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Cisco Offices Raided, Execs Arrested In Brazil 537

Posted by kdawson from the where's-my-white-hat dept.
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.
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Cisco Offices Raided, Execs Arrested In Brazil More

Cisco Offices Raided, Execs Arrested In Brazil

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  • 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' (Score:4, Funny)

      by v1 ( 525388 ) on Tuesday October 16, 2007 @08:43PM (#21004785) Homepage Journal
      those meddling kids!*(&$!#

      and their dog. musn't forget the dog

      • Re: (Score:2, Funny)

        by Anonymous Coward
        Wrats Wroight!
    • 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 (Score:5, Informative)

      by mangu ( 126918 ) on Tuesday October 16, 2007 @11:39PM (#21006119)
      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: (Score:3, Insightful)

        by 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 (Score:5, Insightful)

          by Sycraft-fu ( 314770 ) on Wednesday October 17, 2007 @02:30AM (#21007053)
          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 (Score:4, Informative)

          by Anonymous Coward on Wednesday October 17, 2007 @03:51AM (#21007497)
          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 (Score:5, Insightful)

        by amendonca ( 679491 ) on Wednesday October 17, 2007 @06:19AM (#21008213)
        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

    • 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?

  • About time (Score:5, Funny)

    by Anonymous Coward on Tuesday October 16, 2007 @08:41PM (#21004763)
    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... (Score:5, Funny)

    by __aajfby9338 ( 725054 ) on Tuesday October 16, 2007 @08:42PM (#21004769)
    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... (Score:5, Funny)

      by Brian Gordon ( 987471 ) on Tuesday October 16, 2007 @08:48PM (#21004815)
      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.
      • About Brazil: Someone ought to stop the iggerunt comments with some facts:

        1) Do you have billboards in your city? Sao Paulo, Brazil, one of the biggest cities in the world does not [flickr.com]. Sao Paulo is more advanced than most cities in that way.

        2) Officials from New York City visited Curitiba, Brazil to learn how to run a city [nytimes.com].

        3) Brazilians seem much happier than people in the U.S., even though people in the U.S., on average, have more money.

        4) It is not correct to call Brazil part of "Latin America".

        • Re: (Score:3, Insightful)

          by 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
  • your-nafta-fu-is-weak dept.

    Also in the your-nafta-fu-is-no-good-down-here dept.

  • brazil is insane (Score:3, Insightful)

    by Lord Ender ( 156273 ) on Tuesday October 16, 2007 @08:48PM (#21004817) Homepage
    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?

    • 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?

    • Re: (Score:2)

      by pembo13 ( 770295 )
      Countries aren't suppose to bow to businesses.
      • Countries aren't supposed to treat businesses like criminals either, if they did this to an individual people would be up in arms, why should it be right just because they did it to a corporation? I mean, it's not like Cisco's going to run away, if they got the bill they'd pretty much have to pay up.

        • Countries aren't supposed to treat businesses like criminals either...


          If they are committing criminal acts they are.

          Just how long will Conrad Black spend in jail again?

    • Is Brazil trying to frighten away foreign investment?

      What the hell is the point of investments where the gov't is cheated out of hundreds of millions of dollars? Wouldn't it be kinda stupid for a gov't to encourage this? Or maybe you mean the Halliburton kind of "investment". You must be drunk with the corporate master koolaid to even assume that this bust isn't at all legit.
      • Except that Cisco did nothing immoral in this. While Cisco may have been in technical violation of a law, that is not the same as being immoral. If this was their equipment, then why should they not be able to use it in Brazil? If this was their company equipment, to be used by the company, never to be resold in Brazil, then Cisco has cheated nobody.

        • Re: (Score:2)

          by Dunbal ( 464142 )
          technical violation of a law

          repeat it after me

          technical violation of a law
          technical violation of a law
          technical violation of a law
          technical violation of a law

          What does "moral" have to do with it?

        • Re: (Score:2)

          by hjf ( 703092 )
          Oh, so you know Brazil Import/Export laws now, do you? No you don't. Corporate offices are not tax-free zones. And containers are not diplomatic bags. The moment that equipment crossed the customs line, it was fully under Brazil's regulations and laws, and if that means they had to pay taxes for them, period.

        • Re: (Score:2)

          by 1u3hr ( 530656 )
          If this was their equipment, then why should they not be able to use it in Brazil?

          Cisco is not an ISP. They SELL equipment. Or how were they going to use 500 million dollars worth of gear in their office? And in any case, if you import goods to just about any country, you have to pay tax, regardless whether you're going to use it yourself or sell it. Try bringing a few expensive bottles of spirits or across any border to see how this works in microcosm.

    • RTFA. They were arresting executives, not the peons. Brazil's claim is massive fraud to evade taxes. That said, the ratio of police to those arrested was about 10 to 1, which suggests Brazil is acting in a very heavy-handed and inappropriate manner.

    • Re: (Score:2)

      by NMerriam ( 15122 )

      Is Brazil trying to frighten away foreign investment?


      Is Brazil trying to frighten tax evaders? Yes, yes they are. You can bet your ass that this will be a lot more effective at getting executives to comply with the law than some bill+interest would be.

    • Re: (Score:2)

      by Guppy06 ( 410832 )
      "Sending them a tax bill seems a bit more sensible than arresting every janitor and secretary in the office."

      Let's see... sending a bill to foreign executives in a foreign company, holders of foreign passports... what flight risk?

      The whole point of arresting someone is to make sure they show up to stand trial and/or pay their fines. Whether or not raiding their offices like this was truly necessary will be determined by whether the arrest requests made to the home nation are honored.

    • Re: (Score:2)

      by kindbud ( 90044 )
      Way to not read the article. Especially those of you who modded the parent Insightful. The charge is that there was a organized criminal ring to avoid import taxes, involving shipment from tax havens and the involvement of several Brazilian nationals. If you think someone is engaged in a multi-million dollar racketeering operation, you don't send them a tax bill, you call in the SWAT team, just like we do in America.
    • Cisco should be glad this didn't happen in the US. They would have been tasered.
      • Cisco should be glad this didn't happen in the US. They would have been tasered.

        Only if they were into the kinky shit. Let's face it, our "Elected Officials" line up to give blowjobs and other sexual favors to corporate interests. I'm not even sure they know why they do it anymore.

  • Brazil import laws (Score:3, Interesting)

    by yalmissari ( 1120097 ) on Tuesday October 16, 2007 @09:13PM (#21005057)
    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: (Score:2, Informative)

      by pdcull ( 469825 )
      The Globo TV news tonight reported that the goods were shipped in through Salvador airport, where customs officials were paid off to let them through.

      So yes, there were more people involved, who have also presumable been taken down.

      And no, this was no inocent mistake.

    • Re: (Score:3, Insightful)

      by 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 (Score:5, Interesting)

    by Anonymous Coward on Tuesday October 16, 2007 @09:26PM (#21005157)
    "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.

    • Mod parent up. (Score:2, Interesting)

      by Anonymous Coward
      This has basically been my experience in a number of places, and it in combination with the idiotic FCPA laws in the U.S. put any firm trying to do business completely above-board at a massive disadvantage.

      I'm not sure that I'd really even call it 'corruption' in the sense that we think of that word in the U.S. and Europe. It's different from that. There's no shame, no real criminality in it. It's how you show that you're serious, it's how you show respect for someone's position and authority. It's just how

    • Re: (Score:3, Informative)

      by 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 (Score:3, Interesting)

    by Arthur B. ( 806360 ) on Tuesday October 16, 2007 @09:38PM (#21005255)
    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 (Score:5, Interesting)

    by bucky0 ( 229117 ) on Tuesday October 16, 2007 @09:39PM (#21005271)
    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 (Score:4, Funny)

    by SpaceLifeForm ( 228190 ) on Tuesday October 16, 2007 @09:40PM (#21005277)
    Is there a patch in the works?
  • Oh, Pancho!
  • I guess they haven't seen things from the other end like this(as in being legally outgunned) in ages.

  • how could this happen ... (Score:3, Interesting)

    by Shadukar ( 102027 ) on Tuesday October 16, 2007 @09:59PM (#21005417)
    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... (Score:4, Insightful)

    by Merovign ( 557032 ) on Tuesday October 16, 2007 @10:01PM (#21005431)
    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 (Score:3, Funny)

    by davidsyes ( 765062 ) on Tuesday October 16, 2007 @10:22PM (#21005583) Homepage Journal
    Leads to an array of RAIDs...

  • How to do business in corrupt countries (Score:5, Interesting)

    by viking80 ( 697716 ) on Tuesday October 16, 2007 @10:51PM (#21005817) Journal
    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.

    • 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... (Score:5, Interesting)

    by duwde ( 665187 ) on Tuesday October 16, 2007 @11:33PM (#21006097)
    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 (Score:3, Insightful)

    by Bill, Shooter of Bul ( 629286 ) on Wednesday October 17, 2007 @12:27AM (#21006369) Journal
    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? (Score:5, Insightful)

      by Wooky_linuxer ( 685371 ) on Wednesday October 17, 2007 @07:18AM (#21008631)

      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.

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