City Hall launches program to combat smuggling and piracy in partnership with Movement in Defense of the Brazilian Legal Market

The City Hall and the Movement in Defense of the Brazilian Legal Market, coordinated by the Brazilian Institute of Competition Ethics (ETCO) and the National Forum Against Piracy and Illegality (FNCP), launched this Friday (15) the Legality Movement. The program intends to intensify the fight against smuggling, counterfeiting and piracy in the capital of São Paulo, and it also takes place in partnership with more than 70 business entities and civil society organizations affected by these illegal practices.

The Legality Movement represents the union of forces between civil society and public authorities to build a more developed city, with a greater number of jobs, security, income, collection and focused on combating the illegal market. In addition to the City Hall, state bodies (military and civil police, Sanitary Surveillance, Procon and Ipem) and the Union (Federal Revenue, Federal Police, Anvisa and ANP) are part of the movement.

The city of São Paulo will be the first to adopt this project. With the support of the National Front of Mayors, other municipalities are expected to adopt this program in the coming months. The Legality Movement's activities will be divided into the following fronts:

• Restructuring of the Integrated Management Office (GGI), which brings together bodies from the City Hall, the State and the Union to debate and define strategies for actions on various topics, including consumer fraud and illegal trade.
• Creation of the Legal Market Defense Committee, linked to the GGI: it has the mission of identifying the centers of sales, distribution and deposits of illegal products, defining the actions of intelligence and combating illegal practices that generate losses to the treasury, consumer and legal and formal companies.
• Sustainable movement to take advantage of seizures and dispose of products: partnership with trade associations, third sector entities and public authorities to define the destination of seizures.
• Education of the trader on illegal practices, their impacts and threats to productive activities.
• Simplification of practices and attitudes that create barriers to commercial activity and encourage informality.
• Communication / media campaign to inform about these initiatives.

“We are going to simplify the life of the citizen and the entrepreneur so that everyone is within the law, without bureaucracy or legal uncertainty,” explained Paulo Uebel, Municipal Secretary of Management, about an ongoing project that gathers and simplifies the laws that deal with municipal attitudes - norms that aim to guarantee harmonious coexistence between citizens in urban spaces. In addition, the municipal departments of Urban Security and Regional City Halls will work together to expand the inspection and assessment of irregularities.

Losses generated by illegal trade

According to a survey carried out by the National Forum Against Piracy and Illegality (FNCP), in 2016, in São Paulo alone, smuggling, counterfeiting and piracy generated more than R $ 9 billion in losses in 16 productive sectors such as tobacco, clothing, fuels and cosmetics. With this loss, the city lost around R $ 4,5 billion in tax evasion due to the trade in illegal products, according to FNCP estimates.

The amount of R $ 4,5 billion lost in tax evasion, according to figures estimated by the FNCP, represents for the City of São Paulo the equivalent of the budget of social organizations for the management and administration of hospitals, UBS and doctors in 1 year or twice of the daycare budget also in 1 year or 15 years (180 months) of medicine purchases.

The losses also affect sectors such as the bakery. Per year, he loses R $ 56,7 million in revenue, according to data from SindiPan. The sector could generate up to 40 thousand new jobs if there were no illegal trade.

The main contraband product is cigarettes, with 35% of all markets currently dominated by illegal brands, mainly of Paraguayan origin. In 2016, 5 billion units of illegal cigarettes were sold.

In addition to financial damage, the illegal market fuels organized crime and finances drug and arms trafficking, increasing the rates of violence. Illegal products do not have quality control and do not follow Brazilian inspection, affecting the health of the whole society.

During the launch of the Legality Movement, the destruction of illegal products will be made, including CDs, DVDs, cigarettes, toys, among others, which pose serious risks to the health and safety of society, in addition to damage to the economy of City.

Also as part of the activities, the mini-exhibition “Cidade do Contrabando” (City of Contraband) will be presented in the hall of the City Hall, which simulates all possible improvements if smuggling and trade in illegal products were extinguished in the city and the money invested in favor of society.

“We are going to work together with the City Hall to combat the smuggling of products that affect and damage our city so much. The violence that is on the street and that frightens us is financed by these crimes. To fight against this is to fight for the life and dignity of the people of São Paulo. The city of São Paulo is taking the lead, but the time has come to join forces with all Brazilian municipalities in search of solutions for the illegal market ”, says Edson Vismona, president of the Brazilian Institute of Ethics in Competition (ETCO)

The Mayor of São Paulo, João Dória, the president of the National Front of Mayors and Mayor of Campinas, Jonas Donizette, the Deputy Secretary of Regional City Halls, Fabio Lepique, the President of the Parliamentary Front were present at the launch event of the Legality Movement. Fight against Smuggling, Federal Deputy Efraim Filho, ETCO President, Edson Vismona and former Minister of Development, Industry and Trade and also ETCO advisor, Luiz Fernando Furlan.