SAN JOSÉ, Costa Rica, Oct. 19 — A recent study paints a panoramic picture of a surging global trade in illicit cigarettes that is funding groups from Hezbollah and Hamas to the Central American Los Zetas cartel.

The study, “From Ant Smuggling to an Elephant in the Market,” was conducted by CID Gallup for the Costa Rican-American Chamber of Commerce (AmCham). It involved an analysis of more than 20 studies from the past 4 years, and shows an alarming increase in the contraband cigarette trade and how these illegal profits are used to support organized crime and fuel terrorism.

Due to the complexity and alarming growth of the illicit trade in cigarettes, AmCham is urging more inter-governmental efforts and public-private alliances to identify strategies to curb the trade.

Dennis Whitelaw, AmCham President said, “It is important to us to have this type of information available. We can generate better recommendations and provide more comprehensive support to the State in its fight to prevent the development and entry of these products into the country.”

Solutions must include a review of current regulations to fight smuggling, the use of technology to aid security forces, raising penalties for those involved, and allocating more financial and human resources to fight this activity.

The scope of the problem to Central American economies is significant with $113.6 million USD lost due to regional taxes evaded by criminal networks. Costa Rica lost an estimated $26 million USD, and Panama an estimated $41.0 million USD.

Another key finding of the study confirmed that money from the illicit trade of cigarettes, due to its high profitability, is used to fund regional crime organizations such as gangs in El Salvador and drug cartels such as the Zetas and Xinaloa in Belize and Mexico, which have become protagonists in trafficking and distributing the smokes.

International expert Emanuele Ottolenghi, from the Foundation for Defense of Democracies in Washington, D.C., said, “Drug trafficking, trade-based money laundering, contraband and terror financing in Latin America have merged as a single threat: drug cartels, smugglers, counterfeiters, insurgent groups, and terrorist organizations have coalesced, sometimes against local authorities, and sometimes with their active complicity and support, for their mutual benefit. The result is a toxic mix that is undermining society itself in Latin America while posing a threat to the United States and Europe as well.”

In Central America, Panama leads illegal cigarette consumption with 67 percent of smokers using them. Panama is followed by El Salvador where 1/3 of smokers purchase illegal products; Guatemala and Honduras each found 1/5 of smokers doing so, Costa Rica with 16 percent of smokers buying contraband cigarettes, and Nicaragua with 5 percent.

AmCham Costa Rica has developed a web-app with the Finance Ministry to allow people to report illicit trade: mercadoilegal.com. The web-app was replicated in El Salvador and in Guatemala. Other public-private initiatives to curb illegal trade are in the works, stated AmCham.

/PRNewswire/