PARAGUAY,S ANTI-TERRORISM FINANCE LEGISLATION

C O N F I D E N T I A L ASUNCION 000368 SIPDIS STATE FOR WHA/BSC DASCHBACH E.O. 12958: DECL: 07/26/2027 TAGS: EFIN PTER EIND ECON EINV ETRD PREL PA SUBJECT: PARAGUAY,S ANTI-TERRORISM FINANCE LEGISLATION EFFORTS Classified By: Charge d'Affaires, a.i. Michael J. Fitzpatrick; reasons 1.4 (b) and (d). ¶1. (SBU) Director of Paraguay's Secretariat to Combat Money Laundering (SEPRELAD) Oscar Boidanich is leading the effort to strengthen existing anti-money laundering legislation (Law 1015). Boidanich is seeking modifications of Law 1015 to a) Make suspected incidents of terrorism financing a reporting requirement for all institutions, organizations, and individuals that are required to submit Suspicious Activity Report Systems (SARS) to SEPRELAD; b) Expand SEPRELAD's oversight capacity to include exchange houses, pawn shops, casinos, credit unions, and service providers that move money and are paid in large sums of cash (lawyers, notaries, etc); and, c) Raise SEPRELAD's profile by making it a secretariat that directly reports to the President and assigning the rank of Minister to Director Boidanich. (NOTE: These proposed administrative modifications are a concrete first step to authorize SEPRELAD to investigative terrorism finance cases. The modifications, however, do not include criminal provisions for terrorism financing. SEPRELAD is drafting an anti-terrorism finance bill to address these concerns with technical assistance from Brazil. END NOTE.) ¶2. (C) SEPRELAD currently operates under the organizational structure of the Ministry of Industry and Commerce. Decisions to submit a SEPRELAD investigation to the office of the Attorney General are made by an inter-agency board comprised of the ministries of Interior, Industry and Commerce, and Finance, the counter-narcotics secretariat (SENAD),and the Central Bank. Boidanich told Econoff May 27 that the administrative law would eliminate the need for the inter-agency board, reduce the risks of compromising investigations, increase the possibility for additional budget support, and allow SEPRELAD to directly pass its financial intelligence reports to prosecutors. END NOTE ¶3. (C) The lower house of congress approved SEPRELAD's bill April 7. The bill is now pending Senate approval. Director Boidanich told Econoff June 9 he is actively engaging the Senate Legislative Committee to approve the bill without changes, trying to avoid a pass-back between the lower and upper houses of congress. (NOTE: Any changes from the Senate would send the bill back to the lower house for approval. END NOTE.) ¶4. (C) COMMENT: Paraguay's efforts to strengthen its capacity to combat terrorism finance show a genuine attempt to adhere to its international obligations. If the momentum is kept, it is likely that Boidanich will succeed in getting the modifications to Law 1015, and in the process set the stage for a more comprehensive anti-terrorism finance bill. END COMMENT. Please visit us at http://www.state.sgov.gov/p/wha/asuncion AYALDE