Tuesday, December 15, 2009

Mexican cartels' smuggling menu

I found an article from December 2006 by Stratfor* that had an interesting drug war menu. Most of the article is an arcane chronicle of rapid cartel succession, but it's also got a price list for smuggling goods through the southern border's major crossing points (or plazas, in cartel lingo):

In drug-trade lingo, the “gatekeeper” controls the “plaza,” the transhipment point off of one of the main highways on the Mexican side of the border where drugs and other contraband are channeled. In Spanish, the word “plaza” means a town square, though it also can mean a military stronghold or position. In this case, it means a cartel stronghold. A gatekeeper oversees the plaza, making sure each operation runs smoothly and that the plaza bosses are collecting “taxes” on any contraband that passes through. The going rate on a kilo of cocaine is approximately $500, while the tax on $1 million in cash heading south is about $10,000.

Gatekeepers also ensure that fees are collected on the movement of stolen cargo and illegal immigrants — including any militants who might be seeking to enter the United States through Mexico. Regardless of a person’s country of origin, money buys access into the United States through these plazas, though the fees charged for smuggling Middle Eastern and South Asian males into the United States are higher than for Mexicans or Central Americans. The gatekeepers’ primary concern is ensuring that appropriate fees are collected and sent to cartel coffers — and they operate in whatever manner best suits a given circumstance: intimidation, extortion or violence. Of course, one of their main jobs is to ensure that corrupt Mexican police and military personnel are paid off so plaza operations can proceed undisturbed.

The market for smuggling is remarkably efficient – that amounts to a 1% tax on money, but the cocaine tax is a bit more complicated. A gram of pure cocaine (which would be the ideal way to smuggle it, since it weighs the least) retails for over $100, but the person who's taking it from Mexico to the US might only get a tenth of that (rough estimate), which would make the tax around 5%.

* Stratfor is a private intelligence agency with a subscription-only site, but if you search the title of the article in Google and click the link from the search results page, you can access anything you want. This trick also works with the Wall Street Journal.

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