Smuggling from Paraguay yields profits of up to 500% for organized crime in Brazil

The activity moves billions of reais outside the formal economy, without paying taxes. According to inspection bodies, in addition to supplying organizations, smuggling generates unfair competition with companies that operate legally and puts pressure on public revenue.

Activity in the past restricted to sackers or muambeiros, as the buyers were called, today smuggling is essentially dominated by factions such as the PCC (Primeiro Comando da Capital) and the CV (Comando Vermelho), but also by smaller groups seeking to gain space.

A study produced by Idesf (Institute for Economic and Social Development of Borders), shows that the profit margin for smuggling reaches 507%, in a market that generates R$60 billion annually, and that the practice has consolidated itself as one of the most profitable crime fronts.

The index was calculated based on the difference between the estimated cost of illegally bringing the merchandise to Brazil and the value obtained from its resale on the clandestine market, in which tax evasion makes room for lower prices than those charged on the regular market.

The smuggling of Paraguayan cigarettes is seen as a way of financing the activities of these factions and even terrorist groups such as Hezbollah, according to a report from the last decade by the Foundation for the Defense of Democracies, a US policy institute.

And it is precisely cigarettes that are the smuggled product that generates the highest profitability rate, followed by medicines (415% profit) – peptides and anabolic steroids included – and smartphones (390%). The list of most seized items also includes perfumes, agricultural pesticides, toys, batteries, clothing, computers, alcoholic beverages, tires and electronic cigarettes.

Idesf reached this conclusion based on the assessment that only between 5% and 10% of smuggled goods are seized, which means that the financial movement could be even higher, as Federal Revenue agents claim that inspections on the Friendship Bridge, for example, do not reach 2% of the flow of pedestrians and vehicles – there are 100 thousand people per day crossing the bridge that connects Brazil to Paraguay.

Furthermore, it is not necessary to use the bridge to smuggle prohibited products. One of the regions of Foz do Iguaçu with a strong presence of organized crime is Vila Portes, which is on the banks of the Paraná River and has several improvised clandestine ports to receive boats departing from Ciudad del Este.

The price difference between Brazilian and Paraguayan cigarettes is 650%, but the study considered the smuggler's logistics, which has an average cost of 22%. It involves not only transport, but also personnel (drivers, oranges to transport the products, etc.), depreciation of assets (vehicles seized in operations, often trailers costing more than R$1 million), legal fees and a type of "unemployment insurance" – for periods in which the gang reduces its operations due to broader repression operations.

At the beginning of June, the Federal Revenue Service and the PF (Federal Police) launched operation Sicarius to combat a criminal organization that operated in the region of Guaíra (PR), which borders the Paraguayan Salto del Guairá. According to the agencies, the suspicion was that the group was laundering money from the smuggling of cigarettes and pesticides.

A money changer would have handled more than R$375 million between 2019 and 2024, controlling accounts in the names of people and shell companies. In his personal bank accounts alone, financial transactions totaled R$114 million in the period.

"Smuggling does not have a tax cost, as occurs with legalized activities, but it has other charges, such as the cost of not being caught, the cost of having a car stolen and other intangibles", said the president of Idesf, Luciano Stremel Barros.

Reflecting the strong smuggling activity in the triple border region, the PRF (Federal Highway Police) seized 6.3 million packs of cigarettes in Paraná between January and April, 46.3% of the total seizures made on federal highways across the country in the period.

"Cigarettes involve large trucks, large loads, requiring a structure that even co-opts drivers, a truly organized structure," said the superintendent of the PRF in Paraná, Fernando César Oliveira.

Electronic cigarettes, banned by Anvisa (National Health Surveillance Agency), have also gained market share in smuggling in recent years, with R$440 million in seizures between 2020 and last year.

Although Paraguay is the major distribution center for contraband in the region, Argentina also appears in the ranking of illicit products such as wine. The average difference between prices charged in Brazil and in the country is 400%.

Excluding the "smuggling cost" of 22%, it still results in a profit of 312% for those who promote the illegal entry of the drink into the country.

DESTINATION OF SEIZURES

Regardless of which body makes the seizure, goods retained due to smuggling and smuggling are sent to the Federal Revenue Service and can result in four distinct scenarios.

They can be donated, auctioned, destroyed or incorporated into the Union's assets. The destination of the products is not unique because there are variables involved in the seized goods. Toys that do not have the Inmetro (National Institute of Metrology, Quality and Technology) seal, for example, are not fit for use and are destroyed.

Destruction is used when products are counterfeit and therefore could not be sold in any way, such as a national team or football club shirt.

The same happens with cigarettes and is also the case with glasses.