In Chile, trade misinvoicing, which occurs when export or import invoices are falsified in the final goal of tax evasion or money laundering, remains prevalent. This practice is particularly significant in the copper industry, which accounted for 48.2% of the nation’s total exports in 2018. By underreporting the value of copper exports, companies have minimised their taxable revenue. Conversely, overreporting import values has allowed companies to reduce their tax burdens by inflating deductible costs. For instance, this practice was employed by Chile’s state-owned copper corporation, CODELCO, in its agreement with China Minmetals Corporation to supply copper at below-market rates. This has raised concerns about potential tax evasion and undervaluation. Trade misinvoicing also allows for money laundering, as falsely reported trade transactions are used to conceal illicit proceeds. Money can notably be moved across borders, as has been found to be the case for Caso Yaupel, a fruit importer and distributor that laundered money digitally across Colombia, Germany, Ecuador, and Chile. Trade misinvoicing is not just an economic problem but also affects public welfare and security. The practice is often linked with other criminal activities like drug trafficking and human trafficking.
Keywords: Latin America, Chile, minerals, copper, trade and transport, tax evasion, money laundering, trade misinvoicing
Sources: https://gfintegrity.org/trade-misinvoicing-in-chile/
Illegal logging is an ongoing issue in Chile and has caused extensive environmental and economic damage over several decades. The World Bank notably reports the destruction of 11,368 hectares of land and the generation of 1.2 million m³ of illegally harvested timber from 2013 to 2019. A significant consequence of the enormity of this sector is illicit activity, such as timber theft by criminal mafias. Timber theft by criminal mafias has surged, with the value of stolen wood increasing from US$20 million in 2018 to US$67.8 million in 2020. In addition, the ongoing conflict between the Mapuche Indigenous community and the government has also intensified due to logging on ancestral lands. Criminal groups exploit this situation, engaging in timber theft, creating fake invoices, and laundering illegal timber through legitimate financial structures. Investigations have revealed significant laundering through false documentation, sometimes even involving internationally certified companies. The government’s institutional framework has allowed organised crime to flourish in the timber sector. Government agencies have inadequately supervised timber companies, particularly regarding the proper use of shipping documents and invoices and the sustainable use of forest lands.
Keywords: Latin America, Chile, timber, primary production, trade and transport, illegal logging, environmental crime, fraudulent documentation, illegal timber trade, money laundering, Indigenous rights
Source: https://gfintegrity.org/illicit-activity-in-chiles-timber-sector/
Large-scale copper robberies orchestrated by organised crime groups have had a devastating impact on the Chilean copper industry. For instance, on the 11th of January 2023, 13 shipping containers, valued at $4.4 million, were stolen from the port of San Antonio after guards were subdued and cameras disabled. The Antofagasta Bolivia Railway (FCAB) has also reported over 100 attacks on copper-carrying trains from 2020 to 2023, with 39 incidents in 2022 alone. Gangs, equipped with advanced technology and heavy machinery, conduct these raids with paramilitary precision. These robberies are also highly violent, as shown when armed men kidnapped workers in Antofagasta to facilitate a copper robbery in May 2021. Organised crime groups also frequently attack police and companies’ security teams, sometimes resulting in murder. The scale and level of violence of these copper robberies has increased drastically over the past few years. While copper robbery has always been frequent in Chile, the methods used are now much more developed, allowing for better organised, larger and more effective heists.
Keywords: Latin America, Chile, minerals, copper, serious organised crime
Sources: https://insightcrime.org/news/chile-copper-industry-robbers-ports-trains/