ARGENTINA: AMBASSADOR'S VISIT TO THE TRIBORDER AREA

S E C R E T BUENOS AIRES 001833 SIPDIS NOFORN SIPDIS E.O. 12958: DECL: 09/12/2027 TAGS: PTER EFIN KCRM PREL PGOV SNAR AR PA BR SUBJECT: ARGENTINA: AMBASSADOR'S VISIT TO THE TRIBORDER AREA Classified By: Ambassador E. Anthony Wayne for reasons 1.4(b) (c)and(d) ¶1. (S/NF) Summary: On September 11, top Argentine intelligence officials and analysts briefed Ambassador on their perspective of the terrorist threat in the Tri-Border Area (TBA). They noted that Hizballah maintains a real structure in the region, including experienced agents. They detailed advantages of the triborder region, noted that U.S. Treasury designations had led Hizballah to become more circumspect in its practices, and expressed their frustrations at the challenges of trying to counter terrorism concerns with in three separate national jurisdictions. ¶2. (C) Ambassador met September 6 in Puerto Iguazu with the Argentine Gendarmeria's and Federal Police's (PF) counterterrorism units and was briefed on their "targets of interest," linked to terrorism financing and other illicit activities, operating in the TBA. These mostly family-based business groups, with origins in and ties to Lebanon, are involved in the sale of contraband electronic goods, appliances, and clothing, but also deal in the trafficking of persons, drugs, and arms. The money is either flown out in bulk or sent through a network of legal and illegal currency exchange house. ¶3. (C) In Ciudad del Este, Paraguay, Ambassador together with Embassy Asuncion DCM Fitzpatrick, toured the bustling streets, witnessed the endless packaging of bundles on their way to Foz do Iguacu, and met with a Paraguayan federal economic prosecutor working to stem the illicit flow. Reported Septel, Ambassador and Embassy Asuncion DCM also visited the International Organization for Migration's regional anti-TIP program while in Ciudad del Este. End Summary. VIEW FROM THE BORDER -------------- ¶4. (C) Puerto Iguazu Federal Police and Gendarmeria counterterrorism units briefed Ambassador and EmbOffs September 6 on their activities in the TBA. Their information on the organization and activities of the "targets of interest" operating in the TBA, individuals and family-based business groups of largely Lebanese origin, is extensive. They noted the presence of individuals with experience working with the Hizballah in Lebanon. Due to its proximity to Brazil and Argentina, the business of Paraguay's Ciudad del Este has long been in contraband goods, mostly 
electronics and appliances from the U.S. and Far East and locally produced pirated goods (DVDs, CDs, clothing). Although these business groups are largely of Middle Eastern origin, a number are owned and operated by Taiwanese-origin groups. Most of the individuals are Brazilian and/or Paraguayan citizens who live in Foz do Iguacu, Brazil and run their businesses in Ciudad del Este, Paraguay. ¶5. (C) Several of their targets have been designated by U.S. Treasury for terrorism financing activities, and several are in jail or on trial in Paraguay for various infractions -- some for drug trafficking, but most for tax and customs violations. Ambassador noted the case of Al Capone in the United States, brought down by tax evasion charges rather than his violent crimes. The Police and Gendarmeria officials agreed that this was the most effective way to go after these groups operating in the TBA. ¶6. (C) The contraband activity, though largely comprised of regular commercial items evading customs and tax duties, also includes drug and arms trafficking, document fraud, and trafficking in persons. The profits are either flown out in bulk cash or wired out through legal and illegal networks of money exchange houses. In Ciudad del Este, the Ambassador and Asuncion DCM met with a Paraguayan federal financial crimes prosecutor. He related the difficult circumstances of his work (including pressures on his family),notably that his cases stall once they get to the courts, mostly due to corruption. He said a key to success was in changing the practices of under-valuing customs declarations, including massive electronics imports from the U.S. This practice, he argued, is essential to much of the contraband traffic. Nevertheless, he noted some successes in prosecution and responded when asked that he was optimistic that authorities will eventually get the upper hand on the contraband trade. He was extremely appreciative of continued strong USG support for vetted units such as his, which he saw as essential to success. VIEW FROM BUENOS AIRES -------------- ¶7. (S/NF) On September 11, Argentine intelligence service analysts briefed Ambassador and EmbOffs on their perceptions of the terrorist threat. Perhaps as a gesture on this important anniversary, the Secretary of Intelligence and his deputy who provides day-to-day leadership of the service participated. The Argentines emphasized that Hizballah maintains a real structure in the Paraguayan and Brazilian portions of the TBA, which includes individuals who have been active Hizballah operatives in Lebanon and thus pose a higher potential threat. They noted the TBA has many advantages: 1) relatively easy ways to make money; 2) easily available real "false" documents and easy immigration/residency/citizenship requirements; 3) very porous frontiers; and 4) the presence of many financial institutions and a large informal money flow. ¶8. (S/NF) The analysts noted that Hizballah has a second generation of leaders in the region and that they have made significant efforts to show themselves as good members of the community. They also noted that once the U.S. Treasury designated several individuals in late 2006, local Hizballah members became very nervous and took steps to regularize their commercial practices and to pay their taxes. They have generally become much more circumspect. ¶9. (S/NF) Comment: Argentines at the border and in the Capitol were at pains to stress their desire to work as closely as possible with us. The presence of the two top intelligence officials for the September 11 briefing signaled that. However, it is also clear that the Argentines feel great frustration in the limits they face in cooperation with Paraguay and Brazil, and Uruguay too. They know they have to work to make that cooperation better, but they clearly chafe at the current inefficiencies in going after the terrorist threat. WAYNE