Overview: The Government of Paraguay continued to be a receptive partner on counterterrorism cooperation with the United States. Paraguay’s challenges stem from ineffective immigration, customs, and law enforcement controls along its porous borders, particularly the Tri-Border Area (TBA) with Argentina and Brazil, and its dry border with Brazil from the TBA to Pedro Juan Caballero.

Since 2008, persons claiming to be part of the Paraguayan People’s Army (EPP) – a domestic criminal group initially dedicated to a socialist revolution in Paraguay – have been involved in violence meant to extort and intimidate the population and local governments in the northern departments of Concepción, San Pedro, and Amambay. Paraguayan authorities officially consider EPP and its offshoot Marsical Lopez’s Army (EML) organized criminal groups rather than terrorist organizations, but in public discourse, Paraguayan leaders occasionally refer to EPP and EML as terrorist organizations. At the end of 2018, authorities believed both EPP and EML held one hostage each, Edelio Morínigo and Félix Urbieta, respectively. Morínigo, the longest-held victim, was captured in 2014. EPP released Mennonite farmers Franz Hiebert and Bernhard Blatz on February 5, 2018, after less than one year in captivity.

2018 Terrorist Incidents: Alleged elements of the EPP continued to conduct kidnappings, killings, and sabotage operations:

• On November 19, alleged EPP members killed one person, and they assaulted and detained seven others for a few hours in northeastern San Pedro. Pamphlets were found at the site stipulating rules, prohibitions, and threats to local farmers. One pamphlet threatened farmers with execution for using “agrochemicals.”
• On November 24, the same EPP group reportedly involved in the November 19 attack unsuccessfully attempted to burn down a storage facility housing soybean processing machinery. Then, they machine-gunned the main building and water tank, leaving behind similar pamphlets with new threats. The attack took place eight miles away from the previous attack, also in San Pedro.
• On December 7, at least 15 alleged EPP members attacked a farm in Naranjito, San Pedro, burning a tractor, a truck, and three planes used for fumigation. According to media reports, the group briefly detained one person during the attack.

Legislation, Law Enforcement, and Border Security: The Paraguayan government continued to make use of a 2013 counterterrorism law that allows for the domestic deployment of the Paraguayan military to counter internal or external threats.

The Paraguayan Internal Operational Defense Command (FTC), the joint task force charged with countering EPP, consists of an estimated 1,000 military and 200 police personnel. The Paraguayan National Police (PNP) Secretariat for the Prevention and Investigation of Terrorism officially handles counterterrorism functions, although other PNP units and agencies such as the National Anti-Drug Secretariat work such cases as well, particularly when related to drug trafficking.

On November 26, Paraguayan President Mario Abdo Benítez inaugurated the new headquarters of the National Intelligence System (SINAI), composed of a National Intelligence Council (CNI) and a National Intelligence Secretariat, which report directly to the President. The purpose of the SINAI is to “detect, neutralize, and counterbalance the actions of domestic and international terrorist groups, and of transnational criminal organizations.”

Military forces and police officials continued to operate jointly against EPP in the departments of San Pedro, Concepción, and Amambay, with limited success. On November 22, the Abdo Benítez administration introduced draft legislation that would increase prison sentences for terrorist acts to up to 30 years. It also would broaden the definition of “terrorist organization” to include individuals or entities that provide economic and logistical support to terrorist organizations, and broaden the definition of “terrorist” to include individuals who recruit, indoctrinate, or advocate terrorism.

On August 30, the Paraguayan government offered a US $170,000 reward for information on the whereabouts of five EPP leaders: Osvaldo Villalba, Manuel Cristaldo Mieres, Alejandro Ramos, Magna Meza, and Liliana Villalba. The Paraguayan government had 29 active arrest warrants for individual EPP members.

The TBA has been an attractive region to individuals engaged in terrorist financing, as the minimal, and often corrupt, police, military, customs, and migration agency presence along these borders allows for a largely unregulated flow of people, goods, and money. Paraguay’s efforts to provide more effective law enforcement and border security suffered from a lack of interagency cooperation and information sharing, as well as pervasive corruption within security, border control, and judicial institutions.

Following the 2017 establishment of Paraguay’s Seized and Forfeited Asset Management Secretariat (SENABICO), more than US $100 million in seized goods is now under SENABICO administration. SENABICO administers confiscated property and assets associated with criminal activity, including terrorism financing.

In September, Paraguayan judges, prosecutors, analysts, and investigators participated in a regional counterterrorism workshop – funded by the Department of State and organized by the Department of Justice – and shared knowledge with counterparts from Argentina and Brazil. The workshop focused on preventing terrorism and transnational crime in the TBA, with an emphasis on Hizballah.

Countering the Financing of Terrorism: Paraguay is a member of the Financial Action Task Force of Latin America (GAFILAT), a FATF-style regional body. Paraguay’s FIU, Financial Intelligence Unit-Paraguay, is a member of the Egmont Group. Paraguay continued its preparations for a GAFILAT mutual evaluation, scheduled for September 2019. Paraguay has counterterrorist financing legislation and the ability to freeze and confiscate terrorist assets immediately. Paraguay has an adequate legal framework for its AML/CFT regime but continues to work on improving implementation. As of early December, the Paraguayan Senate was debating more than a dozen legal changes that would tighten enforcement of its counterterrorist financing regime.

Paraguay’s Central Bank increased actions against illegal exchange houses in the TBA, ordering the closure of more than 50 unauthorized exchange houses in September. The operation to close the exchange houses was conducted in response to Central Bank investigations and carried out in cooperation with the National Police.

For additional information on money laundering and financial crimes, see the International Narcotics Control Strategy Report (INCSR), Volume II, Money Laundering and Financial Crimes.

Countering Violent Extremism: Paraguay had no CVE program in 2018.

International and Regional Cooperation: Paraguay participated in the Organization of American States/Inter-American Committee against Terrorism. It continued to collaborate with Argentina and Brazil on border security initiatives, regional exchanges, and law enforcement projects. Argentina, Brazil, and Paraguay coordinated law enforcement efforts in the TBA by means of their Trilateral TBA Command.