Juan Carlos Buitrago: Working Towards an Integral Policy to Combat Illicit Trade in Latin America

By General (Ret.) Juan Carlos Buitrago Arias

Founder and CEO – StrategosBIP
Author, Principles are not Negotiable
The Brand Protection Professional

It is a true honor to have been recognized by the Michigan State University Center for Anti-Counterfeiting and Product Protection as one of Latin America’s Brand Protection Heroes of 2021.

This year the Parlatino” (the Latin American Parliament composed by the countries of Latin America and the Caribbean) passed two fundamental laws: the law on the Extinction of Ownership and the law on Illicit Trade and Transnational Crime (Parlamento Latino Americano y Caribeno, 2021). In addition, they have already approved other laws, which are certainly very useful for intellectual property rights protections and addressing illicit crime, including: the framework law on citizen security and  the model law for the prevention and combat of violence, drug trafficking and terrorism (Parlamento Latino Americano y Caribeno, 2021).

A number of recent activities in certain Latin American countries are also noteworthy here:

Ecuador,  has just adopted an anti-smuggling law based on the one passed by the “Parlatino”, an example that other Latin American countries should follow, taking up valuable instruments of the initiative in the areas of: inter-institutional coordination, transparency and integrity, administrative and criminal sanctions, international cooperation and illicit electronic commerce.

Colombia, is in the process of updating Law 1762 of 2015-Anti-Smuggling Law, almost perfect in its design, but experiencing  difficulties in its development and implementation. There is no doubt that the perception against smuggling, counterfeiting and adulteration of products has changed for the better with the passing of these laws. However, more urgent and greater efforts and resources are required to reintegrate and formalize almost 60% of families in the country who live off informality (a variety of unregulated human activities that go under the radar, stay above or beyond the law, or circumvent the law through loopholes) and illegal trade. In addition to the need to overcome the cumbersome tax and customs system by simplifying, streamlining and automating processes, making the National Anti-Smuggling Center a reality; intervening fearlessly and going head-on against corruption, and modernizing our obsolete systems to facilitate and control trade at ports, airports, and borders.

The economic fraud resulting from smuggling, counterfeiting and illicit trade costs the world 3% of Gross Domestic Product (GDP), something around 500 billion dollars a year. In Colombia alone, the cost amounts to USD 6 billion, and every year huge efforts are made by Customs, police and private enterprise to combat it (OECD, 2019). In 2021, there have been two impact operations led by INTERPOL, EUROPOL and AMERIPOL to contain the global illicit market of medicines, agro-industrial products and electronic fraud (INTERPOL, 2021 and ELPACCTO, 2021). However, despite the efforts of more than 72 countries that participated in these procedures, Latin America and the Caribbean have shown to be very weak in terms of institutional capacity.

Aruba and Panama are the largest gateways for smuggled cigarettes and liquor into the Caribbean and Latin America (The Economist, 2018 and Rainsford, 2021). Large shipments land clandestinely on the Atlantic Coast and those that are not seized cross the Colombian Pacific coast to feed the smaller-scale domestic illegal market,  mainly Ecuador, which accounts for 79%. In November of 2021, a container from Panama was seized in Guayaquil with almost 11 million cigarettes of Asian origin; and in Colombia last year (Buitrago Arias, 2021), the National Navy, the Tax and Customs Police -“POLFA” and the National Tax and Customs Directorate – “DIAN”, with the support of Immigration and Customs Enforcement – “ICE”-USA and private enterprises, have seized an all-time record of 600 million units of contraband cigarettes (Incidencia de Cigarillos Ilegales en Colombia, FND) – this means that the mafias continue to penetrate our economies. There is no doubt that cigarettes and alcohol are harmful to health, but equally or more harmful is to consume these products from the illegal market, the same markets that finance multiple forms of crime.

If we look at the control of imports of potable alcohol, there is little regulation to prevent importation and the potential damage to health caused by the misuse of alcohol is a significant problem. Also, the enormous and rapid growth of sales through e-commerce in an increasingly digitalized world adds to the issue. The lack of regulation of e-commerce and social media platforms for the sale and advertising of alcoholic beverages is a key concern. Promoting self-regulation of platforms as a first step is essential to address these risks.

The increased cooperation of the respective authorities and the institution of penalties must be more robust and efficient, seeking to implement measures that attack the finances of criminal gangs, pursuing the money and with very effective measures such as the Extinction of Ownership which requires the loss of rights in favor of the state, regarding a good when it has been an instrument, object or product of illicit acts.

Finally, in order to move towards a comprehensive strategy in Latin America to mitigate illicit trade, it is essential to intervene and disrupt the chain of corruption that has managed to incorporate crime mafias in public and private institutions. It is also necessary to apply measures to extinguish the ownership of public officials convicted of corruption and to work on the culture of legality. In Colombia,  the Legal Trade Zones program was created, in which all the institutions are afforded the opportunity to get involved in the fight against illicit trade act. Its purpose is to formalize small traders who have traditionally engaged in the production, distribution and marketing of counterfeit, adulterated or contraband products. It is also accompanied by an intense campaign of children against illicit commerce, where the spokespeople are children and adolescents whose families live in vulnerable areas, such as border areas, and whose economic activities are based on the sale of products of illegal origin. Combating illicit trade mafias in all their forms with intelligence, judicial police, money laundering and confiscation of assets is key, but intervening with preventive and formalization purposes in families and sectors at risk to get them out of the labor of informality is the master key to eradicate the phenomenon of illicit trade in Latin America.


Juan Carlos Buitrago Arias:

As a former Colombia law enforcement official, he has been an ally of the private industry, opening the doors and generating public and private cooperation. Some of the credentials and accolades outlined that led to his designation as one of the A-CAPP Brand Protection Heroes for 2021, include:

He graduated first among his class peers and worked 33 years for the Colombian National Police, where he led important national operations, Intelligence and Counterintelligence Operations and also served as Head of Intelligence of the Colombian National Police and General Secretary of the Colombian National Police. He also founded the Colombian Office in Europol and contributed to the creation of Ameripol. His last position with the Colombian government was that of Director of Tax and Custom Police (POLFA).

During his career, he worked closely with the National Prosecution office with the goal of closing down the illegal organizations that promote counterfeiting and obtain money from illegal commerce of products. During his work with the Tax Police and Customs, he dismantled several heads of criminal structures linked to the illicit trade of cigarettes. He built strong ties with the international institutions that allowed him to increase the work in this field and prosecution internationally. He is also the author of the book “Los principios no se negocian”.

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