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Smuggling report fuels Paraguay corruption concerns

Friday, May 28, 2021

Significance

The response from Tabesa and the finance ministry was disproportionately hostile. That may be linked to a much-delayed in-country review of illicit activities that is being conducted by Gafilat, the regional affiliate of the international Financial Action Task Force (FATF).

Impacts

  • The contraband cigarette trade is expanding the influence of Brazilian crime gangs in Paraguay.
  • Reports of tax evasion and money-laundering in the sector will draw renewed scrutiny of high-level corruption.
  • Failure to implement transparency measures will deter legitimate inward investment.

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