Colombia: Smuggling Continues to Bleed Country's Coffers
Despite jersey sales during the World Cup being a success for official seller Adidas, Colombia says there were millions more untaxed units sold.
The unofficial report is that 20 million Colombian jerseys were sold, compared to the one million number provided by Adidas, according to El Pais. The 20 million reported means one in two Colombians bought a jersey.
Similar pirated items sold in the country are untaxed, totaling a loss of almost $7 billion per year.
An official who spoke anonymously to El Pais explained that there is an intricate network of smugglers who have a wide distribution range.
The pirated items include movies, music and video games, sunglasses, lotions and watches, clothing and shoes, appliances and spirits, El Pais reported. But other black market items include food, medicine, gasoline, building materials, cigarettes, fabrics, auto parts and toys.
Only 10 percent of that number is realized in legal imports, which totaled $59 million in 2013.
Dirección Nacional de Impuestos y Aduanas (National Tax and Customs Direction) former official Juan Ricardo Ortega said that clothing, gasoline and alcohol are the most smuggled goods -- a loss of hundreds of millions of dollars annually.
He also said that while the issues is being addressed by the government, the border -- with Venezuela and Ecuador -- is especially porous. Out of about 157 previously known openings, only about 30 remain between the borders with the two countries, he told El Pais.
The tariff procedures also need to be revamped, Orgeta said. There are loopholes that exist, allowing smugglers to claim lower tariff rates.
A guild president, Bruce McMaster, told El Pais that Colombia is too tolerant of smuggling and does not have the tools to fight it.
A new procedure to scan ports and revamp security would cost almost double the annual budget of the Financial Information and Analysis Unit in the country, he said.
Another part of the problem, and complacency, is that the smuggling networks provide jobs and are a work force 4 million strong, McMaster said.
This is the key because it keeps people with jobs, and if the smuggling routes are closed, there will be a steep increase in unemployment.
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