PARAGUAY: 2005 COUNTRY REPORT ON TERRORISM

UNCLAS SECTION 01 OF 02 ASUNCION 001513

SIPDIS

STATE FOR S/CT (NICHOLAS NOYES, RHONDA SHORE, EDWARD
SALAZAR)
STATE FOR WHA/BSC
SOUTHCOM FOR POLAD
NSC FOR CRONIN

E.O. 12958: N/A
TAGS: PTER ASEC PA
SUBJECT: PARAGUAY: 2005 COUNTRY REPORT ON TERRORISM


1. In paras 2 and 5 respectively, please find Post's
submissions on the Tri-border Area (Argentina, Paraguay and
Brazil) and Paraguay for the 2005 Country Report on
Terrorism.

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The Tri-border Area (Argentina, Paraguay and Brazil)
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2. The Triborder area (where Argentina, Paraguay, and Brazil
converge) has long been characterized as a regional hub for
Hizbollah and Hamas fundraising activities, arms and drugs
smuggling, document and currency fraud, money laundering and
the manufacture and movement of pirated goods. In the early
1990s, the three countries established a mechanism for
addressing jointly illicit activities. In 2002, at their
invitation, the United States joined them in a consultative
mechanism (forming the "3 Plus 1" Group on Triborder Area
Security) to strengthen the capabilities to fight
cross-border crime and thwart money laundering and terrorist
fundraising activities. Although there is no corroborated
information that Hizbollah and Hamas have an operational
presence in the area, the United States remains concerned
that these groups raise funds among the sizable Muslim
communities in the region, and that the high incidence of
illicit activity could tempt terrorist groups to establish
safe havens in the largely uncontrolled area. Persons
suspected of having ties to terrorist groups have been
spotted in the TBA, but no operational activities of
terrorism have been detected.


3. As agreed during the December 2004, high-level meeting of
the "3 1" Group, Paraguay hosted a meeting in October 2005 of
representatives from Financial Intelligence Units (FIUs) and
other experts from Argentina, Brazil, Paraguay, and the U.S.
to address the challenges posed by the trans-border movement
of bulk cash and the illicit use of charities. Delegations
from the four countries conveyed keen interest in the U.S.
program to create Trade and Transparency Units (TTU) in each
country with a view to uncovering discrepancies in customs
data that suggest potential illicit activity. They agreed to
strengthen border controls, establish customs databases,
share legislative standards, and appoint contact points on
bulk cash movements.


4. Brazil hosted the "3 1" Group meeting in December 2005
in Brasilia. Delegates reaffirmed their commitment to
fulfill obligations outlined in UNSCR 1373, including the
denial of safehaven to terrorist or terrorist financiers and
to prompt information exchange in order to deter illegal acts
in the region. Additionally, the four countries reiterated
the need to strengthen institutional ties among the public
prosecutors in the Tri-border Area by organizing a meeting
for public prosecutors in Brazil during the first half of

2006. Also, Brazil agreed to fully implement the Regional
Intelligence Center in Foz do Iguacu by mid-2006, and to
invite Argentina and Paraguay to send official
representatives to staff the center. The delegations also
agreed to continue implementing joint patrols of Itaipu Lake
and adjacent waterways, as well as to continue work on
integrated immigration and border controls. Argentina will
host the next 3 1 Group Plenary in Buenos Aires in December

2006.

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Paraguay
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5. In 2005, Paraguay was an active participant in the "3
1" mechanism formed to combat cross-border crime, money
laundering, and terrorist fundraising activities in the
Tri-Border Area (where Argentina, Paraguay, and Brazil
converge.) As agreed during the "3 1" high-level annual
meeting held in December 2004, Paraguay hosted a meeting of
representatives from Financial Intelligence Units (FIUs) and
other experts from Argentina, Brazil, Paraguay, and the U.S.
in October 2005. The meeting addressed the challenges posed
by the trans-border movement of bulk cash and the illicit use
of charities in the Tri-Border Area.


6. In 2005, Paraguayan authorities aggressively sought
formal charges against suspects connected with the September
2004 kidnapping and subsequent murder of Cecilia Cubas, the
daughter of former President Raul Cubas. Attorney General
Oscar Latorre announced in May 2005 that members of the
leftist Free Fatherland Party (Partido Patria Libre --PPL)
had communicated via email with a member of the Revolutionary
Armed Forces of Colombia (FARC) regarding the Cubas
kidnapping and murder, offering evidence of the FARC,s
involvement. In October 2005, a Paraguayan judge indicted 25
individuals in the case, including several with connections
to PPL. That same month, PPL faction leader Osmar Martinez
repeated earlier admissions that he has amicable relations
with the FARC.


7. There is no credible evidence of operational Islamic
terrorist cells in Paraguay. Nonetheless, the United States
remains concerned that groups such as Hizbollah and Hamas
raise funds among the Muslim communities in the region and
may be tempted to establish safe havens within the largely
uncontrolled border area near Ciudad del Este, Paraguay.


8. Although Paraguay has cooperated in counterterrorism and
law enforcement efforts, the country's judiciary remains
severely hampered by a lack of strong anti-money laundering
and counterterrorism legislation. Paraguay submitted new
legislation to strengthen its anti-money laundering regime to
Congress in 2004 with hopes of passage in 2005, however the
bill has stalled in Congress. Paraguay has not yet
introduced draft antiterrorism legislation to Congress. Both
of these initiatives are key to Paraguay meeting its
international counterterrorism obligations as set forth in UN
Security Council Resolutions. In late 2004, Paraguay took
steps to become a party to all 12 UN terrorism conventions
and two OAS terrorism conventions.


9. Without effective money laundering and counterterrorism
legislation, Paraguay is forced to prosecute suspected
terrorist financiers on tax evasion charges or illegal
financial activities. As such, Paraguayan authorities in
2005 filed tax evasion charges against Kessem Hijazi,
suspected of laundering funds in support of Lebanese
Hizbollah. Hijazi is currently waiting for a preliminary
trial hearing to be scheduled. Officials in February 2005
announced the investigation of 113 businesses and 46
individuals suspected of money laundering in connection with
the Hijazi case. Prosecutors have until February 2009 to
bring the case to trial. Also in 2005, officials filed
charges against suspected terrorist fundraiser Hatem Barakat
for tax evasion and passport and document forgery. No trial
date has been set. Hatem is the brother of known Hizbollah
fundraiser Assad Ahmad Barakat, who is serving six and one
half years in a Paraguayan prison on conviction for tax
evasion. Separately, Paraguayan authorities are seeking the
arrest of fugitive Hassan Ali Barakat (cousin of the Barakat
brothers) who is wanted for conspiracy, piracy, and contempt
of court. Paraguay's antiterrorism police the Secretariat
for the Prevention of International Terrorism (SEPRINTE)
provided support to these investigations.
JOHNSON