Cisco Offices Raided, Execs Arrested In Brazil

Many readers are writing in about the raids and arrests in Brazil's Cisco operation. At least 40 people were arrested earlier today, and Brazilian authorities asked the US to issue arrest warrants for five more suspects in this country. The allegation is that Cisco brought at least $500M of equipment into Brazil without properly paying import duties, and now owes over $826M in taxes, fines, and interest.

Would have gotten away with it too if it weren't f

[cez (539085)]

those meddling kids!*(&$!#

Basically... *Shwing* emerging markets.

"Damn, imagine if we weren't direct shipping to clients and had to pay taxes on the real value of all this shit!"

How accounting didn't realize this, or who's on top of the ladder of people in the know the article doesn't begin to speculate...

Corporate World at its finest, do it until caught, then pay a fine that doesn't affect the bottom line.

FTFA:

In raids that began Tuesday, 650 police and tax agents executed 93 search warrants and arrested 40 people involved in the alleged scheme set up by Brazilian businessmen to benefit the U.S. company, the AP reported, citing a statement from Brazil's federal police.

Goods were shipped from tax havens like Panama, the Bahamas and the British Virgin islands to Brazilian clients to avoid local taxes, and the value of the products was underestimated, the AP report said.

The investigation by Brazilian authorities began two years ago, according to the AP report.

PS: This is the only text at all on Page 2.

Page 2 of 2

Cisco started operations in Brazil in 1994 and has sites in Sao Paulo, Rio de Janeiro and Brasilia.

Re:Would have gotten away with it too if it weren'

[v1 (525388)]

those meddling kids!*(&$!#

and their dog. musn't forget the dog

Re:Would have gotten away with it too if it weren'

[kmac06 (608921)]

I think $826,000,000 will affect anyone's bottom line. Of course who knows what they'll actually end up paying...

Only the stupid pay taxes in Brazil

[mangu (126918)]

I'm a Brazilian citizen, and I don't have to post AC to state this: I only pay taxes as a last resort.

What would you do if you had to pay a sales tax of 40%?

What would you do if you had to pay import duties of 100%?

What would you do if you had to pay a total of 70 (seventy) different taxes to city, state, and federal government on a single product?

This is what happens when public servants can retire after, in some cases, eight years of "work", with full pay. Getting promotions and raises after retiring. Brazil is the paradise of public servants. Everyone I know is trying to get a job as a public servant. I know of people who have gone through five years of college to get a job as a street sweeper.

That's why the Transparency International organization states that "Some of the countries that have a significantly worse rating since 2005 include Brazil," [infoplease.com].

If only we would shoot all public servants in the street, Brazil could be the richest country in the world, but, unfortunately, too many people are greedy, and too many Brazilians allow this situation to continue because they themselves want to get a public job...

Re:

[packeteer (566398)]

The taxes are probably so high BECAUSE of the the fact that nobody pays.

Uhhh, well, that's about 6 buckets of retarded

[Sycraft-fu (314770)]

If you raise taxes, you get less compliance, not more. You can raise them to the point where compliance is a literal impossibility and it sounds like they are reaching that point, or passed it. The workable answer is to have reasonable taxes and work on increasing compliance.

Imagine if a store took a similar tactic: Some people steal merchandise, and others simply choose to go to other stores. Rather than perhaps raise prices a bit to cover costs and work on advertising and loss prevention the owner says "Well because people aren't buying, I have to double prices." Now the number of shoppers drops even more, so the owner again says "Even less people are shopping here, so I have to triple my new prices." Eventually nobody at all buys anything because it's just too expensive.

Similar shit with taxes. If the government raises your taxes a bit, maybe you complain but you still pay them. But let's suppose now that the government set them to an unaffordable level. Suppose that the government took 50% of your income, sales tax was also 50% and then other taxes like property tax added up to be over 100% of the rest of your income. Suppose that there was literally no way you could pay all the taxes. What would you do? Live in the street and try to pay them, or simply avoid them to the maximum extent possible?

It's easy to get a high and might attitude of "Well everyone should just pay," when it's not your ass in the fire and your family going hungry. However you try it some time, see how it goes.

If people cannot comply with the law, they just won't.

Re:Only the stupid pay taxes in Brazil

[by Anonymous Coward]

but most people do pay! brazil arguably has one of the more sophisticated tax collection systems around, and they have been breaking tax collection records year after year.

see, salary tax is collected by your employer, so no way to skip that. sales tax data is cross-reference with business income tax, so it's easy to detect who's not paying, finally there's a financial movement tax (CPMF) with takes 0.38% of all money coming out from (not into) your bank accounts, automatically. when they cross-reference CPMF, income tax and sales tax, you basically got all your bases covered. and if memory serves me right, capital gains tax is also automatically collected by your bank or broker the moment you cash in the money from the transactions.

the problem is that they charge a lot, they collect a lot and give almost nothing back. police? marginally effective, but in fact most of the population are scared of them. legal system? any cases take years to even begin being heard. public health system? don't get me started on that. is a s***hole, all capable citizens resort to private health insurance. public schools? horrible, able citizens put their kids on private schools. the military? I'm not very impressed and their budget is really small in GDP terms compared to our neighbours.

so they tax a lot but no one gets anything back and there's always a fiscal loss. the money is going somewhere and it is not into my pocket.

therefore I submit to you: why pay? at all?

Re:Only the stupid pay taxes in Brazil

[amendonca (679491)]

I am brazilian as well and I agree that the tax system there is idiotic. The distorted logic is that high import tariffs somehow foster the development of a national industry. It's a game of vested interests, bribes, corruption, etc.

However, if CISCO is found guilty I will commend the authorities for what they're doing.

Reality, my friend, is that people shouldn't choose which laws to follow, which laws to break. The involved executives, if proven guilty, are not preaching civil disobedience. Instead, they want to increase the bottom line and have a fat bonus at the end of the year. That's exactly the reason why Brazil is what it is today. And by somehow condoning or justifying their business practices we're simply perpetuating the problem. Can't we just be honest and obey the freaking law? Really ... is that too much to ask?

Finally, your characterization of the problem with public servants in Brazil wasn't exact, I'm afraid. It's true that we don't have the entrepreneurial spirit seen in countries such as the US, and many people do grow up to work for the government, partly because of also distorted labour laws, who give these people the so called "stability", which can be understood as "I can be a slack and not get fired".

However, many public servants are responsible citizens and you shouldn't hold that against them. Both my parents were public servants (they retired after 30-something years working) and they are some of the most hard working people I've ever seen. I have many friends who work for the government, some by choice, and they are all responsible, hard-working people. And just to clarify, I believe only congressmen and senators retire after 8 years. Statistically speaking they are the vast minority.

My 2 cents.

Regards,
Andre

Re:Would have gotten away with it too if it weren'

[TheVelvetFlamebait (986083)]

Corporate World at its finest, do it until caught, then pay a fine that doesn't affect the bottom line.

Care to explain your voodoo economics?

Re:

[cunina (986893)]

Paying taxes isn't stupid if your government provides worthwhile services. And if it doesn't, it probably because you have the kind of culture where people think it's cool to avoid paying taxes.

Re:Would have gotten away with it too if it weren'

[rbanffy (584143)]

I am a Brazilian ./er, so I will comment.

What your friend's father did 35 years ago was possible. Some kinds of tax evasion are still possible now, but, with the advance of computing technology, it is increasingly more difficult to do so.

What the folks at Cisco are being accused of doing is a massive effort to avoid paying a whole lot of import taxes. If you consider their competitors point-of-view, they are committing fraud in order to offer their products for prices their competitors can't match, driving them out of the market.

Not pretty by any point-of-view.

Re:Would have gotten away with it too if it weren'

[jcr (53032)]

So much for Brazil's IT sector for the next decade or so.

Any businessman would have to be nuts to open an office there after this.

-jcr

Re:Would have gotten away with it too if it weren'

[rbanffy (584143)]

"Any businessman wanting to evade US$ 1.5 billion in taxes would have to be nuts to open an office there after this."

There. Corrected that for you.

About time

[by Anonymous Coward]

I can't believe they have been running an enterprise without any drive redundancy.

As far as the arresting execs, I would check permissions and test memory, and try rerunning them.

In related news...

[NF6X (725054)]

U.S. officials were asked to reply to the arrest warrant requests by telephone, as all email service in Brazil appears to be out of order.

Re:In related news...

[Brian Gordon (987471)]

Brazil law enforcement frustrated by the inoperability of the nation-wide VoIP network. US officials will recieve notice by pony express in approximately 7 months.

Re:

[teh moges (875080)]

When I read the above comments the first time, I assumed they were jokes at the fact that it was Cisco that was being fined (and in an act of revenge they stop their routers from working, which presumably run most of the Internet). I never thought it was a joke at Brazil's expense.

Then I read your comment, then read the above comments again. Nope, still a Cisco reference

Re:

[rossifer (581396)]

The US government is unbelievably not corrupt. We have a two party system, and if one party even gets slightly corrupt, it's a massive scandal. People who think the US has a corrupt government are invariably lacking real perspective.

You're observation is that when one member or another of the government breaks the rules, the others hold them to task. And that means that there's no corruption. Hm.

So it's your position that as long as the payoffs happen within the rules, it can't be counted as corruption?

Re:Worse than ignorance, it's iggerunt.

[sapgau (413511)]

Wow, those other parties don't sound like very good options. I see why they have a two party system.

Re:I wasn't responding to your joke.

[NF6X (725054)]

I wasn't responding to your joke. I was responding to all the negative, unknowing comments from people who have not had the chance to compare the United States and Brazil.

Well, that's a relief. We can't let ignorant generalizations about a people go unchallenged.

Re:Worse than ignorance, it's iggerunt.

[manoelhc (1172781)]

Romance languages like java?

Re:Worse than ignorance, it's iggerunt.

[Santana (103744)]

Alternatively, since most of America speaks a latin derived language (except the USA and Anglo-Canada), we might start using Angloamerica for the exceptions.

Re:More about Brazil:

[milamber3 (173273)]

At first I thought this was a joke post...

More about Brazil:

9) The Brazilian media constantly emphasizes violent events in
Brazilian cities. However, the murder rate in Rio de Janeiro was, the last
time I checked, about two-thirds of the murder rate in the U.S. capital city,
Washington, D.C.

The murder rate in Rio de Janeiro is about 60 per 100,000 people and the rate in Washington DC is about 35 per 100,000 people so you really need to work on keeping up to date if you plan to make claims like this.

10) Brazil is the music appreciation capital of the world. Brazilians
have all the styles of their own music, and those of other countries, too.

What does this even mean. Every kind of music can be found in many many places in the US. Does that make us the music appreciation capital too? Is there some kind of international body that decides these things? I googled but came up with nothing so I'm left to assume you are just pulling things out of thin air cause they sound good.

11) Several years ago the most popular local band in Portland, Oregon
was Rubberneck [amazon.com]. On an average night they would draw an
audience of 40. A local band in a small town in Brazil drew an audience of
800.

There is going to be a lot more choices for entertainment in a place like Portland as compared to a small town in Brazil. This will lead to less people at any one show but not necessarily less going to enjoy a show. This is a weak argument that tries to make parallels where none should be made.

12) Brazilians often know all the lyrics to numerous Brazilian songs.

WTF does this mean?!? Please find a country that has music with lyrics and doesn't have people who know numerous of the songs. Then, maybe, this point would be worth typing out.

13) There is a magazine about Brazil called Brazzil [brazzil.com], based in Los Angeles,USA.

That's good. We probably have magazines for the majority of country in the world.

14) Brazilians are often very socially skilled.

Wow, I bet they eat and sleep like normal people as well but you forgot to list it.

15) Brazil is approximately as large as the continental United
States.

It's not a lot but since Brazil is 200,000 square miles smaller I wouldn't say it's the same size. I also wouldn't use total land mass as the best measurement. How about productivity / population?

Fact..

[msimm (580077)]

16) Brazilian chicks are hot. Period.

17) There's also some interesting photographers, artist and music. A lot actually.

Re:

[jombeewoof (1107009)]

But don't make it a show, with almost live television coverage. That's not the right way to run a country.

But it IS the American way of doing things.

Re:

[superwiz (655733)]

Says Brazil. Aaah.... You know it's so rare an occasion when the moral of Atlas Shrugged is so apropos that I generally have to dismiss Objectivism as a workable philosophy of life. But here it actually works. If Cisco has any balls, they'll simply withdraw from Brazil. Never ship any routers there again. Since their routers are so good they are essentially the only ones usable, that will, in fact, push Brazil into 20th century. This is one of those rare examples when the Atlas can shrug with impunit

brazil is insane

[Lord Ender (156273)]

Sending them a tax bill seems a bit more sensible than arresting every janitor and secretary in the office. Is Brazil trying to frighten away foreign investment?

Re:brazil is insane

[ObsessiveMathsFreak (773371)]

Is Brazil trying to frighten away foreign investment?

Hear, hear! I mean Corporate Executives being arrested! Some of these men have played gold with Very Important People?

Who do these Brazilians think they are anyway? Some kind of sovereign nation?

Drive Away Investment?

[Alaren (682568)]

The way totalitarianism is keeping China locked in poverty, with little hope of economic growth?

Also, RTFA--it's not an "oversight" when you ship through multiple countries in such a way that just happens to evade the tax man.

Personally, I'm tired of seeing business criminals take their 6 months of probation but get to keep their ill-gotten gains--so I'd rather see fines than jail time for these guys. But this is certainly one way to tell foreign investors: when you do business in Brazil, you pay taxes to Brazil. Now if only the U.S. could convince some of its own off-shored corporations of something similar...

Re:

[1u3hr (530656)]

arresting a a large portion of their workforce, for what could be an oversight, is a very silly move.

FTFA: "Goods were shipped from tax havens like Panama, the Bahamas and the British Virgin islands to Brazilian clients to avoid local taxes, and the value of the products was underestimated."

Yeah, a mistake anyone could make. Who hasn't accidentally shipped their goods via the BVI?

Brazil import laws

[yalmissari (1120097)]

I'm shocked that it got this far. I've worked in international forwarding for over a decade, and have done more heavyweight shipments to Brazil than I can count. The laws for importation of almost ANYTHING is strict as hell. In almost all cases import duties and taxes must be paid for upfront before the shipment will be released from Brazilian customs. I have a feeling that if arrests were being made at CISCO there were also people in customs being taken down. Brazil is kind of a paradox in this regard. They have the strictest of import laws, but their system is damn corrupt. It would also not surprise me if this was nothing more than a money grab by the Brazilian government.

Re:

[dbIII (701233)]

They have the strictest of import laws, but their system is damn corrupt.

You get this wherever there is a bit of corruption. On one side if you have people that want to stamp it out they have to be strict. On the other side if you have people that want to increase the amount of corruption they make the conditions a lot stricter so you either have to jump through hundreds of hoops or pay them the bribe to make it all simple.

As for blaming the Brazillians entirely - there seems to be a tendancy for many US

Translation

[by Anonymous Coward]

"Somebody in Brazil didn't get their cut of the bribe money."

I am American who set up a software company in India; a place with corruption on par with Brazil. Let me tell you how it works in places like these:

- There are laws, but they really don't mean anything.

Well, technically this isn't true. They amount to a list of things you can be charged with, should the authorities decide to make it so. In America you hire legal advice, get the proper paperwork from the government, fill out all the forms, and submit them on time with the appropriate payment; done. India and Brazil have a different system; and nobody (especially a government employee) is interested in helping you obtain the right paperwork and keep it above board. You see, *the perk* of a government job is THE BRIBE. A position in the government has a tiny salary, and your teenage kids probably earn more in babysitting. The majority of your income will be derived from bribes given by the people you serve. Americans might best understand it as a "filing fee", but without all the annoying paperwork and signatures.

This in pandemic through every part of every government office and official. From the clerk where you pay a parking ticket, the average cop on the street, all the way up to the very top of the chain. Most of these offices have forms, but filling them out is a formality; they probably won't read them, and they'll be locked away in a box and water damaged beyond recovery in a month or so. Computer backups? Ha! Yeah right. You're not going to find computers in government offices. How does that help in taking a bribe?

I am being very serious in saying all this, and I will recount two of my own true life experiences for you now:

1. I personally brought 10 computers with me into India. I was instructed by the head cop at the airport in Delhi what to write on the form (not 10 computers!), and how much to pay at the customs window. The remainder of the money went into his pocket after I handed it to one of his junior officers. (The junior officer takes the money, because the senior officer can protect him; but not vice versa.); my attorney in India estimates that after all of it, we saved $500 on the regular customs fees; which includes his own cut, for helping to arrange it.

2. I got married in India. In order to get my wedding certificate, I paid a Rs.4000/- bribe (about ~$80 USD at the time) to the clerk. It wasn't required, I could have simply shown up every day for two years until they finally got sick of dealing with me. Or, I can pay the "filing fee" and be on my way.

According to my co-worker, Brazil is really no different. Corruption is pandemic there as well. Instead of tensions between Hindus and Muslims, it's gangs that come down out of the mountains to raid the towns. (Americans thinking of traveling there might consider kidnapping insurance, as this is also not uncommon.)

------

Why would Brazil hold Cisco's peons in custody? Legal hostages for bribe money; that is all.

Next time, Cisco will need to remember to pay the "filing fee". "When in Rome..." always applies, no matter where you travel on this big dirtball.

Re:

[huckda (398277)]

Cisco's peons is quite the adequate terminology for this...
as far as trying to siphon out wtf was ACTUALLY arrested and if it was TRULY Cisco employees or merely a Brasilian firm that handles the importation of Cisco's equipment for them, good luck at that...
from what I can tell from the weak reporting in the article is that approximately 40 Brasilian businessmen were arrested, with no disclosure of a business name other than the "fact" that they dealt with importing Cisco products.

Poor, pathetic reporting

Disgusting

[Arthur B. (806360)]

So... Cisco's big and Brazil government figures it can make some quick bucks by looting... hey, who cares if this network equipment actually helps Brazil to develop, Cisco has money, we have guns, let's take it and let everyone know that they can't do business here without paying protection money. Oh sure on the short term they (the officials) will get the money and people will keep investing in Brazil, on the long term they're driving everyone to poverty.

Silly Brazil

[bucky0 (229117)]

I travel to brazil pretty often because of all the family I have that lives there. The tarrifs on electronics and DVDs is a ridiculous amount like 50%. In fact, to make some cash, I know people who will come to the states and smuggle iPods back. If they get through customs, they can make a pretty penny selling them to people in Brazil. (Prices are about 2x of what they are in the states because of the import duties.

Clearly, this was a routing problem

[SpaceLifeForm (228190)]

Is there a patch in the works?

how could this happen ...

[Shadukar (102027)]

I think a lot of people do not realize how these things happen. basically, in any profit driven company, everyone has to answer to accountants.

Yeah, the ceo, the manager, the compliance officers, etc are not accountants. But they have to act like accountants. Profit/bottom line is everything - if you are doing something that is hurting the profit/bottom line you are doing it wrong - people are asking questions. At the end of the day, companies are out to make money and absolutely nothing else.

Sure, there are nice slogans, customers first, service is our priority, etc. American Express (where i used to work) used to distribute these nice flow diagrams that show Happy Staff ===> Happy Customers ===> Happy shareholders. There's focuses and sigma programs and etc.

At the end o the day however, it is all about profits, revenue - money.

How does this tie with Brazil "pwning" some executives ?

Someone came to the executives and said "I know a guy in Brazil that can help us save millions in tax, compliance officers/lawyers have checked it out and it is pretty borderline. Risk management department have cleared it as acceptable risk vs the savings, is it ok to go ahead ?"

Now, perhaps one or two executives thought to themselves "hrm, this doesn't sound good" or "we'll get busted and get raped with cattle prods"

But what can you say/do when your primary consideration is the next quarter profit projection or current quarter revenue reports ? You just cant argue against higher profit/revenue.

At the end of the day (again) any executive has a dozen explanations/justifications for their actions:

- the compliance officers/lawyers cleared it.
- we were direct orders to meet the profit projections
- we were direct orders to meet our key performance indicators
- it is the mission/directive of our department to maximise profit/efficiency/kpi/etc
- risk management cleared it
- we were only competing with the competitors

I wish I was at home and could get the appropriate quote from one of the Dune books where the chapter start quote talks about the qualities of a bureaucrat - how the epitome of a perfect bureaucrat is the loss of human qualities and strictly following procedures/policies.

what i am trying to say is, in a long convulsed way, is that not only there is no morality in big companies, there is no accountability for legal or moral wrong doings (quite often two separate things).

I for one applaud our new executive-arresting overlords!

In the end...

[Merovign (557032)]

This will probably turn into a pretty rapid-fire he-said she-said involving bribes, corruption, and really bad moves.

The high tarrifs, bribes, and corrupt officials make this kind of thing inevitable, but it was still stupid to try to get around the taxes. Understandable, in the sense of closing your fruit stall during the shift of the corrupt cop who collects protection money, but still stupid.

The problem is that, like India, the Brazil market is big enough for people to take risks to sell there.

We'll have to see how it turns out, but I'd place a small bet that the local Cisco office bribed the wrong official - who either turned on them or done got themselves busted.

That's why a (relatively) honest system is so important - certainty.

Jamming Packets

[davidsyes (765062)]

Leads to an array of RAIDs...

How to do business in corrupt countries

[viking80 (697716)]

Anyone that has ever tried to do business in Brazil or many other developing nations are familiar with the hassles of dealing with a thoroughly corrupt system.

If you are installing some infrastructure in Brazil, you will have to pay off corrupt officials at every turn.

The biggest hassle is often toward the end of a project when you need to express ship some equipment to finish the work, and find that customs are holding onto the items awaiting a bribe. Maybe the customs officials are leaving the shipment outside in the rain to make sure you understand the importance of the bribe.

If the box you are shipping has a declared value of $100,000 you will be shaken down and hassled as infinitum as all the officials know you will and can pay a lot to get the box.

If you on the other hand ship the same box with a declared value of $50, it goes under the radar, or you may have to pay some low-level agent a few $$ to get it through.

This problem is magnified by the fact that US law does makes it illegal to pay bribes. Therefore you can not enter the item on the expense report. It is often money out of your own pocket.

So basically your choices are:
1. Do everything properly: Declare value, refuse to pay bribes (Illegal by US law), and have all your gear lost in customs for months, and very likely damaged.
2. Declare the value, and pay bribes out of your own pocket or with the assistance of your company. You have now committed a crime in the USA.
3. Declare the value low to go under the radar in the corrupt country. You have now committed a crime in the corrupt country, but hey, you can alway bribe your way out of it if you are cought.

Re:How to do business in corrupt countries

[Rick Genter (315800)]

So basically your choices are:
1. Do everything properly: Declare value, refuse to pay bribes (Illegal by US law), and have all your gear lost in customs for months, and very likely damaged.
2. Declare the value, and pay bribes out of your own pocket or with the assistance of your company. You have now committed a crime in the USA.
3. Declare the value low to go under the radar in the corrupt country. You have now committed a crime in the corrupt country, but hey, you can alway bribe your way out of it if you are cought.

4. Don't do business in Brazil.

If enough major corporations chose option 4, the problem would rectify itself.

I'm Brazilian, so I know what I'm saying...

[duwde (665187)]

I'm Brazilian, so if you wanna hear the REAL history: Yes, Brazil has a lot of corruption, everybody knows... But that has NOTHING to do with what happened with Cisco and a lot of other companies... Brazililian import duties are VERY HIGH, more than 100% in many cases, so Cisco (and others) were engaged in corruption schemes with the brazilian customs officials to import things paying almost none (or little) duties. I don't think cisco headquarters knew about that, that probably was something done by cisco executives in Brazil. Brazilian Federal Police is NOT corrupt (well, almost) and they REALLY work here, so they investigated this scheme for almost 2 years before charging a lot of people and arresting many... that include cisco employers, goverment custom officials and a many more... So you are right when you say Brazil has a lot of corruption, YES, that's true... But things are getting a little better year by year, and many people are being taken down... There is a lot of sensasionalism about this news, mainly because the "Cisco" is a brand everyone has heard about... but it's nothing new... almost everyday somebody is being arrested because of import fraud.

Message to Innovative companies from Brazil

[Bill, Shooter of Bul (629286)]

Don't do business here. We will screw you over with taxes. Please find another country near us that has better laws and let them reap the economic benefits. I hear Argentina is nice this time of year. I'm sure their blend of multiculturalism and straight forward laws will suit you tastes better.

Sincerely,

The country of Brazil

Multiculturalism?

[Wooky_linuxer (685371)]

No offense to my argentinian "hermanos", but Argentina is about as multicultural as a WASP meeting. I don't see why people are so upset with the case. People committed a crime (it is a criminal offense here), they go to jail. I wish more high-ups would go to jail when caught wrongdoing.

To all trolls that keep saying "stop doing business in Brazil", do you really think CISCO and others do business here because they want to be kind to us? They want us to have access to that-oh-so-nice-and-advanced american hardware so we can be happy? They want to sell their stuff and that's all. If they leave the market, someone else will take it. And in case you haven't noticed, China has been replacing US as a hardware provider. Perhaps they still haven't got routers as good as CISCO's, but they will eventually. And if american companies leave markets open to them, the quicker they will. So good luck for any american companies wishing to leave the brazilian market.

Besides, the ones who really suffer with the high taxes and corruption are brazilian people and consumers. I highly doubt CISCO passed on the savings they got to their clients. Stop whining just because some american company was caught red-handed.

Re:Pretty hefty tax rate...

[LBArrettAnderson (655246)]

Well, that figure includes fines and stuff... the actual tax rate is probably closer to 100%.

For some odd reason, latin american countries charge a ridiculous amount of tax on electronics. In the Dominican Republic you can expect to pay double or triple the normal price for any and all imported electronics. I tried to have a $300 camera sent to me via DHL, and they wanted $400 to pick it up from customs (13000 pesos).

I call that the opposite of progress... unfortunately many governments can't see beyond "now." "Oh hey... we can just charge a ridiculous amount of money on imports and make money!!! we win!"...... (I understand the tarrifs to help local businesses... but honestly... there aren't any camera manufacturers in any of those countries).

Re:

[isaac (2852)]

(I understand the tarrifs to help local businesses... but honestly... there aren't any camera manufacturers in any of those countries).

There sure won't be any local ones starting if those trade barriers fall.

A $400 tax on an imported $300 camera in the DR sounds pretty progressive to me - if you can afford a luxury good like an imported camera, you can almost certainly afford the tax bite. This kind of tax is harder to dodge than, say, a sales tax on local goods.

Re:

[1u3hr (530656)]

Huawei expands operations in Brazil, hundreds of jobs created. (Well, not hundreds, but probably as many as Cisco had.)

Re:Cisco's peons as hostages

[krotkruton (967718)]

The title of the actual article (emphasis mine):

Cisco offices raided, executives arrested in Brazil: reports

The first sentence in the article (emphasis, again, mine):

Senior executives of Cisco were reportedly arrested in Brazil this week in a tax fraud investigation of the company.

Now, which peons were you referring to? 40 arrests were made, and there is nothing in the article that says anything about "peons" as so many people keep saying.

Whoa.

[TheSHAD0W (258774)]

They're confiscating a brazilian routers? That's a lot.

[runs away]