Contraband Cost Brazil a Staggering $41 Billion in 2016: Watchdog

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Contraband cost Brazil tens of billions of dollars in 2016, according to two watchdog groups, an astonishing amount of money that illustrates the depth of the problem.

Brazil’s Parliamentary Front for the Fight on Contraband and Counterfeit (Frente Parlamentar Mista de Combate ao Contrabando e à Falsificação) and the National Movement for the Defense of Brazil’s Legal Market (Movimento Nacional em Defesa do Mercado Legal Brasileiro) said the country lost an estimated $41.5 billion (130 billion reais) in 2016 due to contraband, reported the Jornal do Brasil.

The two organizations shared the figure during the launch of a campaign to fight contraband — “The Brazil we Want” (“O Brasil que nós queremos“) — which is backed by the Ministry of Justice. The figure is the sum of the monetary losses suffered by some sectors of the economy due to the flow of contraband into the country — chiefly the textile, tobacco and car industries — and the money lost through tax evasion on contraband products.

SEE ALSO: Brazil News and Profiles

The practice has reportedly increased by 13 percent compared to 2015, when the losses suffered by contraband were valued at an estimated $36.7 billion. Authorities believe this is due to a combination of different factors, namely the increase in taxes, the country’s economic crisis, and the fragility of its borders. 

Efraim Filho, President of the Parliamentary Front for the Fight on Contraband and Counterfeit, said the fight against contraband entails tougher border controls, but it also requires eradicating people’s acquiescence towards the crime.

“People often consider [contraband] to be a rather mild criminal offense, because the image they have is that of a man who sells CDs and DVDs, or counterfeit clothes and bags. But when you dig deeper, contraband is actually something extremely violent and dangerous for society, a practice that jeopardizes formal jobs, finances drug trafficking and puts people’s health at risk,” Filho was quoted in Agência Brasil as saying.

InSight Crime Analysis

The estimates for the amount of money lost on contraband in Brazil are staggering, to say the least.

To put the figure into perspective, the World Bank valued Brazil’s 2015 GDP at $1,775 trillion. If the estimates are correct, the money lost in contraband that year amounted to over 2 percent of the country’s GDP. And as the contraband estimates reportedly increased in 2016, this figure is likely to have grown bigger through time.

SEE ALSO: Coverage of Contraband

One of the goals of “The Brazil We Want” campaign is to highlight the positive effects that would result from the eradication of contraband. With $41.5 billion, the campaign says the government could build 1,000 more hospitals, 65,000 kindergartens, 1.3 millions public housing units, or over 25,000 public schools.

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