Despite high rates of violence and corruption in Latin America and the Caribbean driven by criminal organizations from the hemisphere, a study by researchers at Florida International University (FIU) highlights the growing impact of Chinese criminal networks in the region and exposes their link to Chinese-state owned companies.
“They operate discreetly and stand out for their organization and sophistication, in contrast to the traditional dynamics of the region,” Diego Rojas, research coordinator at the Catholic University’s Center for International Studies in Chile, told Diálogo on January 19. “Their presence, although publicly hidden, challenges the usual operational logics in Latin America, stressing the importance of paying attention to this evolution of organized crime.”
The report, Triads, Snakeheads and Flying Money: The Underworld of Chinese Criminal Networks in Latin America and the Caribbean, reveals the criminal activities of these mafias, such as the trafficking of precursor chemicals for fentanyl, money laundering with “flying money,” and the illegal trafficking of people and exotic animals.
“These mafias take advantage of the limited visibility of their businesses in some areas. Their ability to maintain a low profile is sustained by the stealth operation backed by the business of Chinese communities in the region,” Rojas added. “Unlike the violent territorial dynamics observed in other criminal gangs in Latin America and the Caribbean, these groups demonstrate remarkable organization and selectivity in their business niches.”
Chinese triads
In the 19th century, the first Chinese immigrants arrived in Latin America from economically poor provinces such as Fujian and Guangdong, founding communities in countries such as Argentina, Brazil, Cuba, Mexico, Panama, Peru, and Venezuela. The report details that many of these people engaged in legitimate businesses, although some dabbled in illegal activities, entangling themselves to the infamous Chinese triads such as the 14K and the Fujian mafia.
Police operations in the region have shown the deep infiltration of the Chinese mafia, such as its operation in Chile. In 2020 for instance, Chilean authorities busted a branch of the Fujian mafia, known as Bang de Fujian that operated indoor marijuana plantations and entertainment venues. In Argentina, the Fujian mafia has been operating since the 1990s, extorting shopkeepers in several large cities, requiring some owners to pay as much as $50,000 in protection fees.
For Rojas, “impunity and corruption have become critical risks for Latin America, providing an environment conducive to the expansion of these criminal organizations.”
Deadly threat
According to the FIU study, the growing threat of fentanyl, in which these Chinese criminal group specialize and that is responsible for numerous deaths in the United States and Latin America, poses a national security challenge. Mexican cartels obtain the essential chemicals for its production mostly from Chinese companies, allowing them to produce and traffic fentanyl on a large scale in the hemisphere.
“The threat of fentanyl requires caution in the face of its possible expansion. The alliance between Chinese triads and Mexican cartels in its production could spread to other cartels in the region,” Rojas said. “The ease of production and permeability to fentanyl control increases the risk of its increased circulation in Latin America.”
Money laundering
Chinese mafias, the study states, are changing the money laundering landscape in the Americas, making it easier for Mexican cartels and other regional criminal groups to launder millions of dollars quickly and efficiently. This evolution provides significant advantages, such as reduced commissions and a lower risk of detection for those involved in illicit activities.
The groups charge a 2 percent commission on the amount to be laundered, sell the money to wealthy Chinese nationals to send it to China and, through an intermediary, transfer it to the Chinese criminal group’s account, taking a 10 percent commission, the report indicated. This process involves a network of Chinese banks that facilitate the transfers between them.
Wildlife trafficking
Latin America, with its rich biodiversity, faces a major threat from China’s dominant role in the illegal market for wildlife products, says the study. High demand from China driven by traditional medicine and unfounded beliefs has given rise to an extensive network of illegal groups operating in the region, smuggling wildlife into China.
These groups use various wildlife products as a means of transferring value to Chinese traders, obtaining in return precursor chemicals for the illegal production of drugs such as fentanyl and methamphetamine, the report added.
These illicit activities, together with illegal, unreported, and unregulated (IUU) fishing carried out by Chinese vessels, seriously affect South America, representing a direct threat to national and food security, Argentine news site Infobae reported.
Systemic response
Acoording to the FIU report, corruption and impunity in China and in some areas of Latin America and the Caribbean suggest that Chinese officials may indirectly benefit from or deliberately ignore these illegal groups. “PRC provincial and municipal government officials are at least indirectly benefiting from or turning a blind eye to these illegal groups,” the report states.
Some of the Chinese criminal networks operating in Latin America, carrying out money laundering, illegal wildlife trafficking (such as trafficking in illegal jaguar parts), and IUU fishing among other illicit activities, have been found to collaborate with Chinese state-owned companies, raising the question as to the complicity of China. One of the criminal networks the study addresses, SA1, based in Suriname with operatives in Brazil, Guyana, and French Guiana “sources shark fins from Venezuela and the Caribbean, which are being fished by Chinese state-owned companies in Venezuela.”
For the Brookings think tank, the link is a lot more apparent. “These criminal networks provide a variety of services to the Chinese government, the Chinese Communist Party, and Chinese legal enterprises,” Brookings said in a late January report. “They help build networks of corruption and influence among foreign politicians and businesses […]. Thus, Chinese government officials often unofficially extend the umbrella of party protection and government authority to these actors.”
“The concern regarding the Chinese State’s role with these mafias highlights the need for a systemic response. The call is widespread as the problem is not limited to one country. Lack of coordination between countries could exacerbate the problem in the short term. It is imperative that countries strengthen international cooperation to efficiently address the illicit activities of these Chinese mafias,” Rojas concluded.