Photo via Telam

Jorge Castillo, head of “La Salada” fair, Argentina’s largest informal market located in the district of Lomas de Zamora, was arrested today along with 30 other people, accused of being part of an unlawful association that blackmailed people who sell their products in the unregulated street fair. Three of the people arrested were police officers.

Police forces carried out 57 simultaneous raids in different parts of the Buenos Aires area, where they found numerous firearms and ammunition they claim belong to gangs that demand AR $500 per day to people who want to sell their products in the area adjacent to the fair.

Police also reported that during the raid that was conducted in his house in the district of Luján, Castillo tried to fend off the officers by shooting at them with a shotgun, wounding one of them in an eye.

Prosecutor in the case Sebastián Scalera informed the press that Castillo has already been charged with unlawful association. “They illegally exploited the stands, charged a fee to its occupants to stay there, a fee for security, another one for cleaning, a fee for a parking spot and one to actually park,” Scalera said. The prosecutor went on to say that the stands’ occupants were coerced into making these payments and, should they not comply, would be beaten.

According to a report published by the European Union, La Salada has the largest informal revenue in the world. Moreover, the Office of the United States Trade Representative has included the country in a list of countries whose unfair practices affect trademark rights.

Castillo
Castillo

According to Damián Di Pace, head of Focus Market consultancy, “there are 7,000 stands in the market and its surroundings, totaling 21,000 illegal business owners. This makes La Salada the largest center of illegal trade in the country.” Every week, hundreds of buses and other means of transportation bring hundreds of clients from all over the country, and even from some neighboring ones, eager to buy products for a much cheaper price than its market value.

Due to its success, the concept of La Salada was replicated throughout the country. According to Infobae, there are 63,312 similar stands in the country, distributed in 662 Salada-like markets. “Combined, they made AR $4,262 million in May alone. Between Salada-like makets and manteros (people who sell products on a blanket on the street, without paying any taxes for their activity), the projected revenue for 2017 is AR $71,500 million. That means the State is prevented from collecting AR$ 15,015 in unpaid added-value tax (IVA), we are not even taking into account the national and local taxes that a legally-established store pays,” Di Pace explained.

That’s why the confederation of small and medium-sized businesses (CAME) celebrated Castillo’s arrest, and provided more figures that reveal the extent of Argentina’s informal economy. You can check them out here.

Speaking to press today, Security Minister Patricia Bullrich and her counterpart in the Buenos Aires Province, Cristian Ritondo, praised the operation, which they called “a strike against mafias.” “A great part of this mafia that had been working in La Salada has been taken down. It’s a message for all those who work in the illegal sector of the economy in Argentina. Those who want to coerce, blackmail, charge fees and own the streets have no place in this Argentina,” said Bullrich.

“A great part of this mafia that had been working in La Salada has been taken down. It’s a message for all those who work in the illegal sector of the economy in Argentina. Those who want to coerce, blackmail, charge fees and own the streets have no place in [this] Argentina,” said Bullrich.

Both officials praised prosecutor Scalera’s work and argued that the illegal activities carried out in La Salada were conducted without any problem because of the cooperation the police force, members of the court, and officials from the former administration.

To illustrate this, Bullrich recalled that Former Domestic Trade Secretary Guillermo Moreno took Castillo to Angola as part of a trade delegation in 2012. “They showed him as a great example. By doing that, we were seeing great connivance. The former president took him to Angola as a great example. He was on all TV channels. Today he was in a shootout with the police,” Bullrich finished.