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
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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
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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