Tag Archives: drugs

Mexico, drugs and teddy bears

The Los Angeles Times reports that the owners of a Los Angeles toy company that made teddy bears were sentenced to federal prison terms Tuesday for their roles in helping launder drug money for Colombian and Mexican traffickers. From the LA Times:

“The U.S. attorney’s office said the company had twin reputations – as a manufacturer of plush toys and as an international leader in laundering dirty money.

The toy company, federal prosecutors said in a statement, was part of the so-called “Black Market Peso Exchange,” which trades drug money in the United States for “clean” Colombian pesos through the international purchase and shipment of goods.”

The circle of drugs and money flowing back and forth across the Rio Grande is thriving, one that feeds the U.S. hunger for drugs and Mexico’s for guns and of course money.

With U.S. inspectors focused primarily on what’s coming into the U.S. rather on what’s going out, the odds are fairly good that huge lots of drug money can be smuggled across the border.

Jonathan Winer, Deputy Assistant Secretary of State for International Narcotics Matters in the Clinton Administration, explains how money launderers devise ways to get drug money into Mexico from drug sales.

“The secret of the ‘Black Market Peso Exchange’ is that the currency doesn’t have to move across the border. It can stay put. What they can do instead is they can go to an electronics dealer or an appliance dealer or a car dealer and say, ‘Here’s a bunch of currency. Let me buy a lot of electronics from you or cars or appliances,’ and the dealer says, ‘Great. Now you deliver that stuff down into Mexico for me and we will sell it down there and generate pesos.’ I never have to move the money. When I am getting pesos for those goods, which I now own, that’s clean money. We know what I generated those pesos for… I am in the automobile business now. I am in the electronics business. I am in the appliance business.”

From the outside, those businesses look fully legit, and it’s not so easy for U.S. authorities to follow the trail of drug money once it’s been converted into cars or TVs. Money launderers are using a variety of other ways to clean and transport money south of the border, whether through stored-value cards or the small money transfer houses that migrant workers use to send remittances back home.

Read more from America Abroad’s report from the El Paso-Juarez border »

Counterfeit drugs pose threat in India

In many countries the rationale for combating counterfeit products, is as simple as saving lives. This is especially true in India. As one of the world’s largest manufactures of generic medicine, India has become a prime target for counterfeit drugs. While culprits hope to make quick money, drug counterfeiting undermines producers of legitimate medicine and puts public health at risk.

In an attempt to monitor the market against counterfeit medicines, the government of India has launched a task force to tackle the problem. According to the BBC, up to 25% of the medicines consumed in poor countries could be counterfeit or substandard, according to the World Health Organization. They define a counterfeit as “a medicine, which is deliberately and fraudulently mislabeled with respect to identity and/or source”.

This week, in a “Beyond the Broadcast” panel discussion, a group of experts discussed issues presented in America Abroad’s documentary on counterfeit goods: Counterfeit Crackdown! The Global Fight against Pirated Goods. The panel consisted of Chris Israel, Former United States Coordinator for International Intellectual Property, 2005-2008; Stan McCoy, Assistant U.S. Trade Representative for Intellectual Property and Innovation; and Naboth van den Broek, Counsel at Wilmer Cutler Pickering Hale and Dorr, and and a member of the European Regulatory, International Trade, Investment and Market Access, and Public Policy and Strategy Practice Groups.

The discussion tackled major questions related to the problem of piracy in the world today, and the panel was in agreement over the size of this increasingly serious issue.

“Every CEO in this country considers this a major problem…It’s becoming so big for us, we can’t ignore it anymore,” van den Broek said.

So how big is it? According to McCoy, criminal networks in China alone are raking in $48 billion dollars. And it’s not just on handbags, counterfeiting has expanded into very sophisticated products, van den Broek said. From over-the-counter drugs to new technologies. “Anything can be counterfeited,” the panel said.

According to the panel, counterfeiting and piracy can bring economic repercussions, such as unemployment as well as consumer health and safety issues, for products that aren’t regulated by governing bodies such as the FDA. Despite the harmful effects of the counterfeiting industry, the problem is continuing to develop simply because people are too poor to afford authentic products.

America Abroad’s Ann Kim traveled to India where counterfeit and substandard medications have dangerous implications.

Mexico’s Underground Economy Thrives

CD-cover_mexicoMexico’s Ciudad Juarez, across the Rio Grande from El Paso, is now an infamous place. The international and Mexican press is peppered with tales of drug smuggling, rehab center massacres, inter-cartel killings and cartel-military clashes. Just this week, the number of murders in Juarez passed the 2,000 mark, surpassing last year’s 1,600 murders with more than two months left in the year. Its American sister city is now home to pockets of Juarenses who can afford to flee the violence. These rates are astounding and alarming for a city of 1.5 million that before 2008 had about 200 murders a year.

These numbers tell the bloody story of a city under siege and brought to its knees by drug violence, tragedy and hopelessness. But the story of Juarez is not just a drug story – it’s also a story of economics, where the aftershocks of the global financial crisis play out in unforgiving ways.

After ratifying NAFTA in 1994, Mexico tied its economic fate intimately to the US, and for a time, that approach seemed to work well, at least for some sectors of the Mexican economy. The Juarez-El Paso metro area became one of the largest manufacturing hubs in North America, as hundreds of maquiladoras opened their doors in Juarez. American companies found these Mexico-based factories appealing because they offered the twin advantages of lower worker wages and close proximity to the large US market. Maquiladoras producing anything from clothes to electronics offered a livelihood to thousands of Juarenses and migrants from other parts of Mexico and a steady supply of goods for American customers.

But the US economic crisis brought this manufacturing engine to a sputter – with Americans not buying, thousands lost their jobs in Juarez. America’s recession has been devastating for the Mexican economy – at least for its “legal” economy. Meanwhile, the global economic slowdown has yet to bruise the “illegal” economy and slow the flow of drugs, guns and laundered money across the US-Mexico border. With the contraction of Mexico’s economy, the value of the peso has fallen, which means that drugs coming from Mexico are cheaper than they were before the economic slowdown and demand among American consumers, whose wallets have also thinned, has remained steady.

For many struggling Juarenses, whose livelihoods have been tied to American patterns of consumption, that’s meant they must go where the jobs are, namely the huge drug industry, one of the few flourishing industries on the US-Mexico border. Last month I traveled to the El Paso-Juarez area to work on a piece on the economics of the drug trade. For a primer on the actors and market forces of this illegal economy, listen here:

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