FINANCIAL INTELLIGENCE UNIT UPDATE

C O N F I D E N T I A L ASUNCION 000879

SIPDIS

SIPDIS

STATE FOR WHA/BSC (CCROFT, KREAD),S/CT (GNOVIS,
ASIERRA),INL (JSHOWELL, RHAWKINS)
TREASURY FOR CCORREA, FINCEN

E.O. 12958: DECL: 10/16/2027
TAGS: ECON EFIN ETRD PREL PTER PA
SUBJECT: FINANCIAL INTELLIGENCE UNIT UPDATE

REF: A. SECSTATE 113762

B. ASUNCION 714

C. ASUNCION 734

Classified By: DCM Michael J. Fitzpatrick; reasons 1.4 (b) and (d).


1. (SBU) The Director of the Secretariat to Combat Money
Laundering (SEPRELAD),Gabriel Gonzalez, asked Pol/Econ Chief

October 10 for Embassy support to lobby Minister of Finance
Cesar Barreto to pay Paraguay,s dues to the Financial Action
Task Force of South America (GAFISUD). Gonzalez indicated
that a payment of USD $71,000 is due on December 2007
(reftels) and Paraguay will be suspended from GAFISUD if it
does not pay. Gonzalez also asked the Embassy to urge
Minister of Commerce Ibarra to approve pending anti-money
laundering regulations for the insurance sector. Gonzalez
also expressed interest in doing a money laundering
vulnerability assessment for Paraguay under the auspices of
GASIFUD. (COMMENT: An assessment sponsored by GASIFUD is a
non-starter if Paraguay is suspended for not paying its dues;
Gonzalez said that the International Monetary Fund (IMF)
could also conduct the assessment. END COMMENT).


2. (SBU) Gonzalez also asked for Embassy support to move
forward a new counter-terrorism (CT) bill. Gonzalez wants to
begin working on a new terrorism finance bill and asked the
Embassy to lobby the American-Paraguayan Chamber of Commerce
(AMCHAM) to host an informational forum with private sector,
government, and civil society representatives. Gonzalez
indicated that he would like to hold the forum within the
next two weeks. (COMMENT: This seems premature. Considering
the objections to the CT text which was pulled from the draft
criminal code, a more appropriate first step is to allow
Congress to approve the criminal code before muddying the
waters with a new, but still controversial, CT bill. Once
the criminal code becomes law (perhaps by December),the
Paraguayans should work to finalize the text of a new,
separate CT bill which addresses civil society's concerns.
In addition, it would be prudent to educate the press about
the new CT bill with off-the-record briefings before any type
of public forum is held. END COMMENT).


3. (C) COMMENT: Gonzalez said he has tried to meet with
President Duarte and Finance Minister Barreto but has not
been able to get appointments. For a former President of
Paraguay's Central Bank with alleged "close" ties to
President Duarte, Gonzalez seems to be spinning his wheels -
lots of action, but with little traction. Gonzalez told
Embassy's RLA October 17 that he is trying to move several
projects forward but cannot make headway on any of them. Our
assessment is that Gonzalez is trying to do too much with too
little. We will try to assist him in prioritizing his goals,
starting with the GAFISUD payment. END COMMENT.

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