Arrests Again Point to Paraguay President’s Contraband Cigarettes

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Cigarettes manufactured by a firm belonging to the family of Paraguay’s president have once again been seized after being smuggled across the border into Brazil, firmly pointing towards the involvement of powerful Paraguayan elites in the booming business.

On January 27, authorities in Brazil seized 500 boxes of contraband cigarettes originating from the Tabacalera del Este company, which is owned by the family of Paraguay President Horacio Cartes, ABC Color reported. The latest seizure comes just a month after 28 smugglers, including three members of Brazil’s First Capital Command (Primeiro Comando da Capital – PCC) and a police officer, were arrested for attempting to smuggle contraband cigarettes also manufactured by Tabacalera del Este into Brazil.

According to ABC Color, smugglers transport cheaper Paraguayan cigarettes across the border to Brazil with the intention of selling them at a marked-up price. The January seizure took place in Brazil’s southwestern Paraná state along the Brazil-Paraguay border while the December arrests occurred in the border town of Pedro Juan Caballero, a hub for criminal organizations looking to take advantage of the porous border region between the two countries.

SEE ALSO: Coverage of Paraguay

In a report by the news site Nós, the number of contraband cigarettes intercepted while coming across the border has been growing steadily in recent years. As InSight Crime previously reported, just 10 percent of cigarettes manufactured in Paraguay are sold through legal channels.

The low risk and high profits of the contraband cigarette trade make it increasingly attractive for Latin American criminal organizations that are trying to diversify their revenue streams.

InSight Crime Analysis

With members of Brazil’s powerful PCC found to be distributing cigarettes manufactured by Tabacalera Del Este, there are substantial implications that criminal groups may be allied with political elites in Paraguay to benefit from the lucrative industry.

According to the Nós investigation, it is estimated that half of the 350 million reals (about $110 million) worth of contraband cigarettes smuggled across the border in 2016 were manufactured by Tabacalera Del Este.

SEE ALSO: Coverage of Contraband

Brazil’s PCC has long had a presence in Paraguay, and most recently has been detected in the border town of Pedro Juan Caballero. Given its involvement in the December smuggling attempt and its continued presence in the border region, it is likely that the criminal group helps ensure safe passage for contraband cigarettes smuggled by Cartes’ family company and destined for Brazil.

With members of Paraguay’s political elite allegedly involved in the trade and a lack of political will to combat the contraband cigarette trade from Brazilian officials, it is unlikely there will be a reduction in the number of contraband cigarettes illegally transported across the border.

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