A free trade zone in Belize's Corozal district has become a hub for the regional contraband cigarette trade, highlighting both Belize's role in regional smuggling and how the lax customs regulations in such zones create criminal opportunities.

Black market cigarettes from countries such as India, China, Switzerland, Paraguay, and Panama are sold in Belize's northeast border region, tax free and for a fraction of their normal legal price, according to elPeriodico.

An official from tobacco company Phillip Morris International (PMI), who accompanied ElPeriodico's reporters to Corozal, negotiated the purchase of 10.8 million cigarettes -- a quantity that would normally cost a Guatemalan retailer $500,000 -- for $314,000.

According to PMI, the majority of cigarettes enter Belize via a Paraguay-Uruguay-Panama route, and then usually leave Belize by land over the border with Guatemala or Mexico, in vans packed with merchandise.

InSight Crime Analysis

The percentage of contraband cigarettes sold in other Central American nations illustrate the breadth of the trade. According to ElPeriodico's numbers, 18 percent of cigarettes sold in Guatemala are contraband, compared to 11.7 percent in El Salvador, 10 percent in Nicaragua and Costa Rica, and 70 percent in Panama.

There are plenty of indications that Belize plays a particularly significant role in the regional contraband cigarette trade. In early June, officials in Guatemala's Peten department discovered an abandoned truck with three million contraband cigarettes, believed to have originated from Belize. Inspections of stores in Aguascalientes, Mexico by Mexican authorities led to the seizure of 145 thousand contraband cigarettes allegedly sourced from Belize.

Belize's prominent role in the contraband trade is likely enhanced by its porous borders, lack of security measures and rugged geography, all factors which have contributed to a rise in organized crime activity in the country in recent years.

Corozal is not the only free trade zone to attract the attention of criminals. In Colon, Panama, drug traffickers use the zone to launder profits, purchasing goods which are then shipped to Colombia and sold at a discount price, converting drug dollars into Colombian pesos.

Source