PARAGUAY POLITICAL AND ECONOMIC UPDATE, JULY 16 -

S E C R E T SECTION 01 OF 02 ASUNCION 000936

SIPDIS

STATE FOR WHA/BSC AND 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: DECL: 07/22/2010
TAGS: PGOV PHUM PREL SNAR KCRM ETRD PA
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, JULY 16 -
22

REF: A. ASUNCION 786


B. ASUNCION 813

Classified By: Ambassador John F. Keane, For reasons 1.5 (b) and (d).


1. (U) SUMMARY
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--Liberal Party Dissident Elected Comptroller
--Customs Trys To Take Control of CD Imports
--Protests Against US Troops
--Hassan Barakat Has Fled to Beirut

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Liberal Party Dissident Elected Comptroller
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2. (U) Octavio Airaldi, member of the opposition Authentic
Radical Liberal Party (PLRA),was elected as Paraguay,s new
Comptroller General with 59 votes last week. Airaldi is one
of the six dissident PLRA Congressmen that broke ranks in a
June vote (ref A) to elect Colorado Party (ANR) Deputy Victor
Bogado the new President of the Chamber of Deputies. The
multiparty pact included members of the ruling ANR and the
socialist leaning Country in Solidarity Party (PPS). The
same pact secured the Senate Presidency for PPS Senator
Carlos Filizzola, also in June (ref B).


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Customs Trys To Take Control of CD Imports
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3. (U) The National Customs Director Margarita Diaz de Vivar
announced this week that all imported optical media (CDs and
DVDs) would now have to pass through customs in Asuncion
before being distributed throughout the country. The purpose
of the measure is to increase control and reduce
opportunities for corruption. The move was made in
cooperation with the Ministry of Industry and Commerce (MIC),
which inspects shipments to assure compliance with the
required pre-registration of imports with the Director of
Intellectual Property. Now both inspections will take place
together. Until now, there were five possible ports of entry
for optical media. A common tactic has been to claim CDs,
with their lower unit valuation, when in fact a shipment
contains more highly valued DVDs.


4. (C) COMMENT: This announcement comes after Diaz de Vivar
has been under fire by local press and media for allegations
of corruption within the Customs Directorate. She claimed to
EconOff that the media is seeking her removal; especially
newspaper Ultima Hora, whose owner, is a major importer of
optical media. END COMMENT.

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Protests Against US Troops
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5. (U) On July 20, more than 150 people protested the
presence of the United States troops in Paraguay. The
Permanent Popular Plenary group organized the protest. This
group considers the presence of US troops to be an invasion
of Paraguay's autonomy and claims the USG is after their
natural resources, such as the Guarani Aquafer. A separate
group, the Alto Parana Chapter of the Paraguayan Attorneys
Association indicated that the presence of US troops is a
violation of the principle of self-determination by the
Paraguayan people.

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Hassan Barakat Has Fled to Beirut
--------------


6. (S) Embassy contacts have confirmed that Lebanese
extremist Hassan Ali Barakat, the cousin of Assad Ahmad
Barakat, fled from the Tri-border region through Italy to
Beirut on July 16. Hassan Barakat is suspected of laundering
money in casinos in Brazil, Argentina and Uruguay.
Minimize considered.

KEANE