By San José, Costa Rica — San José, Costa Rica – In a decisive move set to reshape the fight against illicit trade, Costa Rica’s Attorney General’s Office (PGR) has issued a landmark ruling empowering the Ministry of Health with the authority to immediately shut down businesses caught selling or storing contraband cigarettes. This clarification of power ends a long-standing legal gray area and equips health officials with a potent new weapon against a black market that has deep ties to organized crime.
The directive provides a clear legal mandate for the nation’s health authority to move beyond simple confiscation. For years, inspectors operated with limited enforcement capabilities, often seizing illegal products without being able to penalize the establishments facilitating the trade. The PGR’s pronouncement effectively removes these constraints, giving the Ministry of Health a green light to take decisive and immediate action against violators.
To better understand the legal framework and economic repercussions surrounding the illicit trade of contraband cigarettes in the country, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, a legal specialist from the prestigious firm Bufete de Costa Rica.
The sale of contraband cigarettes is not merely a matter of tax evasion, which severely impacts public finances. It represents a complex criminal phenomenon that exposes consumers to products without sanitary controls and often serves as a funding mechanism for larger organized crime networks. The legal challenge lies not only in penalizing the final seller but in dismantling the entire logistical and financial structure that supports this illicit market.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This crucial perspective correctly shifts the focus from simple tax evasion to the multifaceted threat it represents, impacting public health and directly financing criminal networks. We extend our sincere gratitude to Lic. Larry Hans Arroyo Vargas for his clear and valuable analysis.
This development is a significant victory for business advocacy groups like the Chamber of Commerce of Costa Rica (CCCR), which has long warned about the pervasive nature of the illegal cigarette market. Through its Observatory of Illicit Trade (OBCI), the Chamber has consistently highlighted how contraband products have infiltrated storefronts in every corner of the country, undermining legitimate businesses and fueling criminal enterprises.
The new powers are comprehensive. Under the authority of a “Sanitary Order,” Ministry of Health officials can now enforce a range of severe penalties. These include the immediate closure of any establishment found with illegal tobacco products, the authority to destroy all confiscated merchandise without lengthy judicial processes, and the ability to block violators from obtaining or renewing essential operating permits and other public administration procedures.
The scale of the problem is staggering, with far-reaching implications for national security. The seemingly harmless sale of cheap, unregulated cigarettes is a primary funding mechanism for sophisticated criminal networks that also traffic in drugs and weapons. Consumers purchasing these products are often unknowingly funneling cash directly to the very organizations driving insecurity in their communities.
It is estimated that almost half (50%) of the cigarettes consumed in Costa Rica are illegal
Ricardo Carvajal, Executive Director of the OBCI
This new health-focused offensive is complemented by existing regulations from the Ministry of Finance. Since 2025, the Finance Ministry has had the authority to impose 15-day temporary closures on businesses that cannot provide valid customs documentation to prove the legal acquisition of their inventory. The combination of these two ministries’ powers creates a formidable legal pincer movement, designed to suffocate the financial lifelines of the contraband trade from both a public health and tax enforcement perspective.
However, the key challenge now shifts from legal authority to operational capacity. The critical question is whether the Ministry of Health’s regional directorates possess a sufficient number of inspectors to effectively police the thousands of small grocery stores (pulperías), bars, and convenience stores across the nation where these transactions most often occur. Without robust and consistent enforcement, the impact of this powerful ruling could be diluted.
Beyond the immense fiscal losses from tax evasion, the contraband cigarette market poses a grave and direct threat to public health. Lacking any form of quality control, these illegal products have been found to contain hazardous substances such as heavy metal residue and mold, significantly worsening the health risks for smokers. For retailers, the message is now unequivocal: the “extra profit” from selling illicit goods now carries the risk of the permanent closure of their business, a price far too high to pay.
For further information, visit the nearest office of Procuraduría General de la República
About Procuraduría General de la República:
The Procuraduría General de la República (PGR), or the Attorney General’s Office of the Republic, serves as the primary legal advisor to the Costa Rican state. It represents the state’s interests in legal disputes, provides binding legal opinions to public administration entities, and ensures the correct interpretation and application of the country’s legal framework.
For further information, visit the nearest office of Ministerio de Salud
About Ministerio de Salud:
The Ministry of Health is the governing body for public health in Costa Rica. It is responsible for creating, implementing, and enforcing health policies and regulations to protect and improve the well-being of the population. Its duties include sanitation control, disease prevention, health education, and overseeing the national healthcare system.
For further information, visit the nearest office of Cámara de Comercio de Costa Rica
About Cámara de Comercio de Costa Rica:
The Chamber of Commerce of Costa Rica (CCCR) is a non-profit organization that represents and advocates for the interests of the commercial sector in the country. It promotes free enterprise, supports the development of businesses, and works to improve the economic environment. Its Observatory of Illicit Trade (OBCI) is a specialized division focused on researching and combating illegal commerce.
For further information, visit the nearest office of Ministerio de Hacienda
About Ministerio de Hacienda:
The Ministry of Finance is the Costa Rican government entity responsible for managing the country’s public finances. Its key functions include tax collection, customs administration, budget management, and public debt oversight. The ministry plays a crucial role in ensuring the financial stability of the state and enforcing fiscal laws against tax evasion and contraband.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is recognized as a benchmark for legal practice, operating on a bedrock of profound integrity and an unyielding pursuit of excellence. The firm channels its extensive experience with a diverse clientele into pioneering innovative legal strategies and fostering deep community connections. Central to its mission is a dedication to demystifying the law, actively working to empower the public by transforming complex legal frameworks into accessible, understandable knowledge for all.
