The increasing number of Chinese-operated ports in Latin America is raising concerns about their use by Chinese criminal networks as well as transnational criminal organizations (TCOs) for the trafficking of illicit goods, the Washington-based think tank Center for Strategic and International Studies (CSIS) indicated in a recent report.
“Geopolitically, the network of ports and maritime routes controlled by Chinese companies strategically covers the Latin American Pacific, connecting critical areas both for the arrival of chemical precursors for drug production and for the departure of illegal goods, wildlife trafficking, illegal mining, and to exploit natural resources,” Yadira Gálvez, a security expert and academic at the National Autonomous University of Mexico, told Diálogo. “This creates great instability and concern in the region.”
TCOs resort to ports to camouflage illegal products within legal shipments, a tactic facilitated by the expansion of markets around the globe, says CSIS. Trade agreements between China and the region create a network that moves large volumes of legal goods, facilitating transit in both directions.
Containerized seaborne trade carries about 90 percent of the world’s goods, with more than 500 million units per year. However, because less than 2 percent of these shipments are inspected, ports become key for illicit trafficking, the United Nations Office on Drugs and Crime (UNODC) indicated.
Port of Chancay
China owns or controls several ports in Latin America and the Caribbean, including Lázaro Cárdenas and Manzanillo in Mexico, Balboa and Colón in Panama, as well as a terminal in Buenos Aires. COSCO Shipping Ports Ltd., a subsidiary of Chinese state-owned conglomerate COSCO, controls 60 percent of the Port of Chancay in Peru.
In November, COSCO launched weekly container shipments from Chancay to Asia, with a direct route to Shanghai and other destinations that will vary based on the demand, Mexican daily El Economista reported. It will also open cabotage routes with ships from Colombia, Ecuador, and Chile, consolidating its cargoes in Chancay.
The report, Organized Crime Trends and Alerts 2024, by the Peru-based think tank Institute of Criminology and Violence Studies, warns that Chancay could be a hub for cocaine and fentanyl trafficking between South America and Asia.
Chinese investment in infrastructure in Latin America fosters an environment of opacity, limiting transparency and accountability, which facilitates the corruption and bribery necessary for criminal organizations to exploit ports, CSIS notes. It is even easier when a port has a vertical operating structure, like in Chancay, where COSCO controls all port functions.
“This represents a major vulnerability for countries in the region. An example is the Chinese base in Argentina, which operates with high levels of secrecy, to the point that not even the Argentine government itself knows with certainty what activities are carried out there,” Gálvez said. “This lack of transparency could be replicated in Chinese-run ports in Latin America.”
In 2023 at least 75 foreign vessels, mostly Chinese, entered Peruvian ports without the satellite device required by Peruvian law. These ships arrived at the ports of Paita, Chimbote, Callo, and Paracas, where COSCO has operations, CSIS indicated.
Port Lázaro Cárdenas
In Mexico, the port of Lázaro Cárdenas, in Michoacán, is strategic for organized crime. According to the DEA’s National Drug Threat Assessment 2024 report, the Jalisco New Generation Cartel (CJNG) uses Lazaro Cardenas for drug trafficking, although it also operates in the port of Manzanillo in Colima.
The CJNG uses bribery, intimidation, and extortion to secure the passage of its shipments, which include cocaine from Colombia, Peru, and Bolivia, and precursor chemicals from China to manufacture fentanyl and methamphetamines. These ports play a crucial role in receiving these chemicals from China on a large scale, according to the DEA.
The DEA report also notes that the Sinaloa Cartel operates in at least 47 countries, including China, where it obtains precursor chemicals for drugs, traffics methamphetamine, and has ties with Chinese money laundering networks. Precursors for fentanyl are smuggled into Mexico, hidden in legal shipments through Pacific ports.
China tends to downplay the seriousness of fentanyl trafficking and blames third parties, reported Otros Diálogos magazine of the College of Mexico. Also cause for concern is the increase of Chinese migrants entering Mexico illegally through Pacific ports, where Chinese mafias take part in human trafficking and totoaba fish trafficking. The totoaba fish, endemic to the Gulf of California and in danger of extinction, is prized in China for its swim bladder used in soup and traditional medicine.
Growing threat
For Gálvez, China’s activities are a growing threat to regional security. “This situation, combined with the alliance between Russia and China, may create a scenario conducive to the proliferation of activities between state and non-state actors to promote illicit trafficking and undermine other countries,” Gálvez said.
“China is intensifying its presence in Latin America, not only with its logistics network but also by offering port technology at affordable prices, even on credit,” he added. “This growing influence raises concerns about information security, as this equipment could be used to collect sensitive data in strategic areas such as customs.”
It is critical that the countries at stake and like-minded partner nations, such as the United States and countries of the European Union, along with organizations such as the Organization of American States, prioritize capacity building training for port authorities, coast guard, and customs officials to help countries better address the potential increase in organized crime activity through ports operated by Chinese companies, CSIS concluded.
