Mexico’s Sinaloa cartel turns to TBML to launder money and avoid tariffs

Mexico’s powerful Sinaloa drug cartel used trade-based money laundering (TBML) techniques in Colombia to clean up its illicit earnings while managing to avoid tariff payments in the process too, according to press reports.

Colombia’s Portafolio newspaper recently reported that Sinaloa worked in cahoots with one of the world’s largest contraband gangs to launder some of the drug mafia’s billions of US dollars in estimated annual revenues.

Fewer checks

While tariffs are imposed on most textiles imported into Colombia, the country has a free trade agreement (FTA) with Mexico.

This means that textiles from Mexico are exempt from tariffs and there are few checks on imports crossing the two countries’ border.

This allowed the drugs cartel to order the contraband traffickers to purchase textile products with illicit funds and ship them into Mexico before re-exporting them to Colombia.

Free trade advantage

Typically, the goods would be bought from countries Mexico has one of its 12 FTAs with.

These include agreements with most countries in the Western Hemisphere including the US and Canada as well as neighbours such as Chile, Colombia, Costa Rica, Nicaragua, Peru, Guatemala, El Salvador, and Honduras.

Tariff avoidance

In addition, Mexico has negotiated FTAs outside of the Western Hemisphere and entered into agreements with Israel, Japan, and the European Union.

Once goods have been imported into Mexico, they are then re-exported to Colombia, thus allowing the group not only to launder illicit earnings but also avoid paying tariffs in the process of doing so.



Categories: Trade Based Financial crimes News