PARAGUAY: TERRORISM FINANCE COORDINATION OFFICER

UNCLAS ASUNCION 001266

SIPDIS

EB/ESC/TFS FOR JEAN CLARK
S/CT FOR TODD KUSHNER
INL/C/CP FOR STEVEN PETERSON
IO/PSC FOR BETSY FITZGERALD
TREASURY/OFAC FOR PAUL LURIE

E.O. 12958: N/A
TAGS: PTER KTFN KVPR EFIN ETTC PREL PA
SUBJECT: PARAGUAY: TERRORISM FINANCE COORDINATION OFFICER
(TFCO)

REF: STATE 175637

Per reftel request, Post provides the following information:

a) Post's TFCO is Kevin M. Johnson, Deputy Chief of Mission
(office tel. 595-21-213-715 (Ext. 2020); cell tel.
595-971-914-517;johnsonkm@state.gov).

b) Post's Deputy TFCO is James P. Merz, Political Counselor
(office tel. 595-21-213-715 (Ext. 2205); cell tel.
595-971-302-409);merzjp@state.gov).

c) Post would find it useful for closer coordination --
perhaps quarterly meetings or conference calls -- with our
TFCO counterparts in the region, particularly from Argentina
and Brazil. Amembassy Asuncion benefits from the
participation of Resident Treasury and Justice experts on its
country team. We would recommend their participation in
these meetings together with their counterparts as
appropriate from the other countries.

d) The general public, and more specifically, the
banking/business community, need to develop a better
appreciation for the importance of combating money laundering
and stronger reporting of financial transactions. They need
to develop an appreciation for clear, concrete regulations as
a protection against the flow of funds directly to terrorists
rather than an inconvenience that interferes with the conduct
of business. Holding seminars with key leaders in society
from the government, the legal community, the private sector,
NGOs, etc., educating participants on the relevance and
importance of combating terror financing in their own
communities would help create more political will to adopt
stronger laws and policies.

e) Post appreciates Department's appeal for ways Washington
can make our TF work more effective. We would request
consideration be given to the following:

-- Paraguay has proven reluctant to adopting anti-money
laundering (AML) legislation, a necessary precursor to its
adoption of CT legislation. The Embassy raises this message
frequently on a bilateral basis but it is vital that Paraguay
also receive the message from the IO community that it needs
to adopt these laws to meet its international obligations.
Post requests Department work through USUN to bring more CTC
pressure to bear upon Paraguay, including by having the CTC
Director pursue a trip to Paraguay for the purpose of
assessing its progress on adopting these laws.

-- Brazil, and to a lesser extent Argentina, continue to
object with increasing intensity to U.S. claims that
terrorist financing occurs in the Tri-Border Area (TBA)
absent the U.S. providing proof of such claims. As
appropriate, it would be helpful if we could share
information with the GOB and GOA that establishes the basis
for the serious concerns we have regarding this matter.

-- Developing a database that provides a snap shot of where
each country in the world is with regard to meeting its CT
obligations in the way of appropriate AML and CT legislation.
Amembassy Asuncion is understandably interested in the
status of legislation of countries from WHA.

-- Identifying strong legislation from WHA countries as a
potential model.

-- Identifying influential political leaders from WHA
countries -- in particular from the Southern Cone -- prepared
to raise concern about the lack of progress in adopting AML
and CT legislation with key GOP leaders.

-- Making AML and CT legislation a consideration for support
of IFI programs.
KEANE