ALAC Coordinates efforts in favor of legality

 

Edson Vismona, president of ETCO and pro-tempore president of the Latin American Anti-Smuggling Alliance (ALAC), said today (7/05), that the organization that directs and integrates business chambers and government representatives, seeks to increase the increase in participation and commitment Latin American countries in the fight against smuggling.

During the V ALAC Meeting, which takes place between 7 and 8/05 in Costa Rica, Vismona, also said that “we are increasing the awareness of people and governments about the importance of cooperation and integration between countries to fight crime organized, which uses contraband resources for other illicit activities, clearly threatening public security ”.

According to data released during the ALAC, smuggling moves resources equivalent to 2% of Latin America's GDP, or about US $ 210,000 billion annually, affecting industries such as steel (metal-mechanics and steel), tobacco, hot drinks, medicines, cosmetics, plastics, footwear, textiles and cybersecurity.

This crime provides products smuggled to the markets, without regulations or controls, harming not only consumers but also governments.

According to Vismona, Central America must intensify joint efforts to eradicate smuggling, as Brazil, Paraguay, Chile and Argentina do.

"We hope to succeed in Central America in expanding integration between governments," he concluded.

Maria Carolina Uribe, president of the National Association of Industry of Colombia (ANDI), one of the co-organizers of the meeting, responsible for structuring a regional agenda to combat smuggling:

“Here in Costa Rica, we intend to unite the entire region around the problem of smuggling, working around the fundamental elements of illicit trade to combat it. When we started ALAC our focus was on the customs issue, then we moved to a judicialization and dismantling of criminal structures approach, “said Uribe.

In recent years, ALAC has worked on building a regional public-private agenda and sharing good practices.

The most smuggled product in the region is cigarettes, according to data from the organization.

The most recent study of illicit cigarette trade launched in 2017 by the Observatory on Illicit Trade of the National Chamber of Commerce and British American Tobacco Chile, shows the consumption rates of this illegal product and its main consequences, among them the exponential growth of “preference ”By the illegal product among consumers and a consequent loss due to tax evasion that reaches US $ 500 million per year.

In Argentina, contraband cigarettes generated, in 2017, an estimated loss of approximately 8.500 billion pesos in tax collection.

Contraband advances in Santa Catarina


In an article published in the newspaper Diário Catarinense, on 8/11, Edson Vismona, president of ETCO, talks about the problem of smuggling and what is needed to face it.

daily-caterinense

Contraband advances in Santa Catarina

 

 

Cigarette smuggling is now one of the most serious issues, and Brazil is one of the most affected by this illicit market.
To get an idea of ​​the extent of the problem, 22% of Santa Catarina's cigarette market is dominated by illegal brands.

This illicit trade directly affects tax collection, public policy development, consumer health and job creation in the state of Santa Catarina. However, the situation is even more serious. This is national security, as organized crime is dominating the borders of Latin American countries.

In this context, smuggling is no longer just a local concern and has taken on a continental dimension. It is estimated that every year in Latin America, between 0,9% and 2% of GDP is lost due to illegal trade. To try to find alternatives to fight these illicit acts, the Latin American Anti-Smuggling Alliance was created, composed of 15 countries.

The Alliance's first meeting was held in early October in Bogotá, the Colombian capital, to discuss and establish shared actions that allow greater control over the illegal trade in cigarettes, textiles, beverages, food, plastics and metals.
Based on the discussions, an action plan against illicit trade was formalized and presented during the 25th Iberoamerican Summit of Heads of State and Government, which was held in Colombia in late October.
One of the main causes for the increase in smuggling is the staggering difference in product prices, the result of absolutely unequal tax policies between countries. To try to reverse this scenario, it is necessary to calibrate the tax burden and combat the massive supply of illegal products.

By participating in the initiative of the Latin American Anti-Smuggling Alliance, we identified an opportunity for the countries involved to find ways to combat illegal activity, which does not respect borders, governments and police authorities.
Without coordinated work, we will hardly be able to overcome this great transnational challenge. Articles containing between 2.050 and 2.140 characters will be published in this space. Smuggling is no longer just a local concern and has taken on a continental dimension

 

Contraband advances in Campinas

In an article published on 28/10, in the Correio Popular de Campinas newspaper, the President of ETCO, Edson Vismona, talks about the first meeting of ALAC - Latin American Anti-Smuggling Alliance, the danger that smuggling poses, in addition to providing specific data on Southeast region.

Contraband advances in Campinas

by Edson Vismona

Cigarette smuggling is now one of the most serious issues and Brazil is one of the most affected by this illicit market. To get an idea of ​​the extent of the problem, 30% of the Brazilian cigarette market is dominated by brands from Paraguay, who enter the country without paying taxes, without generating jobs and still do not respect the rules of health surveillance.

Currently, 41% of the São Paulo cigarette market is dominated by illegal brands. Of the 10 best-selling brands in the state, two are from the illegal market, with the Paraguayan brand Eight leading the market with a 25% share of sales. In addition, the average price of the smuggled pack is R $ 3,00, an amount 60% lower than the legal minimum price for cigarettes in the legal market.

In 2015, the sale of contraband cigarettes grew by 18% in relation to 2010, which represented a tax evasion of R $ 748 million to public coffers, money that could have been invested in areas such as health, safety, housing, among others. public policy.

In Campinas the situation is also serious, since 37% of the cigarettes sold are smuggled from Paraguay. The city is also an important central point in the distribution of smuggled cigarettes in the State of São Paulo. Cities like Limeira, Tietê, Salto, Jundiaí, Bragança Paulista, among others, receive loads of contraband cigarettes from Campinas

This illicit trade directly affects tax collection, public policy development, consumer health and job generation in the state of São Paulo. However, the situation is even more serious. We are also dealing with national security, since organized crime, which feeds on smuggling, is dominating border regions in Brazil and in other countries in Latin America.

In this context, smuggling is no longer just a local concern and has taken on a continental dimension. It is estimated that each year in Latin America, between 0,9% and 2% of GDP is lost due to illegal trade. In order to try to find alternatives to fight these illicit acts, the Latin American Anti-Smuggling Alliance was created, composed of 15 countries: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Mexico, Panama, Paraguay, Peru , Uruguay and Venezuela.

The first meeting of the Alliance was held in early October in Bogotá, the capital of Colombia. Representatives of governments, civil associations, companies and trade unions in the member countries met to discuss and establish shared actions that allow greater control over the illegal trade in cigarettes, textiles, beverages, food, plastics and metals.

Based on the discussions, an action plan against illicit trade, covering several proposals evaluated at the meeting, will be formalized and presented during the XXV Iberoamerican Summit of Heads of State and Government, which will be held in Cartagena, Colombia, on the 28th and October 29.

It is worth remembering that one of the main causes for the increase in smuggling is the startling difference in the prices of products, the result of absolutely unequal tax policies between countries. While in Paraguay cigarettes pay taxes that do not exceed 16%, in Brazil this percentage can reach more than 80%.

In other words, the higher the tax burden on national products, the more competitive the illegal product becomes and the more the population suffers from the increase in crime, drug and arms trafficking.

To try to reverse this scenario, one of the measures proposed during the Alliance workshop is cooperation between countries for a tax calibration with the aim of reducing the enormous advantage that smugglers have over national industries. Another cause that must be tackled is the massive supply of illegal products. Intelligent coordination between countries is needed, with online information exchange and structured actions to control free trade zones and customs regimes.

By participating in the initiative of the Latin American Anti-Smuggling Alliance, we have identified an opportunity for the countries involved, including Brazil, to find common ways to combat illegal activity, which does not respect borders, governments and police authorities. Without coordinated work, with intelligence and mutual cooperation, we will hardly be able to overcome this great transnational challenge.

* Edson Vismona is president of the Brazilian Institute of Ethics in Competition (ETCO) and of the National Forum Against Piracy and Illegality (FNCP)

 

Smuggling does not respect borders and affects up to 2% of LA's GDP

Edson Vismona (*)

Illicit trade directly affects tax collection, public policy development, consumer health and job creation. However, the situation is even more serious, since we are also dealing with national security, since organized crime, which feeds on smuggling, is dominating the border regions of Brazil and other countries in Latin America.

As such, smuggling is no longer just a local concern and has taken on a regional-continental dimension. It is estimated that each year Latin America loses between 0,9% and 2% of its GDP due to illegal trade. In order to try to find alternatives in the fight against these illicit acts, the Latin American Anti-Smuggling Alliance, which is composed of 15 countries: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, Guatemala, Honduras, Mexico, Panama, Paraguay, Peru, Uruguay and Venezuela.

The first meeting of the Alliance was held in early October in Bogotá, the capital of Colombia. Representatives of governments, civil associations, companies and unions in the member countries met to discuss and establish shared actions that allow greater control over the illegal trade in cigarettes, textiles, beverages, food, plastics and metals.

Based on the discussions, an action plan against illicit trade - contemplating several proposals evaluated at the meeting - will be formalized and presented during the 25th Iberoamerican Summit of Heads of State and Government, to be held in Cartagena, Colombia, on the 28th and October 29.

 Today, cigarette smuggling is one of the most serious issues, and Brazil is one of the most affected by this illicit market. To get an idea of ​​the extent of the problem, in Brazil, 30% of the cigarette market is dominated by brands from Paraguay that enter the country without paying taxes, without generating jobs and without respecting the rules of health surveillance. In 2015 alone, this volume represented a tax evasion of R $ 4,9 billion to public coffers, an amount that could have been invested in areas such as health, safety, housing or even other public policies.

It is worth remembering that one of the main causes for the increase in smuggling is the amazing difference that exists between the prices of products - the result of absolutely unequal tax policies between countries. While in Paraguay cigarettes pay taxes that do not exceed 16%, in Brazil this percentage can reach more than 80%. In other words, the greater the tax burden on national products, the more competitive they become, which are illegal, and the more the population suffers from the increase in crime and the trafficking of drugs and weapons.

To try to reverse this scenario, one of the measures proposed during the Alliance's workshop was to establish cooperation between countries for a joint tax calibration. This movement is essential for combating the illicit trade of various products and can have significant effects in reducing the enormous competitive advantage that smugglers have over legally established industries.

Another cause that must be tackled is the massive supply of illegal products. In the case of Brazil and other Latin American countries, there is a shortage of agents - in addition to inadequate infrastructure in all squares and stations - to inhibit the entry and distribution of these products that move freely across border regions. Intelligent articulation between countries is needed, with an exchange of information online and also with structured actions to control free trade zones and customs regimes.

By participating in the initiative of the Latin American Anti-Counterfeiting Alliance, we identified an opportunity for the countries involved, including Brazil, to find common ways to combat illegal activities, which do not respect borders, governments and police authorities. Without coordinated work, with intelligence and mutual cooperation, we will hardly be able to overcome this great transnational challenge.

(*) Article published on UOL on 17/10

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Projects and Initiatives

Electronic invoice

We contributed to the design, implementation and improvement of the Electronic Invoice project, which began to take effect in 2006. The System improved inspection, reduced tax evasion and reduced costs for tax authorities and companies.

Inspection Support Systems

We help to develop mechanisms to control the manufacture of products with high tax evasion power, such as the Beverage Production Control System (Sicobe) and the Cigarette Production Control and Tracking System (Scorpios).

Member of CNCP - National Council for Combating Piracy and Intellectual Property Offenses

The National Council for Combating Piracy and Offenses against Intellectual Property (CNCP), a collegiate and advisory body of the Ministry of Justice, aims to develop guidelines for the formulation and proposition of a national plan to combat piracy, its tax evasion. arising and offenses against intellectual property.

Underground Economy Index

ETCO believes that knowing the size of the problem is critical to tackling it. Much is said, but little is known about informality, piracy and evasion, as, as illegal activities, they are difficult to measure. In a pioneering initiative, ETCO, together with the Brazilian Institute of Economics of the Getúlio Vargas Foundation (IBRE-FGV), annually publishes the Underground Economy Index, a study that estimates the values ​​of activities deliberately not declared to public authorities with the purpose of evading taxes.

To learn more about the Shadow Economy Index, please click here

Simplification of the Tax System

Convinced that the complexity of the Brazilian tax system is one of the factors that encourage tax evasion, ETCO has contributed with concrete suggestions for greater efficiency in the payment, inspection and tax collection system. Among these proposals are the federal, state and municipal cadastral unification; the principle of full anteriority, with main ancillary obligations defined until June 30 of the previous year, subject to regulatory taxes; and the simplification of procedures for registration and registration of companies.

Special taxation regimes

One of ETCO's suggestions culminated in the promulgation of Article 146-A, resulting from Constitutional Amendment No. 42/2003. The article foresees that States, the Federal District and municipalities, in addition to the Union, institute differentiated taxation systems in order to prevent competitive imbalances caused by the actions of individuals who use the reduction of their tax costs to gain spurious competitive advantages. ETCO acts with a view to the enactment of a complementary law, essential for the application of the article.

Union of forces for the legal market

We created, in partnership with the National Forum to Combat Piracy (FNCP), the Movement in Defense of the Brazilian Legal Market, which joins forces to act in a coordinated manner in the fight against smuggling, piracy, fraud and counterfeiting of products and defends border control actions. The Movement has the support of 70 entities. Within the scope of cities, also in partnership with the FNCP, we created the Legality Movement, which unites forces between civil society, city halls, the Federal Revenue Service, the Federal Police, parliament, state agencies and the National Front of Mayors to fight, effectively and forcefully the illegal market in Brazilian cities.

Studies, seminars and publications

We sponsor dozens of research, events and books on topics related to ethics, including the Culture of Transgressions in Brazil series, which brings together contributions from great Brazilian thinkers, including the sociologist and former President of the Republic Fernando Henrique Cardoso.

International operations

We are members of committees that fight transnational illicit practices that provoke unfair competition. In 2016, we joined the Latin American Anti-Smuggling Alliance (ALAC), which brings together civil society entities and government agencies from 15 Latin American nations in the search for joint actions to stop smuggling in the region; in 2017, we started to act in this direction also with the World Trade Organization (WTO).

Recognition of ethical companies

We are part of the management committee of Pró-Ética, a recognition program for companies committed to ethics in their relations with the public sector. Pró-Ética was created in 2010 by the Ministry of Transparency, Inspection and Controllership-General of the Union (CGU) in partnership with the Ethos Institute.

Ethics for young people

To strengthen the ethical principles in the training of Brazilian students, we created the Ethics for Young People project. The initiative developed and made available to high school teachers, at the address www.eticaparajovens.com.br, a series of pedagogical activities to deal with the theme with its students in a pleasant and engaging way, stimulating critical thinking.