FIGHTING THE GOOD FIGHT

UNCLAS ASUNCION 000994 SIPDIS SIPDIS SENSITIVE PASS TO STATE WHA/FO CMCMULLEN, WHA/BSC MDRUCKER, KREAD, CCROFT, FOR INL/FO CMCCAMPBELL, INL/LP ASMITH, DHAWKINS, DGRAHAM, FOR S/CT DDAILEY, GNOVIS, ASIERRA, FOR F RGREENE, FOR DOJ/KCRM CALEXANDRE, KOCONNOR E.O. 12958: N/A TAGS: PREL ECON SNAR PGOV PA SUBJECT: FIGHTING THE GOOD FIGHT This cable contains an action request in Paragraph 8. -------------- SUMMARY -------------- ¶1. (U) Paraguay is the third most corrupt country in the hemisphere after Haiti and Venezuela, and it has an antiquated and weak legislative framework. Regional Legal Advisor (RLA) Kevin Sundwall arrived in Asuncion in March 2007 and began working with committed Paraguayan counterparts to bring about judicial reform. As a member of the Senate committee charged with drafting new laws, Sundwall has strengthened the capacity of Paraguayan authorities on terrorist financing, money-laundering, and intellectual property violations in the Tri-border Area (TBA); assisted in drafting Paraguay's new criminal and criminal procedure codes and in implementing Argentina's terrorist financing law; proposed a TBA Money-laundering and Intellectual Property (IP) Task Force; coordinated training of Financial Investigative Unit (FIU) analysts; facilitated communication between Tri-border and Southern Cone Law Enforcement officials and U.S. law enforcement; and has given high-profile presentations to regional conferences on money laundering and terrorism finance. While RLA Sundwall has made great strides over the past eight months, much work remains to be done, including lobbying for the final passage of Paraguay's new criminal code; shepherding Paraguay's criminal procedure code through Congress; drafting a new asset forfeiture law, counter-terrorist legislation, and a law to institutionalize Paraguay's Anti-Piracy Investigation Unit (UTE); training prosecutors/judges on anti-money laundering legislation; and continuing coordination of U.S. law enforcement training in the Tri-Border Area (TBA). ¶2. (U) SUMMARY CONTINUED: The estimated cost of RLA's second year at Post is USD 465,000; to date, Post has commitments for USD 195,000 (65,000 from S/CT and the TFWG; 65,000 from USAID/MCC to accomplish specific tasks under Paraguay's current Millennium Challenge Account Threshold Program; and perhaps an additional 65,000 from DOJ/OPDAT if INL grants permission for OPDAT to reprogram OPDAT pipeline funds). Post still needs USD 270,000 to bridge the funding gap. RLA Sundwall's impressive inroads into Paraguayan legal reform should not be abruptly abandoned after the USG has already born the more-expensive start-up costs associated with his first year at Post. At a time when the USG's top priority is the war on terror, it would be foolish to neglect the TBA, which is the single largest non-NEA funding source for Hezbollah, as well as the largest regional hub for trafficking in pirated goods, arms, drugs, and persons. This is a small, sound investment which will yield large returns. We urge Washington to support extension of this key RLA position. END SUMMARY. -------------- PARAGUAY'S LEGAL CHALLENGES -------------- ¶3. (U) Paraguay is the third most corrupt country in the hemisphere after Haiti and Venezuela. A 2007 Transparency Paraguay corruption survey further found that the Paraguayan public considers the Duarte administration the most corrupt since 1997. Paraguay's judicial system (including its public ministry) is routinely subject to corruption and political influence. Paraguay lags behind many of its neighbors in terms of its judicial reform and its efforts to adopt an accusatory criminal justice system. At this writing, Paraguay's penal code dates to 1999 (with the last major overhaul done in 1914),it does not have terrorist finance legislation, and its current money laundering legislation and asset forfeiture laws are weak. Those caveats aside, many Paraguayan government officials have demonstrated their commitment to eradicating corruption and strengthening Paraguay's legal framework, and have made significant progress toward those goals. -------------- RLA'S ACCOMPLISHMENTS IN HIS FIRST YEAR -------------- ¶4. (U) Regional Legal Advisor (RLA) Kevin Sundwall, from the Department of Justice's OPDAT program, arrived in Asuncion in March 2007 and began working with his Paraguayan counterparts to improve Paraguay's criminal legal framework. NADR funding allocated by State's S/CT and the Terrorist Finance Working Group (TFWG) provided the funding for RLA Sundwall's first year at Post, at a cost of approximately $580,000. Funding support will end in March 2008. ¶5. (U) Sundwall sits on the senate committee charged with drafting new laws, and has unprecedented access and influence over the law-making process. In just eight months, Sundwall has accomplished the following, building on the work of his predecessor: --Strengthened the capacity of investigators, prosecutors and judges on regional terrorist financing, money-laundering, and anti-piracy crimes in the Tri-border Area (TBA) via a two-week investigations course held in October 2007. Sundwall also trained police, prosecutors and judges on Trial Advocacy (Argentina, June 2007 - 2 courses); intellectual property (Argentina, August 2007); and Advanced Interviewing and Interrogation Techniques (Paraguay, October 2007). --Assisted in drafting Paraguay's new criminal code, which includes an improved money laundering statute, trafficking in persons legislation, and intellectual property protections. The bill, introduced in Congress in March, has been approved once by both chambers of Congress and is pending final congressional approval in the Senate. --Assisted in drafting a new criminal procedure code, which is ready to be presented to Congress. RLA is developing a curriculum for training investigators, prosecutors and judges on the new code, which will be key to helping Paraguay combat corruption. --Taught Trial Advocacy courses to assist with implementation of Argentina's terrorist financing law, which was passed in the summer of 2007, and also gave two presentations to high-profile anti-money laundering and counter-terrorism finance conferences in Argentina. --Proposed a vetted Tri-border Money-laundering and Intellectual Property (IP) Task Force comprised of prosecutors and investigators from Argentina, Brazil and Paraguay to coordinate investigations and prosecutions involving terrorist financing, money-laundering and intellectual property crimes. --Coordinated training of eight Financial Investigative Unit (FIU) analysts to produce investigative reports that financial crimes prosecutors can use to build cases against money launderers and terrorist financers. --Facilitated communication between Tri-border and Southern Cone Law Enforcement officials and U.S. law enforcement (FBI, DEA, ICE, intelligence community, military, and State Department). Organized an August TBA conference for USG officials from Paraguay, Argentina, Brazil, and Washington to improve U.S. coordination and information-sharing on TBA issues. -------------- RLA'S GOALS FOR THE COMING YEAR -------------- ¶6. (U) While RLA Sundwall has made great strides over the past eight months, much work remains to be done. In the coming year, the RLA's "to do list" includes the following: --Collaborate with Embassy's Front Office and pol/econ section to lobby for the immediate final passage of Paraguay's new criminal code. Senate President Saguier said the bill would be passed in March 2008 (via an up/down vote, since both chambers have already reviewed the bill and made revisions). --Shepherd Paraguay's criminal procedure code through Congress, which will be essential to ensure effective implementation of the new penal code. The new criminal procedure code will eliminate the current requirement that the public ministry inform the defendant and his attorney of the state's intent to investigate, as well as the defense attorney's ability to be involved in the entire investigative process. The revisions further provide for cross examination and confrontation of witnesses, and extend the current, short statutes of limitation, which frequently lead to the dismissal of cases. The revised code also eliminates interlocutory appeals of all procedural issues during the course of a case, which further delay justice and cause statutes of limitation to run. --Draft a new asset forfeiture law that will improve Paraguay's ability to fund its law enforcement, and particularly its counter-narcotics, efforts. Seized assets currently sit in warehouses for years while criminal procedures are pending. Paraguay's counter-narcotics agency, SENAD, sought U.S. assistance in drafting this law. --Train prosecutors/judges on anti-money laundering legislation once Congress approves it. From the date the new penal code, including money laundering provisions, is signed into law, there will be a one-year delay in implementation to allow for training. Working with RLA Moreno-Taxman and the LEGATTs from Argentina and Brazil, RLA Sundwall will develop a curriculum and train prosecutors, investigators and judges from the TBA on terrorist financing, money laundering, trial advocacy, intellectual property and cyber crimes. Such training is critical to Paraguay's future success in prosecuting money laundering cases. --Stand up and train a task force to combat terrorist financing, intellectual property violations, and money laundering in the TBA. RLA Sundwall will work closely with Embassy Brazil's RLA Karine Moreno-Taxman and the LEGATTs from the respective countries to select top quality investigators and prosecutors for this unit and to ensure that it receives proper training. --Draft a stand-alone counter-terrorist finance bill to be introduced to Congress in early 2008. The penal code currently pending final passage in Congress contained controversial terrorist finance provisions, which Congress struck from the almost-final version of the criminal code. Senate President Saguier told U.S. Senate Majority Leader Harry Reid November 26 that Paraguay would pass a terrorism law next term; actors throughout Paraguayan society recognize the need for terrorism legislation. Without such a law by May 2008, the Egmont Group will suspend Paraguay. --Draft a law to ensure the continued legal existence of Paraguay's Anti-Piracy Investigation Unit (UTE). This INL-supported unit is vital in the fight against intellectual property violations in Paraguay. The unit currently exists pursuant to presidential decree. In light of April 2008 national elections, it is imperative that the unit be formally incorporated into one of the government ministries. Otherwise, all of the financial support and training support Post has provided to the Unit over the past few years will have been for naught, as the unit could cease to exist under a new president. The Paraguayan government has demonstrated its commitment to intellectual property rights by including this issue in the intellectual property Memorandum of Understanding it is discussing with the USG at the December 4 Joint Council on Trade and Investment (JCTI),hosted by Paraguay. --Coordinate U.S. law enforcement training in the TBA and facilitate investigative cooperation between TBA countries and U.S. law enforcement. --Offer advice on Bolivia's criminal procedural code pursuant to a request from DEA Bolivia. -------------- AN ACCOUNTING -------------- ¶7. (U) The estimated cost of RLA's second year at Post is USD 465,000. To date, Post has secured funding from State's S/CT and the TFWG, which have promised USD 65,000 for the position. Additionally, DOJ/OPDAT intends to request permission from INL to reprogram USD 65,000 from pipeline funds already allocated to OPDAT. Additionally, Post will contribute USD 65,000 in USAID/MCC funding from Paraguay's current Millennium Challenge Account Threshold Program for RLA to conduct targeted training and provide technical assistance to anti-corruption prosecutors and personnel associated with Paraguay's planned criminal forensic lab. Given these funding sources, Post still needs USD 270,000 to bridge the funding gap and ensure the RLA position is funded next year. -------------- -------------- ACTION REQUEST: FUNDING NEEDED BEGINNING IN MARCH 2008 -------------- -------------- ¶8. (U) ACTION REQUEST FOR INL: Please allow OPDAT to reprogram USD 65,000 from OPDAT pipeline funds as well as any additional funding that OPDAT subsequently identifies as available for reprogramming to be used in Paraguay. ACTION REQUEST FOR INL, WHA, USAID, S/CT, DOJ, DOD, and any other interested USG element or agency: Please provide USD 270,000 in funding for Asuncion's RLA position to bridge the funding gap, as Post has exhausted all possible local funding sources. RLA Sundwall has made impressive inroads into Paraguayan legal reform. Those efforts should not be abruptly abandoned, after the USG has already born the more-expensive start-up cost to move RLA to Post. Legal reform in Latin America can be slow, but Paraguay offers the unique opportunity for the USG to have a real impact. Many Paraguayan interlocutors solicit and accept U.S. legal advice regarding Paraguay's legislative framework, and they are disposed to continue close collaboration with the USG in Asuncion. With national elections scheduled for April 2008, we will have a renewed opportunity to move legal reform forward. ¶9. (SBU) Extending the tenure of Embassy's RLA is a top mission priority. SOCOM Commander Admiral Olson and S/CT Coordinator Ambassador Dell Dailey, as well as the other Southern Cone ambassadors, have affirmed their support for this initiative. DOD elements have expressed interest in providing financial support, but say they are restricted from doing so. At a time when the USG's top priority is the war on terror, it would be foolish to neglect the TBA, which is the single largest non-NEA funding source for Hizbollah, as well as the largest regional hub for trafficking in pirated goods, arms, drugs, and persons. This is a small, sound investment which will yield large returns. We urge Washington to support extension of this key RLA position. CASON