Underworld Crossroads: Dark Networks and Global Illicit Trade in the Tri-border Area Between Argentina, Brazil, and Paraguay
Rashmi Singh and Jorge Lasmar
In February 2021, the Terrorism, Transnational Crime and Corruption Center (TraCCC) at George Mason University launched a project titled, ‘Hubs of Illicit Trade’ to study the select centers of illicit trade and illicit economies around the world. Four geographical centers were chosen for the first stage of this project, with an international team of experts heading the research for each location:
- Central America: Panama, Guatemala, and Belize
- South America: The Tri-Border Area (Argentina, Brazil, and Paraguay)
- Middle East: Dubai (UAE)
- Eastern Europe: Ukraine
The research on the Tri-border area (TBA) between Argentina, Brazil, and Paraguay was led by the authors and produced a comprehensive report titled, ‘The Tri-Border Area: A Hub of Illicit Trade with Global Impact.’[1] Overall, the project sought to map the ecology of the selected centers, identify their common and diverging features, and understand how the illicit economies of these hubs[2] promote harms with local, regional, and global reach and consequences. Thus, for each hub, the project explored the nature and key characteristics of the dominant illicit trades, the main actors involved, the central features of the enabling environment, and assessed the local, national, regional and international responses to the challenges and threats posed by the illicit trade activity.
Our work on the TBA between Argentina, Brazil and Paraguay began by first acknowledging that it represents only one of the many tri-borders of Brazil. Nonetheless, it was also obvious that this particular triple frontier played a pivotal role within the global illicit trade network. The TBA is characterized by an enormous diversity in illicit commodities flowing through it. As a result, our work chose to focus on the movement of drugs (marijuana and cocaine) as high-risk, high-reward commodities and cigarettes as a low-risk, high-reward product. Other products, such as guns, electronics, alcoholic beverages, toys, food items, pesticides etc. were significant, but purposefully left out of our study.
The Tri-border Area (TBA). Source: https://alchetron.com/Triple-Frontier
Our research discovered that the TBA as a hub is characterized by a particular combination of isolated, porous and hard-to-monitor international borders alongside the presence of three key urban centers (Puerto Iguazú in Argentina, Foz do Iguaçu in Brazil and, Cuidad del Este in Paraguay), an impressive infrastructure of roads and three international airports that connect it to main cities across the Mercosur and the rest of the world. This peculiar combination makes it particularly attractive for both licit and illicit trade, and the region represents a source, transit point and destination for a wide variety of legal and illegal goods and services. In fact, perhaps the most striking feature of the region is the near seamless interaction between the licit and illicit markets that not only co-exist in the same space but use the same infrastructure (hard, soft, critical and human) and benefit from the same sets of enabling features.
The region exhibits clear crime convergence and poly-criminality. In other words, different organized criminal groups (OCGs) use the same routes, modes of transportation, modus operandi and often even middlemen and entrepreneurs for engaging in different illicit trades at the same time. Frequently multiple illicit goods are smuggled to/via/from the TBA as part of the same shipment, albeit with different final destinations. Illicit goods, like arms and drugs, are often hidden amongst and moved with the huge flux of licit cargo that traverses this hub. Furthermore, there is a huge diversity in the OCGs involved with trafficking in this region. Some are local or regional players while others have global reach, either independently or via alliances forged with global mafias and mafia-like groups. The case of the Brazilian Primeiro Capital Command (PCC) is a case in point. The PCC has increasingly asserted control over the cocaine market in the TBA and so-called Southern Route which takes cocaine from the Andean countries to the region’s key seaports like Paranaguá, Itajaí, Santos, Buenos Aires and Montevideo and then further afield to Africa, Europe and beyond. However, the PCC’s alliance with groups like the Italian ‘Ndrangheta has not only allowed it to consolidate its hold over the cocaine market in Brazil and the TBA but also expand its reach and presence into Africa, Europe and beyond. In turn, the ‘Ndrangheta’s alliance with the PCC, in a perfect marriage of convenience, has allowed it direct access to the cocaine coming out of the Southern Cone countries.
Each group controls one side of the cocaine flow ensuring there is no risk of competition. In other words, dynamic alliances forged between local, regional and global OCGs function as capacity and reach multipliers for all the illicit groups involved. For instance, the alliance between the PCC and the ‘Ndrangheta has strengthened both groups, with the PCC earning more than US $1 billion annually and the ‘Ndrangheta in control of almost 80% of all cocaine entering Europe and boasting an estimated net worth of US $72 billion in 2021.[3] These same structures and vulnerabilities are also exploited by known terrorist organizations, such as Hezbollah, with the result that the region is also characterized by the convergence of key criminal and terrorist networks.
Illicit flows in the region are also facilitated by the presence of an extremely complex enabling environment. Thus, in addition to its very particular geographical setting, the TBA is characterized by the presence of two free trade zones (FTZ) that serve to facilitate illicit production and trans-shipment.[4] Poor governance and corruption at all levels of the public and private sectors create an environment of impunity and grant protection to illicit traders and corrupt government officials. Varying degrees of chronic economic instability along. with local market characteristics, like the use of front-companies, deficiencies in customs monitoring and inspections and a cash-intensive economy which facilitates money-laundering, all combine to blur the lines between the white, grey and black markets in the TBA, thereby further enabling illicit trade. The result is that the hub suffers from higher-than-average levels of violence, including homicides, and the consequences of this criminality ripple outwards across the region. While there are key differences in the three main urban centers and countries that make up this hub, primarily because of differences in legislation, accessibility and the policing of human and commercial flows, all parts of the TBA are strongly linked to legal and illegal international trade networks. Finally, our research also clearly demonstrated that Paraguay, with its hugely permissive security and legislative environment, functions as the linchpin for much of the illicit trade in this hub.
Routes
In general, illicit and contraband goods cross the international borders comprising the TBA using a combination of land, air, and water transport routes. Given the vast and intricate fluvial system in this region, Argentina, Brazil and Paraguay all have a naval presence in the TBA.
The fact that Paraguay, as a land-locked country, maintains a navy specifically for the TBA is evidence enough of how important it is to monitor the vast river network and the security risk that characterizes this region. The best way to understand the key routes and modes of transportation utilized in the TBA is to visualize it as a series of expanding concentric circles.
The focal transportation point is the formal river crossings as represented by the Puente de la Amistad (the Friendship Bridge) across the Paraná River between Brazil and Paraguay, and the Puente Tancredo Neves (the Fraternity Bridge) across the Iguaçu River that flows between Brazil and Argentina. However, even these so-called formal crossings are poorly monitored, partly as a result of the state turning a blind eye and/or deep-seated corruption and partly because of an acute lack of state resources which, when combined with the tremendous flux of goods, vehicles and people that move across these bridges, renders them deeply vulnerable. For instance, anywhere between 30,000 to 40,000 people and 20,000 vehicles cross the Puente de la Amistad daily, with less than 10% of personal baggage or vehicle loads being inspected. Customs also tends to be enforced by the Brazilian side with the Paraguayan government willfully ignoring the rampant smuggling across the bridge. While the crossing between Brazil and Argentine is more tightly regulated, it is also characterized by a high flow of people which again makes monitoring the movement of illicit goods hugely challenging.
Cuidad del Este. Source: Google Maps
The permeability of the formal border crossings in the TBA, especially between Brazil and Paraguay, are but a minor illustration of how incredibly porous the informal crossings are. The frontier, especially along the Paraná River and the Itaipú dam reservoir, is densely forested and dotted with innumerable inlets which house countless clandestine ports and lookouts, often operating in plain sight of the authorities from both countries. Lake Itaipú functions as a smuggling hive not only because it acts as a natural border between Brazil and Paraguay but also because its sheer size makes close fluvial monitoring and control challenging, if not impossible. The forests surrounding the lake allow smugglers to conceal their illicit merchandise before transporting them across the many sprawling, poorly monitored private farms that surround the lake, onto national highways that give them access to key urban centers or to clandestine airstrips peppered across the region.
In some cases, as in Argentina, the rivers offer easier access to the rest of the country and are therefore the favored means of transport. In all cases, the network of clandestine ports and airstrips used for trafficking illicit goods is augmented by the state-based infrastructure of roads, bridges, airports, ports and large boats/ships.
The TBA is connected by this covert and overt transportation infrastructure to some of the largest and most important seaports across Latin America, including the Brazilian ports of Santos and Paranaguá, the Argentinian port of Buenos Aires, and to Montevideo in Uruguay. This corridor between the TBA and these seaports is an important element of the dynamics of illegal flows in Latin America.
Illicit goods, especially cocaine, make their way from Southern Cone countries, often via the TBA to these ports and onwards to Europe, America and other markets. Containers are often contaminated at seaports, although as security is increasingly tightened this dynamic is shifting to contamination at sea or even as containers are being transported on highways. This threat of inland contamination was critical enough for shipping giants MSC and MEDLOG to announce that they would suspend their inland operation in January 2022.[5] Similarly smuggled goods, such as counterfeits, make landfall at these seaports before being transported inland to the TBA using the same combination of air, land and water routes. This dynamic is evident in all three countries of the TBA—Argentina, Brazil and Paraguay—although Paraguay also stands out for the large quantities of illegal goods that arrive via the Silvio Pettirossi Airport of its capital city, Asunción. The Paraguay River, which passes through Asunción, serves as a key artery for smuggling goods, especially to the south into Argentina. The deep-seated corruption in the country has allowed Asunción to emerge as a key transit hub for arms, drugs and other illicit goods, which make their way through Paraguay and into Brazil, Argentina and the rest of the world.
Key Actors in the TBA
While many criminal organizations, mafias, mafia-like groups and other illicit actors have ties to/or presence in the TBA, their existence, reach and capabilities are tremendously dynamic, and ebb and flow with time and changes in broader patters of illicit flows. In all cases, the relationships between different groups—of alliance or competition—are also opportunistic and vary over time. Turf-wars between rival factions are common, with the result that the cities and towns on all sides of the TBA are characterized by some of the highest homicide rates, both in their respective countries and the region more generally.
All key OCGs from Argentina, Brazil and Paraguay operate in the hub. There is also a continuous ebb and flow of regional and international mafias and mafia-like groups in the region. In fact, most key international OCGs have direct presence or some level of representation in the TBA. In general, and based on their composition, illicit actors in this region can be distinguished into four key categories:
- Criminal groups made up of exclusively Paraguayans.
- Groups that are led by non-Paraguayans which then becomes a key determinant of their identity (e.g., Chinese, Bangladeshi, Nigerian, Colombian, Serbian, etc.).
- Groups that are identifiable by their name, irrespective of the nationality of their leaders and/or members (e.g., the PCC and CV).
- Freelancers and entrepreneurs, who are individuals who participate in illegal activities in the region without formally being part of any OCG.
The criminal groups made up of exclusively Paraguayan are sometimes composed of local families and/or police and military personnel, in which case they are referred to as clans. Some clans in the TBA are composed of local, uniformed security forces and are notorious for selling protection and leverage to criminal groups in the region as well as for their deep connections with the political establishment, which grants them virtual impunity to support and participate in a range of illicit activities. Research conducted in 2022 identified a total of five local family clans and two clans composed of security forces in Cuidad del Este.[6]
Groups led by non-Paraguayans in the region are often referred to as ‘mafias’, although this is an inaccurate term, and they are better categorized as mafia-like groups. Over the last 20 years, non-Paraguayan OCGs operating in this hub include groups from Bangladesh, Chile, China, Colombia, Corsica (France), Côte d’Ivoire, Ghana, Italy, Japan, Korea, Lebanon, Libya, Nigeria, Peru, Russia (mostly Chechen), Serbia, Taiwan and Ukraine. One of the most powerful groups in the region at the moment, identifiable by name, is the Brazilian Primeiro Commando da Capital (The First Capital Command or the PCC) which is slowly taking control of the penitentiaries in the region and is heavily involved in moving Paraguayan marijuana as well as cocaine from Colombia, Bolivia and Peru into Brazil and beyond, through the TBA. Comando Vermelho (The Red Command) is the second most powerful Brazilian group operating in the hub, although other smaller groups like Brazil’s Bala na Cara (BNC), Primero Grupo Catarinense (PGC), and the Paraguayan Rotela Clan are also prominent operators. In addition to being involved in drug smuggling and gun running, these groups are also associated with a host of other illegal activities, including money laundering, counterfeiting, bank heists, and extortion. The Rotela clan controls a significant proportion of the drug trafficking both inside and outside the prison system in Paraguay, potentially making it the only criminal group capable of confronting the PCC’s expanding control of Paraguay’s penitentiaries.[7]
The final category of freelancers and entrepreneurs often refer to individuals who belong to the region and take advantage of the opportunities offered by the criminal economy in place to make a living. On occasion, they leverage social and/or familial links with corrupt state officials to facilitate their illicit activities. At other times, they are hired because they can access areas and/or services that help with smuggling. They can be found on all sides of the borders in the TBA and extend well beyond the region. They are undoubtedly a key component of the criminal enterprise in this hub. The Brazilian Federal Police’s 2022 Operation Tupp is an excellent example of how freelancers facilitate illicit activities in and beyond the TBA. The operation investigated a criminal group that used small, modified aircrafts to transport cocaine both within Brazil as well as to other countries. The criminal network involved a host of actors including pilots, merchants, businessmen and freelancers, with freelancers responsible for acquiring and modifying the planes that were used for transporting the drugs as well as, in some cases, for identifying and hiring the pilots along with fraudulently registering the aircrafts purchased.[8]
A final notable category of actors in the TBA that deserve a mention are those that are linked to the state. In other words, these are corrupt politicians or individuals linked in some form to the state’s national or regional governance structures. They can be customs or judiciary officials, members of the military or police as mentioned previously, or officials in other government departments. Perhaps the most notorious example of this category is Paraguay’s former president, Horacio Cartes, who is allegedly the region’s largest producer of illicit tobacco with his company, Tabesa, responsible for just under 50% of the contraband tobacco sold in Argentina and Brazil.[9] The presence of these corrupt political actors in the TBA helps facilitate the operation of OCGs and terrorist organizations in the region by bribing judges, purchasing forged documents and engaging in any number of illicit activities, including those that overlap with legitimate economic undertakings. These overlaps between the illicit actors and dirty politicians have generated an environment characterized by political protection and impunity from justice, which have over time led to the steady degradation of the democratic rule of law in the TBA.
The Crime-Terror Nexus
The crime-terror nexus is a controversial topic when discussing the TBA primarily because all three countries diverge considerably in their classification of terrorism and terrorist organizations. Having said that, while all three countries have a history of denying the presence of various terrorist groups in the region, organizations like Interpol, the US Treasury, and Department of State have long claimed the existence of links between proscribed terrorist groups and the TBA. Most of the time, these links are ideological and/or financial, although the hub has also long been connected to the operational planning of several terrorist attacks in the region, including the infamous 1994 Argentine Israelite Mutual Association (AMIA) bombing in Buenos Aires.
As in the case of organized crime, it is the very particular geographical, economic and social makeup of the TBA that also makes it vulnerable and attractive to terrorist organizations. As a result, there is evidence that various insurgent and terrorist organization either move through and/or operate directly or indirectly in the area. The Colombian FARC, for instance, has been long entrenched in the illicit economy of the TBA, not only through arms and drugs smuggling but also thanks to direct links with other groups operating in this area. Thus, FARC has been linked to the Partido de Patria Libre (Free Fatherland), the extremist group that was associated with the 2005 abduction and murder of Cecilia Cubas, the daughter of the former Paraguayan Vice-President, Raúl Cubas.
Hezbollah, as another example, also has long-standing ties to the area and its members are able to camouflage their presence and nefarious activities by embedding themselves within the substantial Arab community that resides here. Thus hidden, they can take advantage of the thriving black-market economy that already exists in the TBA. There are some estimates that the Lebanese Hezbollah earns over US $6 billion annually via foreign remittances. The TBA is an area clearly identified as one such source of remittances and a substantial percentage of these remittances in this area can be linked back to illegal activities, ranging from the smuggling of duty-free products, arms smuggling, drug trafficking, counterfeiting and money laundering.
In recent years, several Hezbollah-related cases have emerged out of the TBA. For instance, the case of the Barakat network, allegedly led by the notorious Assad Ahmad Barakat, the personal representation of Hezbollah’s leader, Hassan Nasrallah. Assad Ahmad Barakat had been on the US Department of Treasury’s list of terrorist financers since 2004 and identified by the Paraguayan Anti-Terrorism Department as one of the key fundraisers for Hezbollah in the TBA. On the run for over a decade, he was finally arrested by the Brazilian police in Foz do Iguaçu in 2018. Assad Ahmad Barakat was linked to DVD piracy, general piracy, counterfeiting, drug trafficking, racketeering, illegal gambling and extortion. The Barakat network as a whole was involved with money laundering, hawala and document fraud in the region with reports stating that they transferred approximately US$20 million to the Lebanese Hezbollah annually. The network was also linked to the 1994 AMIA bombings and various members of the family were implicated and/or extradited to the United States under accusations of possessing Hezbollah propaganda or for engaging in drug trafficking, money laundering and trade-based money laundering (TBML) and then remitting the funds acquired to Hezbollah, either directly or via a Hezbollah related tax haven in the Caribbean.[10]
The crime-terror nexus in the TBA is not only represented by the involvement of proscribed terrorist organizations in illicit economic activities but also by dynamic strategic alliances with OGCs already active in the hub. We know, for instance, that the Brazilian PCC and CV maintain strategic ties with Hezbollah and its sister organizations in the TBA. There are also reports of cooperation between Hezbollah and Mexico’s Los Zetas and the Sinaloa Cartel, Colombia’s El Envigado and FARC, and with the Venezuelan Los Soles.[11] There are also reports of collusion between Hezbollah operatives in the TBA and the business elites of this region, especially in relation to the movement of illicit cigarettes out of the area. As stated previously, while much of the crime-terror nexus manifests as financial and/or ideological support there is also evidence linking the TBA to the operational planning and execution of terrorist attacks.
The recent 2023 case of Operation Trapiche is worth mentioning in this regard. Launched in early November 2023 by the Brazilian Federal Police (PF), the early stages of the operation led to the arrest of three Brazilian citizens and the PF issuing international arrest warrants for two additional suspects. All suspects were under investigation for their alleged association with Hezbollah and for plotting attacks against Jewish community targets within Brazil under Hezbollah’s directives. As the investigations proceeded, suspects across Brazil emerged as did their links to the TBA and Paraguay. For instance, once suspect received attack instructions from a WhatsApp number from Paraguay. Another key suspect was already under investigation before Operational Trapiche was officially launched for financing Hezbollah-related terrorist activities though smuggling electronic cigarettes into Brazil via the TBA[12] It is believed that the routes and modus operandi for smuggling these electronic cigarettes into Brazil is the same as that used for drugs and illicit white cigarettes (known as ‘illicit whites’). that are legally produced in one country and then smuggled into other markets.
Cocaine, Marijuana and Cigarettes and the TBA – A Threat Overview
While we were able to outline the broad characteristics of the cocaine and marijuana trade in this hub it was very difficult to provide a reliable estimate of the volume and value of this trade.
- Cocaine and the TBA
Cocaine tends to be produced in the Andrean countries (Colombia, Bolivia and Peru) and Paraguay functions as a key transit point for moving this drug into Brazil, Argentina and Uruguay often, although not exclusively, through the TBA. For example, cocaine moves across Brazil to its key seaports from not only the TBA but from all the regions bordering Bolivia, Peru and Colombia. Brazil, Argentina and Uruguay function as both final destinations and transit points for this cocaine. Brazil and Uruguay especially, have emerged in recent years as a key source for large shipments of the drug destined for Europe, Africa and the rest of the world. Brazil is also emerging as a growing market for cocaine consumption. Our research clearly illustrated that cocaine functions as a key driver of organized crime in this region. It also facilitates corollary crimes like corruption, homicides, money laundering, fraud and contributes to an escalating cycle of lethal violence by OCGs and security forces in the region.
The TBA’s critical role in cocaine smuggling seems to be linked to the increasing role of the PCC in the hub and its control of not only the regional trade but also traditional land transportation routes, especially of the Southern Route. When combined with PCC’s existing control of key seaports and coastal cities in Brazil, this shift has led to an exponential increase in container shipments and contamination. Argentina’s and Uruguay’s seaports are also increasingly being exploited for cocaine shipments, with local criminal groups involved and brokering deals with larger regional and/or global entities, like the PCC and ‘Ndrangheta. The overall result has been a steady uptick in the overall quantities of Andean cocaine transported into Europe and other parts of the world.
- Marijuana and the TBA
The marijuana that passes through this hub is produced locally in Paraguay for regional consumption, and Brazil and Argentina provide the largest markets for this illicit flow, with around 80% of all marijuana produced moving into Brazil [13]. While Paraguay is the largest producer of marijuana in South America today, less than one percent of its own population consumes the drug, which is deeply stigmatized and socially sanctioned.[14] It should then not come as a surprise that almost 94% of all of Paraguay’s cannabis farming is concentrated in the northeast of the country along the 438 km dry border with Brazil.[15]
The marijuana business in this region has fragmented over time and is run today by hundreds of small and mid-sized groups. These groups benefit from links to corrupt local authorities and the business elite of the region who are often involved in the production and trade of the drug. As most of the marijuana produced in Paraguay is exported to its immediate neighbors (Brazil, Argentina, Bolivia, Chile and Uruguay), its transport is characterized by so-called ‘ant trafficking,’ whereby small amounts of the drug are moved by individuals using whatever limited means they have at their disposal—bicycles, motorcycles and even carried in bag-packs by individuals on foot. More recently, there is some evidence that Brazilian OCGs like the PCC and CV are trying to control cannabis cultivation in the region in addition to seeking to dominate the wholesale market. Both groups work with a series of networks and individuals to sell the cannabis. There is evidence to suggest that the PCC is heavily involved in moving marijuana from the TBA into Brazil using both air and land transport. More recently, a number of concealed marijuana plantations have also been discovered in the north of Argentina, in the province of Misiones which borders Paraguay. It has been argued that OCGs are experimenting with growing the drug on the Argentinian side of the TBA to avoid having to move it across frontiers which are marked by increasingly tighter surveillance and controls.
- Tobacco and the TBA
Finally, Paraguay, and especially its side of the triple frontier, is notorious for its central role in the illicit tobacco trade in Latin America. Known for its multitude of knockoffs of well-known cigarette brands, Paraguay produces at least 65 billion cigarettes annually but consumes a mere 2.5 billion cigarettes per year.[16] The rest are smuggled to countries across Latin America where the higher taxes levied on tobacco products allows smugglers to successfully undercut the legal market. In other words, the illicit trade in tobacco is one of the main and most lucrative illegal practices in Paraguay, and one with far-reaching impact. The tobacco business in Paraguay has an annual estimated worth of more than 4.5 billion dollars. Reports suggest that 90% of all cigarettes produced in Paraguay enter the black market. This represents a whopping 20% of the illicit trade in cigarettes worldwide.[17]
Tabacalera del Este (also known as Tabesa) and its main distributor, Tabacos del Paraguay, dominate the black-market in Paraguayan cigarettes. They are a family-run operation of the former president, Horacio Cartes, and allegedly produce cigarettes for both legal export as well as for illegal smuggling, although this has been consistently denied by the company. The TBA is central to Paraguay’s cigarette smuggling operations with at least four major smuggling routes radiating out of this hub leading to Brazil, the USA, destinations across Central America and the Caribbean, and finally across the Atlantic and into Europe and beyond.
Given the authorities’ focus on drugs and arms smuggling, tobacco products are seen as a low-risk, high-reward enterprise by OCGs, carrying lower risks of imprisonment with shorter sentences but still promising lucrative profits. As a result, there is a trend of OCGs becoming increasingly embroiled in tobacco smuggling to make quick money which is oftentimes re-routed into buying arms and drugs.[18] This diversification is not benign and carries clear risks to public health and a state’s economy. Furthermore, the illicit trade in cigarettes not only uses the same logistics and routes as arms and drugs trafficking but there are also clear intersections that exist between cigarette smuggling and crimes like embezzlement, counterfeiting, arms and drugs trafficking, with the same individuals simultaneously engaged in several of these activities.[19] At the same time, it is interesting to point out that seizures across Latin America are increasingly finding large quantities of contraband cigarettes originating in China. This seems to suggest that Chinese OCGs may be infiltrating the established trade in the continent. This would also suggest rising competition between traditional local criminal, mafia-like groups and groups from outside the region that are trying to penetrate the market.
Conclusions and Policy Recommendations
Our project demonstrated the critical role of the TBA within the global illicit trade network. Its geographical location, the presence of isolated, porous, difficult-to-monitor borders combined with the presence of urban centers and a well developed infrastrucutre of roads and airports all make the TBA an optimal base of operations for criminal entities. The criminality of the region is further faciliated by the presence of a diverse set of licit and illicit actors and an enabling environment characterised by corruption, money laundering, the presence of free trade zones, proximity to zones of cultivation and/or manufacturing centers, high-volumes of products that move through the region and a heavily cash-intensive local economy. As a consequence, several interconnected criminal markets originate, transit through, or terminate in the TBA making it a enormously complex hub of illicit trade where the lines between the white, grey, and black markets are often incredibly blurred.
We also found that both organised crime networks and terrorist groups in the region are highly globalised and have the capacity to coordinate their activities on a global scale. The high rates of innovation in tactics, capabilities, and information sharing of these networks allow them to rapidly adapt to change, and quickly counter state responses. OCGs that operate in the TBA are also increasingly heterogeneous and often include a number of diverse actors, making them strucutrally more fragmented and complex. Their networked globalised structure also encourages the outsourcing of criminality and increasingly interfaces with local markets and players. Given this dynamic and complex reality our key policy recommendation is the need for a focused intelligence gathering effort and a patient, long-termed, intelligence-led inter-agency response. This would be a collaborative, whole-of-society approach involving not only diverse governmental institutions but also the active participation of the private sector, NGOs, and individuals. There is plenty of truth in the cliché that networked threats require networked responses. Consequently, appropriate policy measures to address the complex threat matrix of the TBA must involve and coordinate local, national, regional, and international responses. ___________________________________________________________________
Endnotes
[1] Rashmi Singh and Jorge Lasmar, The Tri-Border Area: A Hub of Illicit Trade with a Global Impact. Terrorism, Transnational Crime and Corruption Center (TraCCC), George Mason University (2024).
[2] Hubs of illicit trade can be defined as geographic areas that possess several key characteristics, including: “a high concentration of illicit flows of commodities and services and with a strong presence of criminal actor and a wide range of other enablers, often from the legitimate economy who provide supportive activities for illicit transactions”. It is worth remembering that while hubs may share many common characteristics, they also differ from each other due to attributes that are particular to each location. “Hubs of Illicit Trade: Project Summary.” Terrorism, Transnational Crime and Corruption Center (TraCCC), George Mason University. May 2023, https://traccc.gmu.edu/wp-content/uploads/2023/05/Hubs-of-Illicit-Trade-Executive-Briefing-19052023-FINAL.pdf
[3] Douwe den Held, “Cocaine Brokers: The Flexible Backbone of the ‘Ndrangheta Trafficking Empire.” InSight Crime. 23 November, 2022, https://insightcrime.org/investigations/cocaine-brokers-flexible-backbone-ndrangheta-trafficking-empire/.
[4] It is worth noting that Free Trade Zones are increasingly being identified as a key emergent threat in the financial sector. Daniel Neale, “Free Trade Zones: A Pandora’s Box for Illicit Money.” Global Financial Integrity.7 October 2019, https://gfintegrity.org/free-trade-zones-a-pandoras-box-for-illicit-money/.
[5] Anonymous Interview 2.
[6] Juan Martens, Roque Arnalso Orrego, Ever Villalba, Ricardo Veloso, Luís González, and Francisco Delgado, “Terror and the Social Accumulation of Fear: Criminal Governance in Three Paraguayan Border Cities with Argentina and Brazil.” Dilemas: Revista de Estudos de Conflito e Controle Social. Special Issue 4, 2022: pp. 233–60, https://doi.org/10.4322/dilemas.v15esp4.52507.
[7] “¿Qué es lo que se sabe sobre el clan Rotela?” Ultima Hora. 17 June 2019, https://www.ultimahora.com/que-es-lo-que-se-sabe-el-clan-rotela-n2826203.html.
[8] Patricio Reis and Ana Paula Rehbein,, “Quadrilha suspeita de adaptar aviões para o tráfico internacional trabalhava como freelance para traficantes, diz PF.” Globo (G1). 31 March 2022, https://g1.globo.com/to/tocantins/noticia/2022/03/31/quadrilha-suspeita-de-adaptar-avioes-para-o-trafico-internacional-trabalhava-como-freelance-para-traficantes-diz-pf.ghtml.
[9] Benoît Gomis and Natalia Carrillo Botero, “Sneaking a Smoke: Paraguay’s Tobacco Business Fuels Latin America’s Black Market.” Foreign Affairs. 5 February 2016, https://www.foreignaffairs.com/articles/paraguay/2016-02-05/sneaking-smoke; Vanessa Neumann and Stuart Page, “The Many Criminal Heads of the Golden Hydra.” Counter Extremism Project. May 2018, https://www.counterextremism.com/sites/default/files/The%20Many%20Criminal%20Heads%20of%20the%20Golden%20Hydra%20%28May%202018%29.pdf.
[10] Matthew Levitt, “Hezbollah’s Criminal Networks: Useful Idiots, Henchmen, and Organized Criminal Facilitators,” Chapter 7 in Beyond Covergence: World Without Order. Hilary Matfess and Michael Miklaucic, Eds. Washington, DC: National Defense University, NDU Press 2016, pp. 155–178; Pablo A. Baisotti, “The Triple Border: A Crimal Haven.” Small Wars Journal. 12 November 2021, https://smallwarsjournal.com/jrnl/art/triple-border-criminal-haven.
[11] Florencia Montaruli, “Tip of the Iceberg: Hezbollah’s Narco-Terrorism in Latin America Exposed.” IranWire.7 April 2021, https://iranwire.com/en/features/69307/.
[12] Maria Zupello, “Joint Mossad-Brazilian Police Op Foils Hezbollah Attacks on Jewish Community in Brazil.” The Investigative Project on Terrorism. 9 November 2023, https://www.investigativeproject.org/9350/ipt-exclusive-joint-mossad-brazilian-police-op; Anonymous Interviews 15 and 16.
[13] Max Radwin, “Drug Production Is Booming in Paraguay, and so Is Drug Violence.” Washington Post. 17 August 2017, https://www.washingtonpost.com/news/worldviews/wp/2017/08/17/drug-production-is-booming-in-paraguay-and-so-is-drug-violence/.
[14] The Organized Crime Index, https://ocindex.net/.
[15] Juan Alberto Martens, “Entre grupos armados, crimen organizado e ilegalismos: actores e impactos políticos y sociales de la violencia en la frontera noreste de Paraguay con Brasil,” Revista sobre acceso a Justiça e Direitos Humanos nas Américas. 2019: pp. 65–87, https://repositorio.conacyt.gov.py/xmlui/bitstream/handle/20.500.14066/2479/PINV15-151.pdf?sequence=1&isAllowed=y.
[16] Felipe Umaña, “Revisiting the Crime-Terrorism Nexus in the Tri-Border Area” (The Fund for Peace, 2012); Op. Cit., Gomis and Botero “Sneaking a Smoke” at Note 9.
[17] Stanislaw Kosmynka, “The Problem of Organized Crime in the South American Tri-Border Area: Paraguay, Brazil and Argentina.” International Studies. Vol. 25, no. 1. 2020: pp. 9–28, https://doi.org/10.18778/1641-4233.25.02.
[18] Anonymous Interview 6.
[19] “Relatório Anual 2021 Do Conselho Nacional de Combate à Pirataria.” Brazil: Ministério da Justiça e Segurança Pública, 2021, https://www.gov.br/mj/pt-br/assuntos/sua-protecao/combate-a-pirataria/relatorio-anual/relatorio-anual_final_-2021-editorado.pdf.