PARAGUAY: UN PERMREP NERVOUS ABOUT CTC ACTIVITY

UNCLAS ASUNCION 001066 SIPDIS SENSITIVE NSC FOR SUE CRONIN TREASURY FOR OTA WARFIELD, VAN KOCH, MILLAR SOUTHCOM FOR DAN JOHNSON USUN FOR AMBASSADOR BOLTON FROM AMBASSADOR KEANE USUN FOR ERIC ROSAND, NICK ROSTOW E.O. 12958: N/A TAGS: PREL KCRM PTER PA UN SUBJECT: PARAGUAY: UN PERMREP NERVOUS ABOUT CTC ACTIVITY REF: ASUNCION 875 ¶1. (SBU) On August 19, I was approached at a reception in the Paraguayan Foreign Ministry, Amb. Eladio Loizaga, Paraguayan PermRep at the UN in New York. Loizaga, in town for a short stay, mentioned that he was concerned about possible developments related to the CTC and its engagement with Paraguay. He opined that Paraguay was receiving conflicting messages. On the one hand the US is demonstrating its interest in closer relations with Paraguay, such as the visit of Secretary Rumsfeld, while on the other the U.S. is pressing Paraguay on anti-terrorism legislation. He had heard that the CTC was again focusing on Paraguay in connection with compliance with UN resolutions. His concern was also related to the fact that President Duarte would be in New York in September and would be a Vice President of the UNGA, (implying that he did not want to see Duarte put in an awkward situation). He said he hoped to meet with US PermRep John Bolton during the coming week to explain Paraguay's situation. He claimed that he did not understand the reason for such focus since Paraguay has done as much as Brazil, Argentina and many other countries. ¶2. (SBU) Disregarding his attempt to link this issue to our warming bilateral relationship, I replied that, regardless of what Brazil and Argentina have done -- whose situations I had not studied -- Paraguay is tardy in fulfilling its international obligations. Moreover, the Paraguayan President, I noted, had committed to seeking enactment of anti-money laundering legislation (AML),languishing in Congress for 15 months already, as a precursor to presenting and getting enacted new anti-terrorism legislation. We have seen no movement nor serious Executive Branch efforts to engage with Congress on this legislation. I suggested that, with the Executive now enjoying the support of a coalition of parties in both houses of Congress, it would not be unreasonable to expect passage of the AML in at least one house by September, and presentation of the anti-terrorism law, so that there would be some chance of achieving enactment of both this year. ¶3. (SBU) Comment: Post appreciates the efforts of USUN to bring more CTC pressure to bear upon Paraguay for non-compliance with its UNSCR 1371 obligations. We will build on Loizaga's nervousness about his President coming up for criticism on this score to seek movement on the AML draft already before Congress and the introduction of the CT law by September. Continuing pressure from others in the international community, particularly the UN, is important as well and is less likely to lead to a natinalist backlash here. End Comment. KEANE