Non-Subscriber Extract
South America’s regional centre for illegal activities
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| 26 September 2006 |
The tri-border area where Brazil, Argentina and Paraguay meet is unusual within the relatively homogenous region for being home to a variety of nationalities, with mass immigration since the 1960s having produced a community with people from places such as Lebanon, Syria, Gaza and the West Bank, Taiwan, South Korea and China, and to a lesser extent from Ukraine, Germany and other Eastern European countries. Some of these groups often retain strong ties to their country of origin, and this has encouraged the development of strong trading and financial links.
But lax border controls and differentiated tax, customs and police systems have facilitated illegal activities, as groups in each of the three countries exploit the differences between the various regimes. The result has been a highly dynamic economy: 20 per cent of Paraguay's commerce takes place in Ciudad del Este and as much as 30 per cent of its tax income comes from the city's customs, in large part fuelled by illegal trade such as the selling of counterfeit goods, drugs and arms smuggling.
US concerns mount
The US has long been concerned by the smuggling through the tri-border area, but the perceived possibility of terrorist financing led Washington to increase political pressure, largely via rhetorical means, to increase surveillance and control of the area. In 2002, Brazil, Argentina, Paraguay and the US formed the 3+1 Group, which monitors events in the tri-border area, including units for financial intelligence.
Some country-specific efforts have also been made. In August, Brazil announced the creation of a joint intelligence office that will work from Foz do Iguaçu's federal police headquarters. At present, only Argentina has a small intelligence office in the area, while Paraguay commands its small anti-terrorist unit from Asunción.
In operative terms, Paraguay - the smallest and poorest of the three countries - has been the most eager to comply with US requests, particularly in providing evidence for US investigations. Yet the main issue remains trust: the security forces of the three neighbouring countries appear unwilling to institutionalise operative links, while corruption remains a major hindrance to any sustained efforts to clamp down on illegal trade. In July, Paraguay was forced to change the entire personnel at its 700-strong police force in Alto Paraná, ostensibly owing to concerns over corruption.
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© 2006 Jane's Information Group
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