Small Wars Journal
Join Date: Sep 2005
Terrorism and the Tri-Border Area
3 August Washington Post - Paraguayan Smuggling Crossroads Scrutinized
by Monte Reel.
CIUDAD DEL ESTE, Paraguay -- For years, this region -- where the boundaries of Paraguay, Brazil and Argentina converge -- has been considered a teeming stew of globalization's more unseemly byproducts. Much of the trade that crosses the borders, officials say, is illegitimate. The region is full of smuggled goods and laundered money.
Now U.S. officials are launching a broad series of new measures aimed at uncovering money-laundering rings that they believe are funding Hezbollah and other radical groups.
"I am highly confident that's the case," said Daniel Glaser, deputy assistant treasury secretary for terrorist financing and financial crimes. "We believe there is evidence."
The U.S. government's efforts to uncover money laundering by groups linked to terrorism depends largely on the work of local officials. But a scene stumbled upon in the darkness last week hinted at some of the challenges that U.S. and local officials face.
On a bridge connecting Paraguay and Brazil, Paraguayan border officials were sitting at tables in the dark, using flashlights to check the passports of a tiny fraction of those who crossed, perhaps one in 20 drivers, according to an informal count.
At the same time, a short distance upstream, two small boats slipped across the water. The boats carried nearly 1,400 pounds of marijuana, bound tightly in bricks of packing tape and stuffed into cardboard boxes. The only reason Paraguayan federal agent Maria Adelaida Vasquez found out about the marijuana was that two officers from the federal prosecutors' office coincidentally were in the neighborhood where the boats landed.
"We're not in a position to wage a battle against this kind of enterprise," said Vasquez, who said money laundering and other illegal financial transactions are increasingly intertwined with the narcotics trade. "The criminals are on the vanguard of technology, and we don't even have access to the Internet in our offices. If we have cellphones, it's because we buy them with our own money."
The 20 Paraguayan prosecutors in the region have two trucks available to use. Vasquez just happened to have access to one the other day, and she was able to arrest eight people involved in the transit of the marijuana. Catching them was pure luck, she suggested.
U.S. Treasury officials have held workshops in the region to encourage more banking sector involvement in regional efforts against money laundering. The Department of Homeland Security's immigration office last week sent a team to Argentina to implement a "trade-transparency unit" -- a team that will collect and analyze trade data and search for irregularities that could suggest money laundering -- and will equip a similar unit in Paraguay in September.
Meanwhile, the State Department this year helped draft stricter anti-money-laundering legislation that was passed by Argentina's congress. The U.S. Embassy's legal adviser in Asuncion, Paraguay has held training courses during the past year for investigators and prosecutors in charge of combating possible terrorism links, according to the Justice Department.
Glaser said it is the links to Hezbollah and other radical groups that "concern us most."
U.S. officials cite a smuggling case in March in which 19 people were charged in Detroit for allegedly operating an international ring that illegally moved cigarettes through Paraguay and Brazil. The indictment alleged that profits were funneled to Hezbollah.
Additionally, in 2004 U.S. officials designated a businessman operating in Ciudad del Este a terrorist, saying he was a Hezbollah treasurer. The man, Assad Ahmad Barakat, operated a successful import-export business as a front for Hezbollah cells, the Treasury Department alleged...