PARAGUAY: FY-2007 CERTIFICATION REPORT

UNCLAS ASUNCION 000578 SIPDIS SIPDIS STATE FOR WHA/BSC TREASURY FOR OSIA MAUREEN WAFER TREASURY FOR OTA WARFIELD, VAN KOCH, MILLAR E.O. 12958: N/A TAGS: SNAR PGOV KCRM PA SUBJECT: PARAGUAY: FY-2007 CERTIFICATION REPORT REF: A. STATE 78495 ¶B. 2005 STATE 219200 ¶1. Below find Post's submission on host government cooperation on counternarcotics efforts based on the Benchmarks identified in reftel B. Counternarcotics -------------- ¶2. The United State Government (USG) asked the Government of Paraguay (GOP) to continue to keep pressure on major international drug organizations by arresting and prosecuting their key members and seizing their assets. -- In 2005, the National Anti-Drug Secretariat (SENAD) through its Major Violator Unit (MVU),assisted by DEA and INL, carried out successful operations to disrupt cocaine trafficking networks, increasing the amount of cocaine seized over the last year and assisting and coordinating with international law enforcement agencies in the war on drugs. --In July 2005, SENAD captured Brazilian national, Luis Alberto Da Cunha, alias Barba, who was on Brazil's ten Most Wanted List. In cooperation with the Brazilian national Police, SENAD seized weapons, cars, cellular telephones and false documents. Da Cunha was one of the largest drug traffickers in the country and is connected to Ivan Mendes Mesquita. -- Paraguay carried out joint counternarcotics operations with countries in the region and beyond including the U.S. and Europe during the course of the year. Paraguayan and Chilean law enforcement officials, with the assistance of Bolivian authorities, conducted joint operations to capture members of an international drug ring as part of a controlled delivery. Law enforcement officials in Santiago, Chile apprehended 13 suspects and seized two (2) tons of marijuana SENAD arrested 11 drug traffickers in Paraguay, seizing a total of 708 Kilograms (KG) of Marijuana. This operation began in Santiago in June 2005, when authorities learned of the truck hauling the drugs. The operation demonstrated excellent cooperation and strengthened intelligence sharing among Paraguay, Bolivia and Chile. -- In December 2005, SENAD seized 257 kilograms of cocaine, apprehended seven members of a drug trafficking organization -- six Ecuadorian nationals and one Colombian national -- and confiscated the equivalent of $34,000 in Euros, U.S. dollars and guaranes. This shipment of drugs had been destined for 
Spain. SENAD conducted this operation in close collaboration with DEA and Spanish police officials. -- In June 2005, drawing upon technical and financial assistance provided by U.S. Military Information Support Teams (MIST),SENAD began a public relations campaign appealing to the public for information related to drug traffickers operating in Paraguay. This program has consisted of radio spots airing on local stations as well as the posting of large billboards with the photos of the "Most Wanted" drug traffickers SENAD seeks to apprehend. The program has generated much publicity and helpful leads, putting traffickers on alert and on the defensive. ¶3. The USG asked the GOP to continue to provide adequate funding for its counter narcotics programs. -- While most Paraguayan ministries suffered substantial cut in their funding, the Paraguayan Congress has continued to fund Paraguay's counter-drug program at steady levels. Given the political and economic environment, this is a noteworthy achievement. --In May 2006, Minister Hugo C. Ibarra Director of SENAD met with President Nicanor Duarte Frutos, who pledged to support SENAD's request to hire 50 new officers. Demand Reduction -------------- ¶4. The USG asked the GOP to expand their Demand Reduction Program to outside the Central Department. -- As the GOP currently lacks the resources to expand the program to areas outside the Central Department, USG funding for this program remains critical. The last report shows that from September 2004 to September 2005 the drug awareness program reached a total of 44,710 students and formal training was provided to 1,068 schoolteachers. A total of 219 public educational institutions were approached under this program. It's Office of Demand Reduction does a significant amount of outreach work, primarily in schools. SENAD has the principal coordinating role under the "National Program Against Drug Abuse" and works with the Ministries of Health and Education and several NGOs. Asset Seizure -------------- ¶5. The USG requested GOP expand on its seizure of assets from the prior year. -- In 2005, SENAD seized 43 weapons, 46 vehicles, and five planes. It received $37,000 based on the sale of a seized twin engine aircraft exceeding the $14,500 it received in 2004 based on the sale of seized assets. Control of Precursor / Essential chemicals -------------- ¶6. The USG asked the GOP to step up efforts to track exports of pseudo ephedrine to North America, Central America and South America. -- Paraguay regulates the import of ephedrine but lacks any legal authority to punish violators significantly. Often offenders are charged with related crimes such as tax evasion in order to press charges that carry significant penalties. There is no pending legislation regarding pseudo ephedrine. Paraguay needs to take steps to improve implementation of existing laws. -- The USG sponsored the Major Violators Unit (MVU),DEA's host nation counterpart in Paraguay, to conduct routine investigations into the import of pseudo ephedrine into Paraguay and the export of pseudo ephedrine from Paraguay. -- In March of 2006, the MVU seized 500 kilograms of ephedrine, labeled as soy protein at the Silvio Pettirossi International airport and arrested Alicia Carolina Fernandez Vazquez, a Paraguayan citizen, attempting to take possession of the ephedrine which was addressed to a Paraguayan shell company called L.D.M. exports. Fernandez Vazquez had a Paraguayan passport with U.S. visa number 20011098290002. The USG sponsored investigation revealed the source of the ephedrine to be Krebs International, out of Punjagunta, India. The investigation also revealed that the ephedrine was to be shipped by container to Toronto, Canada to the defendant's husband, Olari Mehrdad, a Canadian citizen born in Tehran, Iran. Additionally, a check of customs records for L.D.M. exports revealed that more than 10 tons of a substance labeled as soy protein had been exported to Canada in November 2005 from Paraguay. Fernandez Vazquez remains in jail pending charges. Official Corruption -------------- ¶7. We have asked the GOP to take corrective measures to address concerns about corruption including prosecuting key cases. -- In April 2006, the U.S. polygraphed thirty-five investigators and prosecutors from Customs and the Tax Office investigative units and the Attorney General's office. Only three of the thirty-five tested as being deceptive on questions relating to taking bribes for handling cases. -- On April 20, 2006, former federal prosecutor and vice Minister of the Interior Carlos Calcena was convicted for theft of funds (approx. $350,000.00),an undetermined amount of Brazilian Reals and five kilograms of gold seized from Brazilian drug trafficker Jamie Amato in 2000. -- On a negative note, Aristides Cabral, a corrupt police official with ties to drug traffickers, was named the Chief of Police of the city of Villa Hayes the capital of the Department of Presidente Hayes, located in Northwestern Paraguay which forms part of a corridor for illegal flights and ground transport of drugs crossing Paraguay. The Senate voted down the GOP bid to promote Cabral. -- In 2005, Paraguay's Attorney General created a Corruption United manned by two prosecutors who have opened a number of high profile corruption cases. -- In November 2005, the USG sponsored a four week course to train investigators and other officials from the law enforcement community including prosecutors and judges in the investigation of complex economic crimes. In the course of the training class, Paraguayan officials arrested a Customs representative involved in attempting to bribe an IPR investigator. -- The GOP supports the creation of a Trade Transparency Unit (TTU) to monitor trade transactions for import and export irregularities. This unit is expected to be fully operational by the end of 2006. -- In 2005, information sharing among agencies has improved significantly. According to the head of Unidad Tecnica Especializada (UTE) information sharing among GOP agencies has played a key role in the interdiction of many important cases. Cooperation is now occurring more on an inter-institutional scale as opposed to an individual basis. -- In the course of 2005, Paraguay created investigative units in the Finance Ministry, Customs, and the Tax Office. Money Laundering -------------- ¶8. The USG requested the GOP to enact a working money laundering (ML) law and create an ML investigation infrastructure. -- While Paraguay's Congress has not yet enacted the AML law, Minister of Industry and Commerce Raul Vera has teamed with the President of the Advertisers Chamber Carlos Jorge Biedermann to head up efforts to gain its adoption. -- GOP approved a series of rules and regulations for the banking industry to cooperate with the Anti-Money Laundering Secretariat (SEPRELAD) on reporting suspicious activity. SIPDIS -- After long resistance got the GOP has adopted and implemented the Task Force concept; SEPRELAD has shared information with Attorney General's office on over 80 cases. -- The Attorney General's Office continued to prepare a key money laundering case, being processed as tax evasion, against a major target, several currency exchange houses, and upwards of 40 other individuals. ¶9. The USG asked the GOP to enact a working counter terrorism (CT) law and create an investigation infrastructure. -- While the law has not been introduced to Congress, a key Congressman has assumed ownership of this bill and is working with us on a plan for gaining its adoption. ¶10. The USG requested the GOP to enact a working criminal procedure code that would enable real investigation and prosecution of ML, CT and other complex economic and organized crimes. -- The GOP formed a legislative sub-commission and has been working on reforms to the procedure code for the last year and half. We have gained the support of key members on the Commission to adopt new reform measures but it remains to be seen if they will be able to overcome stiff resistance. ¶11. The USG asked the GOP to create and empower a true long-term training center for prosecutors and other officials working in the Attorney Generals Office. -- The GOP has rented a new site and selected key staff for a new training center that is slowly starting to function. CASON