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Free Zone rejects reports that it is a hub for gold smuggling

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Free Zone rejects reports that it is a hub for gold smuggling


Posted 21/01/2023

Accusations by the OECD that the Colon Free Zone (ZLC) serves as a transit for gold smuggling from other countries in the region, have been strongly rejected by the private sector

According to a Bloomberg Línea publication, the OECD report entitled "Free Zones and Illicit Gold Flows in Latin America and the Caribbean", published  in December, the country is "an important transit center for a series of goods, including smuggled gold from other countries in the region.”

“In addition to the magnitude of its operations, the ZLC “has a long history as a center for illicit trade and trade-based money laundering. Several gold-related cases over the years have implicated actors operating there”; smuggling through jewelry is something "remarkable," the outlet said.

And, they project an increase in the transfer of gold with the reactivation of the gold mine in Cerro Molejón, Donoso, Colón, at the hands of the company Broadway Strategic Metals, an area previously exploited by Petaquilla Gold In 2021, the OECD published the report "Gold flows from Venezuela, support for due diligence on the production and trade of gold in Venezuela", where they explain that the gold that leaves Venezuela is apparently laundered in countries of the Americas. Latin and the Caribbean. These were identified as Colombia, the Dominican Republic, Brazil, Surinam, Guyana, and Panama.

There is ample prospect for further investigation into possible flows of Venezuelan gold through Panama, and in particular the ZLC, could deserve special scrutiny. It has a long history serving as a transit hub for gold, although some sources indicate that greater coordination in law enforcement between Panama, Colombia, and the United States has increased risks for smugglers," the OECD report noted.

The report cites a case from August 2019, with the "Esplendor" operation carried out by the Colombian authorities, which after three years led to the arrest of several people involved in the smuggling of over $5 million in gold from Colombia to Panama.

Faced with accusations that the main free zone in the Western Hemisphere with movements of over $18 billion is used to smuggle gold, the president of the ZLC Users Association Severo Sousa, said that import handling, export, and re-export of precious metals are very strict, and they rely on the reputation of companies like Brinks.

“The OECD statements seem like urban tales. It is as if it were based on rumors and not on a real investigation”, said  Sousa. He questioned the documents on which the OECD is based, since once smuggling is detected, these cases are documented to be brought to trial, and there are no such processes.

"The adaptations of the OECD on the illicit issue of gold or money laundering in the Free Zone are highly contradictory and illogical,", Tayra Barsallo, general administrator of the National Customs Authority (ANA), clarified that the only registered cases of smuggling of gold or precious metals are specific, and have occurred in some ports of entry and exit with passengers who do not declare the value of the jewels that acquired in the free zones.

The Organization of American States (OAS) has also reviewed the issue with neighboring countries, mentioning Panama. In February 2022, the Department against Transnational Organized Crime revealed its report " that "gold is smuggled from Colombia to various destinations in the region, such as Ecuador, Panama and the Caribbean”.


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Free Zone denies it’s home to gangs and drug smuggling


Posted 27/01/2023

The  Colón Free Zone (ZLC) and the province that hosts it is home to gangs counterfeiting, and cocaine smuggling, says an article by Mat Youkee in the UK’s respected Guardian newspaper.

The area that was destined to be a commercial center for the Americas became synonymous with drugs, gangs, and violence, the note highlights. The publication adds that the commercial area – established in 1948 as the second largest free trade zone in the world, with clear wholesale redistribution objectives for Latin America and the Caribbean – also became the center of an agency operation Europol, in which Anthony Martínez Meza, son of a director of the ZLC, and suspected of organizing drug shipments from Colón, was arrested.

The British publication quoted an interview by the president of the Colón Chamber of Commerce, Michael Chen, who stated that "every day the situation seems to get worse... Organized crime and gangs find more creative ways to overcome what remains of my city".

Alejo Campos, regional director of Crime Stoppers Latin America, pointed out that "the objective of the gangs is to obtain control of the points where the containers can be contaminated with drugs in the free zone and the ports ”. He added that “there is a big territorial dispute at the moment. Police actions have decapitated some of the gangs and new leaders have emerged looking to position themselves on their patch, and that's when the killings begin."

According to The Guardian's note, the cocaine would arrive in the free trade zone, in containers, from Buenaventura, on the Pacific coast of Colombia, or through land routes, before being hidden in containers bound for Europe. He adds that the procedures would be carried out with the complicity of the unions, who would have been co-opted by the gangs. He maintains that the statistics show that only 2% of the containers go through scanners to detect contraband.

The city
The British outlet also makes an analysis of the current situation in the city of Colón. An interview with a renowned tailor,  William Donadío and who is 94 years old, is included. Donadío recounts having had US military and workers from numerous multinationals as clients throughout his career and also having been present, among the crowds, when Colón received visits from Queen Elizabeth II (1926-2022) and President Dwight Eisenhower (1890-1969).

On its Twitter account, the free zone published statements by its general manager, Giovanni Ferrari, in which he indicated that "to say that there is a smuggling problem [in the ZLC] is an inaccurate and slanderous comment."

The ZLC and the user companies "continue working to comply with international compliance standards with the vision of shielding the activity of the free zone against illicit trade activities, as part of the commitment to our reputation.


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