AMBASSADOR CALLS ON NEW MINISTER OF INDUSTRY AND

UNCLAS SECTION 01 OF 02 ASUNCION 000745

SIPDIS

STATE FOR WHA/BSC, WHA/EPSC, EB/IFD/OMA
STATE PASS TO USTR FOR SCRONIN, LYANG
USAID FOR AA/LAC ADOLFO FRANCO
TREASURY FOR OSIA MAUREEN WAFER
COMMERCE ITA SARAH COOK
NSC FOR MIKE DEMPSEY
SOUTHCOM FOR POLAD
US SOUTHERN COMMAND MIAMI, FLORIDA

SENSITIVE

E.O. 12958: N/A
TAGS: ECON EFIN ETRD PREL PGOV PINR PA
SUBJECT: AMBASSADOR CALLS ON NEW MINISTER OF INDUSTRY AND
COMMERCE WHO REAFFIRMS COMMITMENT TO IPR PROTECTION

REF: A) Asuncion 726

B) Asuncion 675


1. (U) Sensitive But Unclassified please protect
accordingly.


2. (SBU) Summary: On May 31, Ambassador, Econcouns and
Resident Enforcement Advisor (REA) called on new Minister
of Industry and Commerce Raul Vera. Vera started off by
assuring the Ambassador that he intended to follow the same
policy directions as his predecessor (Ernst Bergen, now
Minister of Finance),especially with respect to the
protection of intellectual property rights. Discussions
included Veras appreciation for the transformation of the
Financial Intelligence Unit assisted by posts Resident
Enforcement Advisor, his support for the INL-funded
projects with the IPR enforcement unit and statistics
center, and DOD assistance to publicize an IPR tip-line.
Minister Vera came across as engaging and serious, and we
expect the excellent relations weve had with the MIC to
continue. Also discussed was a recent draft law imposing
new requirements on airlines which runs counter to GOP
policies favoring competition and the free market. End
Summary.


3. (U) On May 31, Ambassador, Econcouns and Resident
Enforcement Advisor (REA) called on new Minister of
Industry and Commerce Raul Vera. Minister Vera included
ed
the new Vice Minister of Industry, Raul Cano, the Director
of Intellectual Property, Astrid Weiler, and the two
members of the IPR enforcement unit (UTE) in the meeting.
As noted reftel, Minister Vera replaced former Minister
Bergen, who became the Minister of Finance after the
resignation of Dionisio Borda (reftels). Vera was the
President of the Central Bank from late 2001 to late 2002,
and spent the last few years doing consulting work in the
Dominican Republic for the United Nations.


4. (SBU) Vera started off by assuring the Ambassador that
he intended to follow the same policy directions as his
predecessor, especially with respect to the protection of
intellectual property rights. He noted that he had already
met with two members of the Supreme Court and had a meeting
scheduled for the following day with the Attorney General
to build relationships and underscore the importance of
close cooperation.


5. (SBU) The Ambassador described the excellent work of
the REA in building up the capacity of Paraguays Financial
Intelligence Unit (FIU). Vera had met with the FIUs
director and said he was amazed at the tremendous
difference between the dysfunctional FIU he knew as Central
Bank President several years ago, and the well-trained and
equipped unit that exists now. Vera said he fully supports
the draft money laundering law before Congress and had
discussed it with the President of the Supreme Court.


6. (SBU) The Ambassador and Minister Vera discussed the
two INL-funded projects to support the UTE and the
Ministrys statistical unit (CEPI). Vera strongly supports
both and thanked the USG for its cooperation and resources.
Ms. Weiler noted that the CEPI project is progressing and
that the Attorney General supports the project, which will
directly involve the Public Ministry in the collection of
data on the status of prosecutions of IPR violators. She
also expressed interest in pursuing IPR training that has
as
been discussed with Econcouns, and she relayed the Attorney
Generals interest in arranging the training as well. UTE
has up to 18 names for possible additions to the unit, but
noted that work on the units office space needs to be
completed before new personnel can come on board.
Engineering work is ongoing. Ambassador urged the MIC team
to screen candidates to fill UTE vacancies now so that they
could be vetted by a U.S. polygrapher scheduled to arrive
in July.


7. (SBU) The Ambassador briefed Minister Vera on DODs
MIST program of assistance with media campaigns. Post
had had discussions with the previous Vice Minister of
Industry about developing a marketing campaign for an IPR
tip-line that the MIC had planned to establish. Vera
expressed interest in continuing with the project.


8. (U) Vera expressed interest in having the next Joint
Council on Trade and Investment (JCTI) meeting as soon
as possible in order to preserve momentum. He noted his
his
concern about the enormous bilateral trade imbalance and
expressed hope for measures that could facilitate greater
Paraguayan exports.


9. (SBU) In a subsequent telcon, Ambassador expressed
concern to Vera about a draft law passed by the Senate two
days earlier which affects American Airlines and other
carriers (N.B. The draft law imposes a requirement that the
airlines pay travel agencies (6%) six percent or more of
the value of tickets.) Ambassador stressed that this draft
law is contrary to GOP stated objectives, as well as recent
steps such as open skies agreements and allowing major
increases in fuel prices, to foster free markets and
greater competition. Ambassador noted that American
Airlines had told him it was considering pulling out of the
Paraguayan market. Ambassador noted that he had also
raised this issue with the Presidents economic advisor
Carlos Walde and Finance Minister Bergen, noting that AA is
one of the GOPs larger taxpayers. Vera (as well as Walde
lde
and Bergen) agreed with the Ambassador that the draft bill
runs counter to GOP policy to strengthen free markets and
promote investments and they would attempt to prevent it
from becoming law.

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Comment
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10. (SBU) Minister Vera came across as engaging and serious,
and we expect the excellent relations weve had with the
MIC to continue. After the meeting, the new Vice Minister
of Industry told Econcouns that he looked forward to
maintaining the same close working relationship that
existed with his predecessor, Jorge von Horoch (now Vice
Minister of Economy at the Ministry of Finance).

KEANE