Most investigations and the narrative around the fight against contraband and customs fraud focus on how much money the tax authorities are unable to collect. But there are issues related to brand protection or consumer health risks that also need to be addressed.
According to the Interinstitutional Commission for the Prevention and Fight against Tax Fraud and Customs Smuggling in Guatemala (Coincon), during 2024, they executed 2,224 operations, which resulted in 2,072 seizures and 27 fraud reports that amounted to Q74. 8 million (US$9.7 million).
These numbers represent only a fraction of this outlaw market, which shows that the problem of contraband is far from over and goes beyond a question of evasion.
Have you ever visited a market or seen a pick-up truck loaded with eggs, chicken, dairy products, cooking oils, grains and even medicines at suspiciously low prices?
Those deals are usually too good to be true. They’re probably contraband goods that entered Guatemala from Mexico. They may have been bought legitimately there, but crossed the border through blind spots, without paying taxes, and reached their point of sale without any kind of control. This means that consumers who purchase these products outside official points of sale, at lower than usual prices, may be buying contraband goods.
What's more, consumers could be eating yogurt that has been sitting in the sun for days or chicken that has been in the back of the truck, uncooled, for more than 12 hours. So, what was intended to be a saving for the family budget could turn into a high health cost.
In addition to making people sick, this problem affects companies, as their brand may appear on the label of the defective product, which will impact their reputation and may generate complaints. If something bad happens, the complaints will be directed against the company and not against the smugglers who introduced the product illegally or sold it on the market without complying with health standards.
From Contraband to Counterfeits
Let's now place ourselves in one of the busiest streets in downtown Guatemala City. A commercial street that stands out for its proximity to the National Palace and the Ministry of the Interior.
Surely you have noticed the shop windows filled with the latest sneakers or clothing trends from well-known brands at much lower prices than the official stores.
This is just one example, and this situation can be seen throughout the country. But it serves to illustrate the transition from contraband to an even more lucrative model: counterfeiting.
It is important to emphasize that in this case the crime already transcends taxation and extends to issues related to intellectual property (IP). Despite the large number of counterfeits seen in Guatemala, according to Coincon, there were barely 82 actions related to IP in 2024.
This is one of the issues that the United States has highlighted in its National Trade Estimate Report 2025 on barriers to foreign trade, which was recently used to set tariffs for different countries.
Specifically, they highlighted the limited and inadequate actions and urged Guatemala to “strengthen law enforcement, including with regard to criminal prosecution, administrative and border actions, and intergovernmental coordination to address widespread copyright piracy and the sale of counterfeit products on a commercial scale”.
But smuggling and counterfeiting can go a step further and not only deceive the consumer, the brands or the tax authorities. They can also put lives at risk when we talk about food, medicines, tobacco or adulterated alcohol. According to the report cited above, the problem extends to the illegal use of cable signals and even the government itself, with the use of unlicensed software.
So, if you are a consumer, don't risk your life and your family’s wellbeing to save a little money. And if you are a producer or distributor, report these violations to the authorities. This will help you protect your product, your brand and your reputation, which is essential for your business to be sustainable and profitable over time.
If you need advice on this matter or have any questions, please do not hesitate to contact us.