time since 2013 that the State Department has included Belize, Guatemala, Honduras, El Salvador, Nicaragua, Costa Rica and Panama together in the list of primary money laundering countries that forms part of its annual International Narcotics Control Strategy Report (INCSR).
An important development in the 2017 INSCR — which refers to trends and statistics from the previous year — is that El Salvador, Honduras and Nicaragua have re-entered the list of “major money laundering countries,” which the State Department defines as those “whose financial institutions engage in currency transactions involving significant amounts of proceeds from international narcotics trafficking.”
The INCSR explains that one of the main difficulties faced by Central American countries in combating money laundering is that their criminal investigation systems do not have the ability to trace money associated with drug trafficking or other types of criminal transactions. These include human or arms trafficking, or legal activities that are increasingly being used for money laundering, such as hosting high-level musical concerts or betting on popular sports.
The United States considers Guatemala, Costa Rica, Panama and El Salvador — the latter dollarized since 2001 — important financial centers where most money laundering occurs through banks.
The case of Honduras is illustrative of the relationship between state agents and local crime syndicates.
According to the report, “Honduras is not a major financial center. Here, money laundering is mainly generated by traffic throughout the region. The trafficking of undocumented people to the United States, extortion, kidnapping and public corruption also generate significant amounts of money to be laundered.”
Something similar, according to the report, is happening in Nicaragua.
The report also reiterates that from the jungles of Panama’s Darien region on the border with Colombia, to the Usumacinta River and the jungles of Petén in northern Guatemala, cocaine continues to flow freely by way of air, land and water.
According to the INCSR, some 1,000 tons of cocaine were transported last year through Guatemala. This figure could be much higher if we take into account that, according to InSight Crime, Colombia, the main coca producing country in the world, transported about 1,350 tons of cocaine last year.
Additionally, record opium poppy production numbers were recorded last year in Guatemala, presumably to supply the growing demand for heroin in the United States. In 2016, the Guatemalan government destroyed 17 million poppy plants.
In Guatemala, and to a lesser extent in Honduras, there was an increase in the traffic of chemical precursors used to convert opium poppy into heroin, but also in those used to convert coca leaves into cocaine hydrochloride.
InSight Crime Analysis
The figures published by the United States reveal a fact that seems obvious, but that is sometimes obscured by the dynamics of violence in Central America, especially in the Northern Triangle region: Drug trafficking, as well as much of the state corruption that protects traffickers, continues to be the main driver of flourishing criminal economies in the Central American isthmus.
Since the middle of the last decade, Central American drug traffickers have evolved from being simple “transporters” who collected cocaine from Colombia at the porous borders of Costa Rica and Panama to then move it on to Guatemala. These groups have begun to diversify their criminal enterprises.
Traditional groups such as the Lorenzanas in Guatemala, the Matta Ballesteros network in Honduras and the Perrones in El Salvador have joined up with more specialized money laundering groups. One of these is El Salvador’s Cartel de Texis, whose leader, José Adán Salazar Umaña, holds a White House designation as an international drug kingpin and has been investigated by the Attorney General of El Salvador for money laundering.
However, the Honduran case best illustrates how criminal actors in the drug trade permeated the political ranks of these countries and, as InSight Crime has pointed out, received favors and protection from them.
Devis Leonel Rivera Maradiaga, the former leader of the Cachiros in Honduras, recently accused former President Porfirio Lobo of having received bribes from his group, something that the politician has been quick to deny. In El Salvador, drug trafficking groups have made similar accusations: Perrones operators have also said they paid bribes to former President Antonio Saca, who is currently being held on corruption charges.
Guatemala remains, however, the crown jewel in the Central American drug trafficking landscape. Last month, the United States accused former President Roxana Baldetti and former Interior Minister Mauricio López Bonilla of conspiring to ship cocaine into the United States.
The State Department report has once again highlighted the revitalization of Central America’s narco-trafficking corridor, which had reached one of its last peaks in mid-2009 after a military coup in Honduras helped open the air route between that country and Venezuela.
After that, US officials and analysts talked about the possibility of a resurgence of Caribbean drug routes, but that did not happen, at least not in the same way that it happened in Central America.
Today, due to an increase in coca production in Colombia and the infiltration of criminal groups at the highest levels of political power, especially in the Northern Triangle, it is clear that entry and exit avenues for drugs and illicit money are working at full throttle.