Brazil and Mexico, where are the bullets?

An exclusive article for the montlhy newsletter “En la mira – The Latin American Small Arms Watch.” Click here for subscriptions and for previous issues.

Pablo Dreyfus and Júlio Cesar Purcena 1

In En la Mira’s issue n°12 (August 2007), we presented the reader with a review of the international trade of small arms and light weapons (SALW) in Latin America, according to the statistics countries declared to United Nations Commodity Trade Statistics Database (Comtrade), in which products are classified in the Harmonized System according to standardized customs codes.2  Furthermore, we demonstrate in that issue how Brazil fails to notify Comtrade aboout the information on exports of handguns and we thus wish to point out, correct and provide the reader with accurate data. 3

We demonstrate in the current article that this type of problem does not merely occur in the case of handguns, but also with another important exported product: ammunition for small arms.4  However Brazil isn not the world’s only country with this kind of data reporting problem. On the question of ammunition, Mexico, a large regional exporter, also avoids declaring its exports of bullet loaded cartridges. Moreover, everything indicates that exports of bullet loaded cartridges are informed as shotgun shells by both countries.

Where do the Brazilian and Mexican cartridges go? We know that both countries have a competitive manufacturer on the international market: Companhia Brasileira de Cartuchos (CBC), in Brazil, and Industrias Tecnos, in Mexico. Both concentrate most of production on bullet loaded cartridges. In CBC’s case, 88% of the production is made of bullet loaded cartridges (for rifled barrel weapons such as rifles, pistols and revolvers),5  and, in the past 10 years, an average of 41% of the total income was earned from exports 6. Moreover, according to CBC’s USA branch, Magtech, the company sells the following types of bullet loaded cartridges on the American market: .25 Auto, .32 Auto, .32 S&W, .32 S&W Long, .380 Auto, 9 mm Luger, 9 x 21 mm, .38 Super Auto, .38 S&W, .38 Special, .357 Magnum, .40 S&W, .44 Special, .44 REM Magnum, .45 GAP, .45 Auto, .45 Long Colt, .454 Casull, .500 S&W, .40-44 Winchester, .30 Carbine e .50 BMG. 7 CBC is also an important exporter of ammunition for rifles used by the armed forces of Colombia 8.

Concurrently, Industrias Tecnos, manufacturer of the brand Águila, is the main cartridge producer in Mexico and the USA is their most important client.9  Like CBC, they have a local branch for distribution in the American market, Centurion Ordnance, Inc., which commercializes the brand Golden Eagle. The types of cartridges Industrias Tecnos produces are: .22 .25 Auto, .32 Auto, .32 S&W, 38 Special, .38 Super Auto, .45 ACP, .380 Auto,  9 mm, .357 Magnum, .40 S&W, .223 Remington .30 Carbine (this one intended for the external market) and shotgun shells of the following caliber:12, 16, 20, 28 and  410.10  Therefore the importance of the United States as a commercial partner is clear, as much for Brazil as for Mexico.

Since 2004 the Small Arms Survey’s yearbook evaluates the transparency of the data declared by governments to Comtrade through its “trade transparency barometer” 11 According to this system, the USA is the most transparent country when referring to SALW exports. Besides the USA, other countries such as France, Norway, Germany, Finland and Switzerland also attain a good transparency level in their Comtrade declarations.12  These countries assert they imported bullet loaded cartridges from Brazil in the last 15 years, yet Brazil and Mexico declare having exported during the same period USD 365 million worth of category 9306.21 – Shotgun shells , but almost none of its main product, that is, bullet loaded cartridges (9306.30 - ammunition for small arms).

Table with correlation of categories classified in the Harmonized System with the types presented by NISAT.

Source: Harmonized System (HS); Norwegian Initiative on Small Arms Transfers (Nisat). Elaborated by the authors.

How do we know this? The best way to identify misclassified data is to compare Brazil and Mexico’s exports with the aforementioned countries’ imports in the pertinent categories.

We had initially decided to compare the statistics of the five biggest buyers of Brazilian and Mexican cartridges during the 2000-2005 period. However, countries such as Saudi Arabia, Algeria, Belgium and Colombia did not  declare the bullet loaded cartridge imports from Brazil, or declared them at a much smaller value. The same was true for ammunition for shotguns. 13 This was also Mexico’s case with regards to Honduras, Nicaragua, Paraguay and Venezuela. 14 Considering these limitations, we decided to compare with those countries which have had constant transactions in the past 15 years. In some cases, these transactions coincided with countries enjoying a good transparency level, according to the Small Arms Survey’s “Trade Transparency Barometer”.

Therefore, we find similar patterns in the comparison of Brazil’s export curves and the imports of Brazilian products by Germany, Finland Norway, New Zealand and Switzerland. In Mexico’s case, similar instances occurred with the following countries: Argentina, France and Uruguay. All of these examples are important to substantiate misclassification, yet none is more blatant than the comparison with the USA, which, as we described above, is Mexico’s largest partner and Brazil’s second largest. One must highlight that the American market is of strategic importance for the cartridge manufacturing companies of Brazil and Mexico.

In graph 1 and 2, anyone can see that it is impossible to “hide the bullets”, because the main partner showed us where they are. Meanwhile, we have 20 graphs, annexed, showing transactions with other commercial partners, all of them sustaining this situation.
Finally, when graphically comparing the commercial transactions, it becomes clear beyond a doubt that both Brazil and Mexico export bullet loaded cartridges, and lots of them. To be more precise, in this period, they amounted to USD 321 million for Brazil and USD 43 million for Mexico.

Graph 1 - Brazil exports of 9306.21 (shotgun shells) vs. USA imports of 9306.30 (bullet loaded cartridges), in current USD, 1990 - 2005.

 
Note: Brazil declared exports of 9306.30 between 1994 and 1996.

Source: Nisat/Viva Rio Analysis.

Graph 2 - Mexico exports of 9306.21 (shotgun shells) vs. USA imports of 9306.30 (bullet loaded cartridges), in current USD, 1990 - 2005.

Note: Mexico declared exports of 9306.30 as of 2002, to the USA

Source: Nisat/Viva Rio Analysis.

1  Pablo Dreyfus is Research Coordinator of Viva Rio’s Arms Control Project and Editor in Chief of En la Mira. Julio César Purcena is researcher at Viva Rio’s Arms Control Project and staff member of En la Mira.
2  For more information on the HS, consult World Customs Organization (WCO) (http://www.wcoomd.org/home_wco_topics_hsoverviewboxes.htm) and En la Mira n°12 Exports and Imports of Small Arms and Light Weapons, Parts and Ammunition in Latin America and the Caribbean, 2000-2005. Rio de Janeiro, 2007, pp 1-18, available at <http://www.comunidadesegura.org/files/active/0/relatorio_portugues_final1.pdf>
3  The subject has been identified in other publications. See: Dreyfus, Pablo; Lessing, Benjamin and Purcena, Júlio Cesar, 2005, A Indústria de Brasileira de armas leves e de pequeno porte: Produção Legal e Comércio. (The Brazilian Small Arms and Light Weapon’s Industry: Legal Production and Commerce) In Fernandes, Rubem César (coordinator) Brasil: as armas e as vítimas. (Brazil: the Arms and the Victims) Rio de Janeiro: 7 Letras, 2005. pp. 117 -119. Available at: <http://www.comunidadesegura.org/files/active/0/vitimas_armas_producao_comercio.pdf>; see also: Small Arms Survey 2007: Guns and the City. Cambridge: Cambridge University Press, 2007, pp. 94-97. and En la Mira nº. 12. pp. 15-17.
4  Ammunition for small arms refer to categories 9306.21 (Shotgun Shells) and 9306,30 (Other cartridges and parts thereof) of the Harmonized System - HS. Further in the text category 9306.30 will be labeled as ‘bullet cartridges’.
5  Dreyfus, Pablo; Lessing, Benjamin e Purcena, Júlio Cesar. 2005. p. 122.
6  Consult document 10.03 – Produtos e/ ou Serviços – Clientes Principais (Products and Services - Main Clients). Informações Anuais – IAN – da Comissão de Valores Mobiliários – CVM, vários anos. (Yearly informations - IAN - of the Comission of Real Estate Value - CVM, several years.) Available at: http://www.cvm.gov.br/
7  The catalogue of  the different bullet loaded cartridge types manufactured by CBC and commercialized on the American market by Magtech, a branch of CBC, is available here: <http://www.magtechammunition.com/docs/MagtechCatalog.pdf>
8  See Dreyfus, Pablo; Lessing, Benjamin e Purcena, Júlio Cesar. 2005. p. 104. and  Small Arms Survey 2007. p.307.
9  Small Arms Survey, Small Arms Survey 2004: Rights at Risk. Oxford: Oxford University Press, 2004, pp. 24-25. and Dreyfus, Pablo and Lessing, Benjamin, Production and Exports of Small Arms and Light Weapons and Ammunition in South America and Mexico, Background paper produced for the Small Arms Survey 2004. Rio de Janeiro, 2003. p. 46.
10 idem
11 More information on the “barometer” is available in: Small Arms Survey 2004. pp. 114-117.
12 Small Arms Survey 2007. pp. 94-97.
13 Brazil declared exports of 9306.21 (Shotgun Shells) to Saudi Arabia between 2001 and 2005, while Saudi Arabia declared no exchange in category 9306.30 (other cartridges) during that period. Brazil declared exports of  9306.21 (Shotgun Shells) to Algeria between 2001 and 2004 while Algeria declared no exchange in category 9306.30 (other cartridges) during that period. Brazil declared exports of  9306.21 (Shotgun Shells) to Belgium between 2001 and 2005 while Belgium declared no exchange in category 9306.30 (other cartridges) during that period. Finally, Brazil declared exports of 9306.21 (Shotgun Shells) to Colombia between 2000 and 20005 for a total of USD 35 million and Colombia declared imports of category 9306.30 (other cartridges) in the same period for a total of USD 7 million, which represents 21% of  total exports. Data available at NISAT database <www.nisat.org>.    
14 Mexico declared exports of  9306.21 (Shotgun Shells) to Honduras between 2002 and 2005 for a total of USD 2,2 million while Honduras declared imports in category 9306.30 (other cartridges) in 2003, 2004 and 2005 for a total of USD 1,7 million. Mexico declared exports of  9306.21 (Shotgun Shells) to Nicaragua between 2001 and 2005, while Nicaragua declared no exchange in category 9306.30 (other cartridges) during this period. Mexico declared exports of  9306.21 (Shotgun Shells) to Paraguay between 2000 and 2005 for a total of USD1,6 million while Paraguay declared imports in category 9306.30 (other cartridges) in 2003, 2004 and 2005 totaling USD 0,9 million. Mexico declared exports of  9306.21 (Shotgun Shells) to Venezuela between 2000 and 2005, while Venezuela declared no exchange in category 9306.30 (other cartridges) during this period. Data available at NISAT database <www.nisat.org>.    

Annex

Brazil exports of 9306.21 (shotgun shells) vs. Germany imports of 9306.30 (bullet loaded cartridges), in  USD current, 1990 - 2005

Note: Brazil declared exports of 9306.30 between 1994 and 1996.

Source: NISAT/ Viva Rio Analysis

Brazil exports of 9306.21 (shotgun shells) vs. Finland imports of 9306.30 (bullet loaded cartridges), in current USD, 1990 - 2005.

 
Note: Brazil declared exports of 9306.30 between 1994 and 1996.

Source: NISAT/ Viva Rio Analysis

Brazil exports of 9306.21 (shotgun shells) vs. Norway imports of 9306.30(bullet loaded cartridges), in USD current, 1990 – 2005

Note: Brazil declared exports of 9306.30 between 1994 and 1996.

Source: NISAT/ Viva Rio Analysis 

Brazil exports of 9306.21 (shotgun shells) vs. New Zealand imports of 9306.30 (bullet loaded cartridges), in  USD current, 1990 - 2005.

Note: Brazil declared exports of 9306.30 between 1994 and 1996.

Source: NISAT/ Viva Rio Analysis.

Brazil exports of 9306.21(shotgun shells) vs. Switzerland imports of 9306.30 (bullet loaded cartridges), in USD current, 1990 - 2005.

 
Note: Brazil declared exports of 9306.30 between 1994 and 1996.

Source: NISAT/Viva Rio Analysis.