UNCLAS SECTION 01 OF 02 ASUNCION 001296

SIPDIS

STATE FOR EB/IFD/OIA
STATE PASS TO USAID FOR LAC/AA
STATE PASS TO USTR FOR LYANG
NSC FOR SUE CRONIN
TREASURY FOR OSIA MAUREEN WAFER
TREASURY FOR OTA WARFIELD, VAN KOCH, MILLAR
COMMERCE FOR ITA SARAH COOK
SOUTHCOM FOR POLAD DAN JOHNSON

E.O. 12958: N/A
TAGS: PGOV PREL ECON PA SNAR
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, OCT. 09 -
OCT. 16

1.(U) Summary
-- President Appoints New Presidential Security Advisor
-- SENAD Capture Peruvian Cocaine Trafficker in Asuncion
-- Foot and Mouth Outbreak in Brazil Triggers Response
-- World Bank and Paraguay Cooperating for Financial
Transparency

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President Appoints New Presidential Security Advisor
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2. (U) On 10/10, President Duarte announced and signed a
decree appointing former Attorney General Oscar German
Latorre as the new presidential security advisor. Latorre
will have the rank and privileges of a cabinet minister. This
newly created executive office will advise the President on
national security matters. Latorre's new responsibilities
will include evaluation and proposal of policies and
legislative reforms to combat crimes such as drug
trafficking, money laundering, and kidnapping, among other
crimes. Reports indicate that Latorre's first domestic
proposal will be a gun control bill. It is not clear at this
time what the budget of this office will be and how this
office will be staffed but, Latorre is expected to request
security agents from other agencies to be assigned to his
office. As more information becomes available Post will
report further on this issue in septel. NOTE: Recently,
Latorre was rumored to be President Duarte,s designee to
head on intellengence affairs by virtue of a decree. The
ensuing controversy and the creation of intelligence office
prompted Duarte to suspend it creation by decree and explore
instead enabling legislation. To our knowledge such
legislation has yet been submitted to Congress. END NOTE.

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SENAD Capture Peruvian Cocaine Trafficker in Asuncion
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3.(U) On 10/11, SENAD agents arrested 5 Peruvian citizens for
drug trafficking. Three were captured at a SENAD station
located in the Chaco region and 2 at the central bus terminal
in Asuncion. According to reports, the five men swallowed
approximatly 224 capsules filled with cocaine. Apparently the
Peruvians swallowed the capsules in Peru. Their final
destination was Asuncion were they expected their payment.
SENAD agents have indicated that they are expecting to make
more arrests in the case.

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Foot and Mouth Outbreak in Brazil Triggers Response
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4.(U) On 10/10, Paraguay,s animal health services, SENACSA,
released a "Sanitary Alert Plan" to control the spread of
Foot and Mouth disease (FMD), which was recently discovered
on a cattle ranch in the neighboring southern Brazilian
province of Matto Grosso do Sul, approximately 45 kilometers
from the border with Paraguay. SEENACSA is presently
enforcing a 30 kilometer alert zone along Paraguay,s border
with Brazil, from the district of Pedro Juan Caballero in the
Department of Amambay to Cuidad del Este in the Department of
Alto Parana. According to SENACSA,s alert plan, authorities
are controlling the entry of all species susceptible to FMD,
and are requiring mandatory disinfection of all vehicles
entering the alert zone from Brazil. They are also issuing
veterinary teams to increase monitoring of cattle ranches in
the area.

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World Bank & Paraguay Cooperating for Financial Transparency
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5.(U) On 10/12, the World Bank in coordination with the
Paraguayan Ministry of Finance, announced a joint effort in
creating programs of accounting and audits with the objective
to develop a plan of action to improve norms and codes to
bring Paraguay information compliance with international
standards. According to reports, Orlando Ferreira a World
Bank official explained that the program looks at improving
the transparency in matters of financial information.
Ferreira also expressed that this program was already
established in 10 countries in the region; and pointed out
that the program has had good results in matters of
competitiveness, access to credit, reduction in fraud and
fundamentally improve financial information for the
consumers.
KEANE