Regulatory News
August 13
Seven military police officers were sentenced to prison ranging from eight to ten years. They were accused of being part of a cigarettes smuggling scheme in Mato Grosso do Sul. The state is borders Paraguay, where shipments of the illegal product come in.

The police had been arrested in December. According to investigations, they demanded bribes in exchange for not reporting the crime; and if they did not receive the amount requested, they would even kidnap truck drivers with the contraband cigarettes to demand ransom.
July 31
The annual production of cigarettes in Paraguay is about 65 billion. Of this total, about 2.7 billion are consumed in the country and 5 billion are exported legally. The remaining - almost 57 billion cigarettes (or 87%) - is contraband. And the main market is Brazil.

According to a survey by the Brazilian Institute of Competitive Ethics, contraband cigarettes dominate 48% of the Brazilian market, representing a loss of R$9.7 billion (US$2.6 billion).
July 10
The Rio de Janeiro Civil Police carried out a major operation against a gang that forced merchants from the western zone of the city to resell contraband cigarettes from Paraguay. Twelve people were arrested, including one military police officer and three prison guards. Ten other accused suspects were not found.

The gang made about R$1.5 million (US$400,000) a month with the illegal trade. The criminals, who form a militia responsible for terrorizing the region, even threatened to kill the deputy commander of the investigation.

© 2007 CRE Brazil - All Rights Reserved.