International commerce flowing across the border between the United States and Mexico is a shared responsibility between our two nations and an important area of focus for our collective long-term prosperity. As such, news of President Joe Biden’s plans to finalize a ban on menthol cigarettes is a source of great concern.
Powerful Mexican cartels, sophisticated multibillion-dollar criminal enterprises, are already trafficking illicit tobacco to fund their violent operations. The current regulated market for menthol cigarettes is $30 billion. A nationwide prohibition on menthols will create a tremendous profit incentive for these cartels to become more aggressive in their activity.
As the General Director of the National Citizen Observatory of Security, Justice and Legality A.C. (ONC), and a National Security Council of Mexico member, I know what the cartels are capable of. These high-tech, organized crime networks continue to innovate and diversify beyond drugs and weapons. They evolve into new products and industries where they can capitalize on growing demand while also minimizing risk.
Over the past few years, the illicit tobacco market has allowed these criminal networks to generate massive revenue – rivaling narcotics – with a fraction of the risk. The sale of illegal cigarettes is already a multibillion-dollar market in the U.S. Criminal networks profit from the price and tax disparities between states. Increasing the transborder traffic of contraband cigarettes from Mexico into the U.S. should give policymakers pause.
The cartels know better than most that tobacco restrictions like bans or taxes won’t reduce consumer demand for an addictive product. So, when states like California ban menthol cigarettes and legitimate retailers are prohibited from selling products to meet consumer demand, the opportunistic cartels quickly become the suppliers of choice.
Mexico’s most powerful and violent drug cartel is Cártel de Jalisco Nueva Generación (CJNG). According to our estimates, CJNG’s assets are in excess of $20 billion, with a presence in at least 27 of the 32 Mexican states. The CJNG, which has been sanctioned by the United States for its role in drug trafficking, is a glaring example of a modern cartel diversifying and smuggling tobacco along the same routes that it traffics narcotics like fentanyl, weapons, and sadly, even humans.
Recent investigations have linked the CJNG to Tobacco International Holdings SA, a Switzerland-registered corporation. This linkage has enabled the cartel to monopolize the Mexican cigarette market and evade sanctions as it ships tobacco into the U.S.
The House Committee on Homeland Security chairman emphasized the threat of cartel tobacco trafficking in a recent letter to the secretary of Homeland Security.
My fear, and that of many colleagues in government and international security, is that a nationwide menthol cigarette in the U.S. will play right into the hands of the CJNG and other violent Mexican cartels. A ban would give the cartels virtual control of another lucrative commodity across America’s southern border. This will create an unprecedented windfall for the CJNG and their rival cartels. The resulting profits fund violent crime throughout Mexico, perpetuating a lawless culture.
With the next presidential election in the United States on the horizon, now is the time for an important discussion about smart policy. The president of the United States must understand that overzealous domestic policies have foreign implications, and bans on popular consumer products like menthol cigarettes can create adverse outcomes in both Mexico and the U.S.
I urge the Biden administration, members of the United States Congress, and candidates for president to work with Mexican authorities to understand what policies, such as a menthol cigarette ban, would impact both our countries. Instead of empowering Mexican cartels, we should be doing everything in our power to work collaboratively to stop the CJNG and other cartels from growing in power and influence.
Francisco Rivas is the General Director of the National Citizen Observatory of Security, Justice and Legality A.C. (ONC) and member of the National Security Council of Mexico/InsideSources