Panama: Gateway for smuggled cigarettes to Latin America and Caribbean

Feb 12, 2024 News

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Kaieteur News – About 15 containers of contraband cigarettes enter Panama every month, making the Central American country the gateway for illegal cigarettes into Latin America and the Caribbean.

This reality was depicted with strategically placed containers on Cinta Costera 3, Panama City, by CBLA – Crime Stoppers, the regional office of an international organization that aims to contribute to multidimensional security and facilitates anonymous, reliable, and secure citizen participation in reporting crimes in 7 regions worldwide.

According to Crime Stoppers, this container installation serves not only as a wake-up call to the public and authorities on the occasion of the Conference of the Parties (COP10) scheduled in Panama from February 5 to 10, 2024, but also as an opportunity to highlight the need to strengthen public policies, reform, and harmonize the laws of the country to combat cigarette contraband, whose consequences directly impact the entire region and the lives of its inhabitants.

Prohibitive or extreme public policies, such as tax increases or the prohibition of the use of electronic cigarettes, vaporizers, and similar devices outlined in Law 315 currently in force in Panama, create a demand for the establishment of a black market, causing serious consequences for Panama and the region.

Economic losses and impacts on health and security

Contraband cigarettes, being cheaper, adversely affect health by promoting increased smoking. Additionally, they result in the loss of millions of dollars for the states in the region. Organized crime and illegal money launderers utilize Panama as the epicenter of their contraband activities. Simultaneously, this activity funds more significant crimes such as drug trafficking and human trafficking, in collaboration with gangs distributing the product in countries like Guatemala, Ecuador, Colombia, the Dominican Republic, among others.

Illicit cigarette trade in 2020 accounted for a loss of over $165 million in annual taxes for the Panamanian state. Considering the increase in contraband from 60% to 92% in just six years, the tax loss is alarming. Furthermore, 50% of the region’s contraband cigarettes are distributed from Panama.

According to Alejo Campos from Crime Stoppers, to minimize the consequences of illegal cigarette contraband, “It is necessary to create more effective laws that prevent, prosecute, and punish this crime, while also offering alternatives to tobacco consumers, such as introducing non-combustible cigarettes as a method of consumption reduction.”

Campos also warned that “Law 315 of 2022, which prohibits the use, import, and commercialization of electronic nicotine administration systems, electronic cigarettes, vaporizers, tobacco heaters, and other similar devices, with or without nicotine in Panama, is creating a parallel illegal market for contraband products and has left the Ministry of Health in this country unable to exercise oversight and protect consumers.”

Regarding such protection, Campos suggested that “civil society, consumers, government, and industry should be involved in legal framework discussions and provide science-based alternatives.”

An alternative

The organization’s spokesperson mentioned that countries like New Zealand, the United Kingdom, Scotland, or the United States have found in non-combustible electronic cigarettes and similar systems an alternative up to 95% less harmful than conventional cigarettes. They have successfully legalized it, offering better alternatives to their citizens and avoiding illegal contraband.

Campos added that tracking the distribution of the Selective Consumption Tax (ISC), of which a significant percentage should be transferred to the Ministry of Health and the National Oncological Institute of Panama, is crucial. However, these transfers have not been made in full to date, despite the budgetary needs of the two government institutions.

The implications of cigarette contraband in terms of security, due to its strong connections with organized crime and terrorism financing, are concerning. The high profits combined with low risks and lenient penalties make it increasingly attractive to criminals as a highly profitable product, easy to transport, subject to minimal controls, and with sanctions, when applied, much more lax than those for other crimes, such as drug trafficking. Crime Stoppers’ statements are made in the context of COP10, where the presence of 1,200 leaders committed to the cause is expected, and the “roadmap” for the implementation of the World Health Organization Framework Convention on Tobacco Control and the prevention of mortality associated with consumption will be defined.

 

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• An alternative, Cinta Costera, Conference of the Parties, Economic losses and impacts on health and security, Panama City

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