Widespread Smuggling : Paraguay: Rolling in Stolen Cars

The salesman, a hearty and doubtless trustworthy soul with slicked hair and a spiky mustache, caressed the Brazilian-made Volkswagen, his movements a patois without frontier: only a few hundred miles on the clock; nice color--good for the heat.

A few weeks before, the station wagon had been sold new in Brazil for around $14,000. Asking price on the streets of Paraguay, which has never manufactured anything more road-worthy than an ox cart: $5,000.

“It has stereo, air conditioning--even a first-aid kit, no extra charge,” the salesman murmured.

Smile Provoked

And papers? Title? Import permit? Bill of sale?

The salesman smiled at the joke.

“Senor, in Paraguay, papers are not necessary. Cash for the key,” he said.

The cheapest cars in the world are sold here today on the sun-baked streets of the South American heartland. In Paraguay, an entire country rolls on stolen wheels.

The car racket is symptomatic of what its critics call institutionalized lawlessness underwritten by one of the world’s most enduring dictatorships. Foreign lawmen, by contrast, are more concerned by new links they discern between the stolen car industry and down-scale trafficking of cocaine and marijuana.

Citing its own discomfit at soaring imported fuel bills, the 33-year-old government of President Alfredo Stroessner is promising to move against the car scam, but no one is hitting the brakes.

Smuggling Countenanced

It has been no secret in Paraguay these past three decades that big business smuggling is countenanced and abetted by the Stroessner regime, and in return that smuggling’s profits help to maintain it.

“The government cannot cut off the hands from the strong arms that support it,” Juan G. Granada, an opposition lawyer, said. “The armed forces, the ruling party and the government itself are all involved in smuggling of all sorts. It is an important source of income for the faithful.”

By most conservative estimates, nearly half of Paraguay’s national fleet of 85,000 cars was stolen from incautious Brazilian motorists. About 34,000 cars that had arrived paperless in Paraguay were legalized by two amnesties declared in the last five years.

“We did a study which estimated that between 800 and 1,000 stolen cars enter the country each month,” said Miguel Carrizosa, who sells legally imported Volkswagens and is member of a distraught group of about two dozen above-board dealers. Altogether, they import 150 cars per month for a country of 3.7 million that is among the poorest in South America.

“Last year, about 500 Volkswagens were sold legally and about 6,000 others without papers. It’s shameful; a whole generation of children is being taught that the smart thing to do is to buy a stolen car,” Carrizosa complained.

Protests at what some Paraguayans call a national scandal are drowned in the glittering hum of Asuncion’s bargain basement traffic. Judging from their buying habits, most Paraguayans see the stolen car as a windfall. There are many broad winks, and many hands in the multimillion-dollar pot.

Everyone Buys

“It might be understandable if it was poor people buying their first car, but it’s not,” Miguel Maria Michelagnoli, a Toyota importer, lamented. “Judges, lawyers--people you’d think too important and moral to deal in these things--snap up luxury stolen cars.”

Often a pillar of society will buy a legal car himself and stolen cars for his wife and mistress, according to Michelagnoli.

Organized bands and enterprising one-man gangs heist the cars in big Brazilian cities and drive them across the Paraguayan border through unguarded crossings or past customs agents on both sides who are paid to be blind.

“Specify the model, color, equipment and what interior fabric you’d like and there are guys in this town who guarantee three-day delivery to your driveway,” radio station owner Humberto Rubin said.

Flexible Morals

Big dealers and back alley tradesmen sell their loot openly in a country whose central location and flexible official morals have historically made it a smugglers’ entrepot.

In a page of 72 classified car ads in an Asuncion newspaper one recent morning, seven boasted that they came with documents. The rest were all what is known here as mau , which means “bad” in Portuguese. Portuguese is the language of Brazil but not of Spanish-speaking Paraguay, except in automotive circles.

It is estimated that 60% of Paraguay’s foreign trade, around $300 million per year, is in smuggled merchandise unrecorded in national ledgers. Imported clothes, whisky, cigarettes and electronic equipment are all cheaper in Paraguay than anywhere else in South America. Stolen trucks, planes and boats come in. Smuggled lumber, beef, marijuana, leather and other agricultural products go out.

International trade tables invariably show greater Brazilian exports to Paraguay than Paraguayan imports from Brazil.

Amid the bounty, Paraguayan customs chief Fulgencio Tomas Santos is sensitive to criticism of his service.

‘Weakens the Economy’

“What is contraband to some is not contraband to others,” he said in an interview. He did lament smuggling, “which hurts the image of the country and weakens the economy.”

Santos said that many goods, such as low-priced jeans, whisky and music boxes that tourists think are smuggled in fact are legally imported at cut-rate tariffs precisely to lure foreign buyers. Last year, despite a recession, customs revenues increased more than 25%, he said.

“There are different priorities at different times. Right now, it is leather,” Santos said. “So much is leaving for Brazil illegally that local industries complain they are running out of raw materials.’

Santos, as well as more neutral observers, believe that the legal dealers’ figure of about 1,000 imported stolen cars per month is too high. Even if it is only in that neighborhood, the losses to Brazilian insurers at, say, $5,000 per car, are staggering.

Private Detectives

One Asuncion lawyer employed by 93 Brazilian insurance companies has two private detectives on the street tracking down mau cars. He says he has identified more than 1,000 vehicles and has recovered around 50, mainly by jawboning the Paraguayan owners.

Although Paraguayans are the principal hot car entrepreneurs, they get strong Brazilian support, some of it from unexpected sources.

“A Brazilian comes over, loses his money in a casino, sells his car to get more and then goes home to report it stolen,” said Santos, who said he has neither the manpower nor the mandate to roust out the thieves.

Riposted Michelagnoli: “They could stop it if they wanted to, or at least drive it under ground. But, no. The police say it is a customs problem. Customs says it has no personnel. The courts say there is no crime. The newspapers say it is not their job to ask for documents from advertisers.”

Paraguayan police, like most of their Latin American peers, do not make many traffic stops, but when they do there is never any palaver about license and registration.

Documents Lacking

“The police never ask for documents because they know nobody has any,” Carrizosa said. “What would they do if they had to impound tens of thousands of illegal cars?”

The only documentation that Paraguay’s 151 municipalities demand to license a car is the applicant’s affirmation that he or she is the owner. Licensing fees are a major source of civic income, particularly in outback villages where clerks are seldom slaves to formality.

There are probably more cars licensed by the small town of Luque than there are people in Luque. Such backwater plates are utilitarian, but for prestige, a discriminating receiver of stolen goods seeks a more fashionable address.

At present, the most sought-after license plates in town are nifty red, white and blue items from Isla de Yacyreta, which used to be a presidential fishing camp on the Parana River and will soon be the site of a giant dam being built jointly by Argentina and Paraguay.

Fishing Crony

Yacyreta is not in fact a municipality at all, but an obliging businessman there issues plates nevertheless with government blessing. He is an old fishing crony of Stroessner’s.

Car smuggling began in earnest in the mid-1970s, during a boom triggered by construction of the huge Itaipu dam with Brazil. The boom is bust now, and as internal demand for cars has slumped, thieves are turning to other markets. Stolen cars are becoming a medium of exchange in the back lots of the international drug trade.

Romeo Tuma, Brazil’s national chief of police, was in town recently to appeal for Paraguayan help in stemming the stolen car tide.

“Some of the stolen cars are driven through Paraguay into Bolivia where they are exchanged for small shipments of cocaine. The drugs are then smuggled back into Brazil for domestic consumption,” Tuma said in an interview after meeting with Stroessner. The dictator promised what Tuma called “his full support” in slowing the traffic.

High-Grade Marijuana

Other foreign lawmen also cite a variation on a theme along Paraguay’s border with Brazil, where Brazilian thieves have begun swapping cars for high-grade Paraguayan marijuana.

Even without official harassment, however, there is some risk for Paraguayans who buy stolen cars. Paraguayan insurance companies routinely protect the maus against all risks except theft, there being a sub-cult of dishonorable thieves who regularly resteal stolen cars and resell them.

When that happens, of course, the buyer is flat out of luck. Even in Paraguay, it is embarrassing to report the theft of a stolen car.

One Paraguayan newsman, a court reporter, had scarcely a chance to fill the tank before his slick Brazilian mau was restolen. Fortunately for him, there are happy endings in the Paraguayan never-never land. On his way to a bus stop a couple of months later, he chanced upon his restolen stolen car parked in the street.

He stole it back.