_________________________________________________________
US State Dept Narcotics Report 2012 (introduction):
Paraguay faces significant challenges to successfully fighting narcotics
trafficking and production: its location and the institutional challenges
facing its law enforcement agencies and courts continue to impede
counternarcotics efforts.
Paraguay produces one of the largest marijuana crops in the
hemisphere, largely for export to Brazil and Argentina. It is also a transit
country for Andean cocaine, most of which is destined for Paraguay’s
neighbors or to Europe, Africa, and the Middle East. Significantly smaller
quantities are transported to the United States. Although domestic
demand for illegal drugs remains low, as elsewhere in the region,
consumption of crack is on the rise.
This landlocked nation’s porous borders, extensive internal waterways,
and weak law enforcement institutions are easily exploited by drug
traffickers. Arms trafficking, money laundering, counterfeiting, and other
illegal activities linked to drug trafficking are also prevalent. Moreover,
these activities increasingly involve international criminal organizations,
such as the Brazilian-based Primeiro Comando da Capital (PCC),
operating in towns along the Paraguay-Brazil border. All in all, it is a
challenge for the National Anti-Drug Secretariat (SENAD), Paraguay’s
primary counternarcotics agency, which has just over 360 members.
Despite these challenges, in 2011 the Government of Paraguay
continued to disrupt the activities of drug traffickers through interdiction,
eradication, and demand reduction efforts led by SENAD and aided by
the Paraguayan National Police (PNP) and the Customs Administration.
Those agencies, along with the Attorney General’s Office, the Anti-
Money Laundering Secretariat, and the Supreme Court all welcome
cooperation with the United States in combating narcotics trafficking.
Paraguay is a party to the 1988 UN Drug Convention.
For Full report, click here
_________________________________________________________
US State Dept Trafficking in Persons Report 2011 (introduction):
(Tier 2)
Paraguay is a source country for women and children subjected to sex
trafficking, as well as a source country for men, women, and children
subjected to forced labor. Many Paraguayan trafficking victims are found
in Argentina, Chile, Bolivia, and Spain; smaller numbers of victims are
exploited in Brazil. In one case last year, 32 Paraguayan women were
identified in forced prostitution in the Spanish province of Cuenca and, in
two other cases, over 50 Paraguayan women were rescued from forced
prostitution in brothels in Argentina. Domestic servitude and sex
trafficking of adults and children within the country remain a serious
problem. Indigenous persons are particularly at risk of being subjected
to forced labor or forced prostitution, and during the reporting period the
local media highlighted cases of indigenous girls in prostitution at the
behest of family members. Poor children from rural areas are subjected
to forced commercial sexual exploitation and domestic servitude in urban
centers such as Asuncion, Ciudad del Este, and Encarnacion, and a
significant number of street children are trafficking victims. To a lesser
extent foreign trafficking victims from Bolivia and Peru have been
identified in situations of forced labor within Paraguay. Many
undocumented migrants, some of whom could be trafficked, travel
through the Tri-Border Area of Paraguay, Argentina, and Brazil.
The Government of Paraguay does not fully comply with the minimum
standards for the elimination of trafficking; however, it is making
significant efforts to do so. The government sustained modest anti-
trafficking law enforcement efforts and significantly increased funding for
victim services and awareness efforts during the year. However, the
government did not convict any trafficking offenders during the reporting
period. The current legal framework failed to adequately prohibit internal
cases of forced labor or forced prostitution and authorities had no formal
system to proactively identify trafficking victims.
For full report click here
_________________________________________________________
US State Dept Terrorism Report 2010
Overview: Increased activity by an internal insurgent group and the
resulting public demands for action brought terrorism to the policy
forefront. President Fernando Lugo responded to threats by mobilizing
the military in April and passing terrorism legislation in June. Though
Paraguay enhanced its counterterrorism efforts, it remained hampered
by ineffective immigration, customs, and law enforcement controls along
its porous borders, particularly the Tri-Border Area (TBA) with Argentina
and Brazil. The June arrest of alleged Hizballah financier Moussa Ali
Hamdan in Ciudad del Este, Paraguay, demonstrated the area's
permissive environment for terrorist financing activity. Limited resources,
sporadic interagency cooperation, and corruption within customs, the
police, the public ministry, and the judicial sector, impeded the
government’s law enforcement initiatives throughout the country.
Since 2008, the leftist Paraguayan People's Army (EPP) has been active
in the northern departments of Paraguay, abutting the Brazilian border.
Membership statistics for the EPP are difficult to establish, but it is
believed to be a small, decentralized group operating mainly in
Concepcion Department. The Paraguayan government classified the
EPP as an internal terrorist organization based on several kidnappings
and multiple shootouts with the police and military. The EPP claimed
responsibility for a 2009 explosion and a December 2010 bomb threat,
both at the Palace of Justice, though neither claim was verified.
Legislation and Law Enforcement: On June 23, President Fernando
Lugo signed a new terrorism bill into law that defines and criminalizes
terrorist activities and aids governmental counterterrorism efforts,
particularly in relation to terrorism financing, when paired with
Paraguay's 2009 anti-money laundering law. The law established
sentencing guidelines from five to 30 years for terrorism-based crimes.
In May, five U.S. Border Patrol and Customs and Border Protection
(CBP) Officers conducted an assessment of Paraguay's porous eastern
border with Brazil and Argentina. Based on its assessment, the CBP and
Border Patrol conducted a three-week training session in September to
assist Paraguayan Customs Officials and Police in better confronting
smuggling and related crimes in areas known as sources of terrorist
financing.
Countering Terrorist Finance: The new counterterrorism law includes a
terrorist financing provision stipulating prison sentences of five to 15
years for financial assistance, interaction, or connection with terrorist
organizations and/or individuals. Paired with 2009's anti-money
laundering law, the new legislation provides Paraguay's Secretariat for
the Prevention of Money Laundering (SEPRELAD) better tracking,
reporting, and enforcement powers.
Paraguay is a member of the Financial Action Task Force (FATF) against
Money Laundering in South America (GAFISUD). Paraguay assumed
GAFISUD's rotating Presidency in December 2010. As a member of the
Egmont Group, SEPRELAD exchanges information with other members
of the Egmont Group, including the United States.
Paraguayan law does not provide for freezing or seizure of many
criminally derived assets. Authorities can only freeze assets of persons
under investigation for a crime in which the state risks loss of revenue
from furtherance of a criminal act, such as tax evasion. In December,
SEPRELAD's Minister submitted a draft bill to the Presidency that
requests SEPRELAD be given administrative power to freeze suspected
money laundering and terrorism-related assets.
Regional and International Cooperation: In March, Paraguay signed an
agreement with Colombia to fight terrorism and organized crime.
Paraguay's strongest regional partner in counterterrorism and law
enforcement activities was Brazil. In October, Brazilian and Paraguayan
ministers met in Asuncion and announced a plan to coordinate activities
along the border to counter arms and narcotics trafficking, though no
agreement has been signed.
Paraguay signed the Beijing Convention on the Suppression of Unlawful
Acts Relating to International Civil Aviation and the Beijing Protocol to the
Convention for the Suppression of Unlawful Seizure of Aircraft at the
conclusion of an International Civil Aviation Organization diplomatic
conference in September.
_________________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
FIU - Secretaria de Prevención de Lavado de Dinero o Bienes
(SEPRELAD)
US State Dept Narcotics Report 2012 (introduction):
Paraguay faces significant challenges to successfully fighting narcotics
trafficking and production: its location and the institutional challenges
facing its law enforcement agencies and courts continue to impede
counternarcotics efforts.
Paraguay produces one of the largest marijuana crops in the
hemisphere, largely for export to Brazil and Argentina. It is also a transit
country for Andean cocaine, most of which is destined for Paraguay’s
neighbors or to Europe, Africa, and the Middle East. Significantly smaller
quantities are transported to the United States. Although domestic
demand for illegal drugs remains low, as elsewhere in the region,
consumption of crack is on the rise.
This landlocked nation’s porous borders, extensive internal waterways,
and weak law enforcement institutions are easily exploited by drug
traffickers. Arms trafficking, money laundering, counterfeiting, and other
illegal activities linked to drug trafficking are also prevalent. Moreover,
these activities increasingly involve international criminal organizations,
such as the Brazilian-based Primeiro Comando da Capital (PCC),
operating in towns along the Paraguay-Brazil border. All in all, it is a
challenge for the National Anti-Drug Secretariat (SENAD), Paraguay’s
primary counternarcotics agency, which has just over 360 members.
Despite these challenges, in 2011 the Government of Paraguay
continued to disrupt the activities of drug traffickers through interdiction,
eradication, and demand reduction efforts led by SENAD and aided by
the Paraguayan National Police (PNP) and the Customs Administration.
Those agencies, along with the Attorney General’s Office, the Anti-
Money Laundering Secretariat, and the Supreme Court all welcome
cooperation with the United States in combating narcotics trafficking.
Paraguay is a party to the 1988 UN Drug Convention.
For Full report, click here
_________________________________________________________
US State Dept Trafficking in Persons Report 2011 (introduction):
(Tier 2)
Paraguay is a source country for women and children subjected to sex
trafficking, as well as a source country for men, women, and children
subjected to forced labor. Many Paraguayan trafficking victims are found
in Argentina, Chile, Bolivia, and Spain; smaller numbers of victims are
exploited in Brazil. In one case last year, 32 Paraguayan women were
identified in forced prostitution in the Spanish province of Cuenca and, in
two other cases, over 50 Paraguayan women were rescued from forced
prostitution in brothels in Argentina. Domestic servitude and sex
trafficking of adults and children within the country remain a serious
problem. Indigenous persons are particularly at risk of being subjected
to forced labor or forced prostitution, and during the reporting period the
local media highlighted cases of indigenous girls in prostitution at the
behest of family members. Poor children from rural areas are subjected
to forced commercial sexual exploitation and domestic servitude in urban
centers such as Asuncion, Ciudad del Este, and Encarnacion, and a
significant number of street children are trafficking victims. To a lesser
extent foreign trafficking victims from Bolivia and Peru have been
identified in situations of forced labor within Paraguay. Many
undocumented migrants, some of whom could be trafficked, travel
through the Tri-Border Area of Paraguay, Argentina, and Brazil.
The Government of Paraguay does not fully comply with the minimum
standards for the elimination of trafficking; however, it is making
significant efforts to do so. The government sustained modest anti-
trafficking law enforcement efforts and significantly increased funding for
victim services and awareness efforts during the year. However, the
government did not convict any trafficking offenders during the reporting
period. The current legal framework failed to adequately prohibit internal
cases of forced labor or forced prostitution and authorities had no formal
system to proactively identify trafficking victims.
For full report click here
_________________________________________________________
US State Dept Terrorism Report 2010
Overview: Increased activity by an internal insurgent group and the
resulting public demands for action brought terrorism to the policy
forefront. President Fernando Lugo responded to threats by mobilizing
the military in April and passing terrorism legislation in June. Though
Paraguay enhanced its counterterrorism efforts, it remained hampered
by ineffective immigration, customs, and law enforcement controls along
its porous borders, particularly the Tri-Border Area (TBA) with Argentina
and Brazil. The June arrest of alleged Hizballah financier Moussa Ali
Hamdan in Ciudad del Este, Paraguay, demonstrated the area's
permissive environment for terrorist financing activity. Limited resources,
sporadic interagency cooperation, and corruption within customs, the
police, the public ministry, and the judicial sector, impeded the
government’s law enforcement initiatives throughout the country.
Since 2008, the leftist Paraguayan People's Army (EPP) has been active
in the northern departments of Paraguay, abutting the Brazilian border.
Membership statistics for the EPP are difficult to establish, but it is
believed to be a small, decentralized group operating mainly in
Concepcion Department. The Paraguayan government classified the
EPP as an internal terrorist organization based on several kidnappings
and multiple shootouts with the police and military. The EPP claimed
responsibility for a 2009 explosion and a December 2010 bomb threat,
both at the Palace of Justice, though neither claim was verified.
Legislation and Law Enforcement: On June 23, President Fernando
Lugo signed a new terrorism bill into law that defines and criminalizes
terrorist activities and aids governmental counterterrorism efforts,
particularly in relation to terrorism financing, when paired with
Paraguay's 2009 anti-money laundering law. The law established
sentencing guidelines from five to 30 years for terrorism-based crimes.
In May, five U.S. Border Patrol and Customs and Border Protection
(CBP) Officers conducted an assessment of Paraguay's porous eastern
border with Brazil and Argentina. Based on its assessment, the CBP and
Border Patrol conducted a three-week training session in September to
assist Paraguayan Customs Officials and Police in better confronting
smuggling and related crimes in areas known as sources of terrorist
financing.
Countering Terrorist Finance: The new counterterrorism law includes a
terrorist financing provision stipulating prison sentences of five to 15
years for financial assistance, interaction, or connection with terrorist
organizations and/or individuals. Paired with 2009's anti-money
laundering law, the new legislation provides Paraguay's Secretariat for
the Prevention of Money Laundering (SEPRELAD) better tracking,
reporting, and enforcement powers.
Paraguay is a member of the Financial Action Task Force (FATF) against
Money Laundering in South America (GAFISUD). Paraguay assumed
GAFISUD's rotating Presidency in December 2010. As a member of the
Egmont Group, SEPRELAD exchanges information with other members
of the Egmont Group, including the United States.
Paraguayan law does not provide for freezing or seizure of many
criminally derived assets. Authorities can only freeze assets of persons
under investigation for a crime in which the state risks loss of revenue
from furtherance of a criminal act, such as tax evasion. In December,
SEPRELAD's Minister submitted a draft bill to the Presidency that
requests SEPRELAD be given administrative power to freeze suspected
money laundering and terrorism-related assets.
Regional and International Cooperation: In March, Paraguay signed an
agreement with Colombia to fight terrorism and organized crime.
Paraguay's strongest regional partner in counterterrorism and law
enforcement activities was Brazil. In October, Brazilian and Paraguayan
ministers met in Asuncion and announced a plan to coordinate activities
along the border to counter arms and narcotics trafficking, though no
agreement has been signed.
Paraguay signed the Beijing Convention on the Suppression of Unlawful
Acts Relating to International Civil Aviation and the Beijing Protocol to the
Convention for the Suppression of Unlawful Seizure of Aircraft at the
conclusion of an International Civil Aviation Organization diplomatic
conference in September.
_________________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
FIU - Secretaria de Prevención de Lavado de Dinero o Bienes
(SEPRELAD)
|
|
FATF Statement re AML Strategic Deficiencies:
Date: 16 February 2012
The FATF welcomes Paraguay’s significant progress in improving
its AML/CFT regime and notes that Paraguay has largely met its
commitments in its Action Plan regarding the strategic deficiencies
that the FATF had identified in February 2010. Paraguay is
therefore no longer subject to FATF’s monitoring process under
its on-going global AML/CFT compliance process. Paraguay will
work with GAFISUD as it continues to address the full range of
AML/CFT issues identified in its Mutual Evaluation Report,
particularly regarding further implementation of Special
Recommendation VI and Special Recommendation IX.
____________________________________________________
Sanctions:
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2012:
Paraguay is a major drug transit country and money laundering
center. A multi-billion dollar contraband trade, fed in part by
endemic, institutional corruption, occurs in the border region
shared with Argentina and Brazil (the tri-border area, or TBA) and
facilitates much of the money laundering in Paraguay. While the
Government of Paraguay (GOP) suspects proceeds from
narcotics trafficking are often laundered in the country, it is
difficult to determine what percentage of the total amount of
laundered funds is generated from narcotics sales or is controlled
by domestic and/or international drug trafficking organizations,
organized crime, or terrorist groups. Weak controls in the financial
sector, open borders, bearer shares, casinos, a surfeit of
unregulated exchange houses, lax or non-enforcement of cross-
border transportation of currency and negotiable instruments,
ineffective and/or corrupt customs inspectors and police, and
minimal enforcement activity for financial crimes allows money
launderers, transnational criminal syndicates, and possible
terrorist financiers to take advantage of Paraguay’s financial
system.
Ciudad del Este, on Paraguay’s border with Brazil and Argentina,
represents the heart of Paraguay’s “informal” economy, estimated
to be double Paraguay’s $18 billion GDP. The area is well known
for arms and narcotics trafficking, document forging, smuggling,
counterfeiting, and violations of intellectual property rights, with
the illicit proceeds from these crimes a source of laundered funds.
Some proceeds of these illicit activities have been supplied to
terrorist organizations, and trade-based money laundering occurs
in the region.
As a land-locked nation, Paraguay does not have an offshore
sector. Paraguay’s port authority manages free trade ports and
warehouses in Argentina (Buenos Aires and Rosario); Brazil
(Paranagua, Santos, and Rio Grande do Sul); Chile (Antofagasta
and Mejillones); and Uruguay (Montevideo and Nueva Palmira).
Money laundering likely occurs in the formal financial sector and
definitely occurs in the non-bank financial sector, particularly
exchange houses, which are often used to move illicit proceeds
both from within and outside Paraguay into the U.S. banking
system. Large sums of dollars generated from normal commercial
activity and suspected illicit commercial activity are also
transported physically from Paraguay to Uruguay and Brazil, with
onward transfers likely to destinations including banking centers
in the United States
For additional information focusing on terrorist financing, please
refer to the Department of State’s Country Reports on Terrorism,
which can be found here: http://www.state.gov/j/ct/rls/crt/
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: YES
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: NO
Domestic: YES
KYC covered entities: Banks, finance companies, insurance
companies, exchange houses, stock exchanges and securities
dealers, investment companies, trust companies, mutual and
pension fund administrators, credit and consumer cooperatives,
gaming entities, real estate brokers, nongovernmental
organizations, pawn shops, and dealers in precious stones,
metals, art, and antiques
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 279 - January 2011 to
November 2011
Number of CTRs received and time frame: 1,341,162 in 2010
STR covered entities: Banks, finance companies, insurance
companies, exchange houses, stock exchanges and securities
dealers, investment companies, trust companies, mutual and
pension fund administrators, credit and consumer cooperatives,
gaming entities, real estate brokers, nongovernmental
organizations, pawn shops, and dealers in precious stones,
metals, art, and antiques
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: Five in 2011
Convictions: None in 2011
Records exchange mechanism:
With U.S.: MLAT: NO Other mechanism: YES
With other governments/jurisdictions: YES
Paraguay is a member of the Financial Action Task Force (FATF)
against Money Laundering in South America (GAFISUD), a FATF-
style regional body. Its most recent evaluation, conducted by the
IMF, can be found here: http://www.imf.
org/external/pubs/ft/scr/2009/cr09235.pdf
Enforcement and implementation issues and comments:
For reporting entities that do not have a natural supervisory
authority, the Secretariat for the Prevention of Laundering of
Money or Assets (SEPRELAD) is the competent supervisor.
SEPRELAD’s budget has increased by 166% from 2008 to 2011.
SEPRELAD increased its staff approximately 20% in 2011 and
has made considerable investment in infrastructure, software up-
dates and equipment. The 2011 STR numbers dropped
significantly from the 812 reported in 2010 due to the
implementation of new software at SEPRELAD that better
establishes the requirements for an STR for obligated institutions.
The GOP took a welcomed step forward in regard to
implementation of UNSCR 1267 in October 2011 when it passed a
long-awaited asset freezing law that enables SEPRELAD to freeze
the assets of designated terrorist financiers, or those conducting
transactions with UN designated terrorists or terrorist financiers,
indefinitely in as little as 36 hours once notification of UN
designation is sent or a request from a foreign country relating to
UNSCR 1373 is received. The new law complements the June
2010 anti-terrorism legislation criminalizing terrorist financing.
Prosecutors handling financial crimes have limited resources to
investigate and prosecute. In addition, the selection of judges,
prosecutors and public defenders is largely based on politics,
nepotism, and influence peddling. The lack of interagency
cooperation throughout Paraguay, and particularly within law
enforcement, is an impediment to effective enforcement,
prosecution, and reporting efforts.
Asset forfeiture legislation is desperately needed in Paraguay.
Apart from the new asset freezing law, Paraguayan law does not
provide for freezing or seizure of many criminally derived assets.
Law enforcement can only freeze assets of persons under
investigation for a crime in which the state risks loss of revenue
from furtherance of a criminal act, such as tax evasion.
Enforcement agencies have limited authority to seize or forfeit
assets of suspected money launderers and do not include bank
accounts. When a seizure does occur, law enforcement
authorities cannot dispose of these assets until a defendant is
convicted, which frequently takes years.
The non-bank financial sector operates in a weak regulatory
environment with limited supervision. The organization
responsible for regulating and supervising credit unions, the
National Institute of Cooperatives, lacks the capacity to enforce
compliance. Exchange houses are another non-bank sector
where enforcement of compliance requirements remains limited,
though following the implementation of additional supervisory
measures two currency exchange houses were closed in 2011.
People entering or leaving the country must declare to customs
values exceeding $10,000 or its equivalent in other currencies.
However, required customs declaration reports are seldom
checked. Customs operations at the airports or overland entry
points provide little control of cross-border cash movements.
Although Paraguay has made overall progress to improve its
AML/CFT regime, and Paraguay’s efforts and political commitment
have been reflected in the issuance of proper legislation, the
authorities’ broader coordination capacity and the strengthening
of their institutional frameworks need work. Paraguayan
authorities will have to demonstrate the effectiveness of the
legislation in force and of several mechanisms put in place.
Date: 16 February 2012
The FATF welcomes Paraguay’s significant progress in improving
its AML/CFT regime and notes that Paraguay has largely met its
commitments in its Action Plan regarding the strategic deficiencies
that the FATF had identified in February 2010. Paraguay is
therefore no longer subject to FATF’s monitoring process under
its on-going global AML/CFT compliance process. Paraguay will
work with GAFISUD as it continues to address the full range of
AML/CFT issues identified in its Mutual Evaluation Report,
particularly regarding further implementation of Special
Recommendation VI and Special Recommendation IX.
____________________________________________________
Sanctions:
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2012:
Paraguay is a major drug transit country and money laundering
center. A multi-billion dollar contraband trade, fed in part by
endemic, institutional corruption, occurs in the border region
shared with Argentina and Brazil (the tri-border area, or TBA) and
facilitates much of the money laundering in Paraguay. While the
Government of Paraguay (GOP) suspects proceeds from
narcotics trafficking are often laundered in the country, it is
difficult to determine what percentage of the total amount of
laundered funds is generated from narcotics sales or is controlled
by domestic and/or international drug trafficking organizations,
organized crime, or terrorist groups. Weak controls in the financial
sector, open borders, bearer shares, casinos, a surfeit of
unregulated exchange houses, lax or non-enforcement of cross-
border transportation of currency and negotiable instruments,
ineffective and/or corrupt customs inspectors and police, and
minimal enforcement activity for financial crimes allows money
launderers, transnational criminal syndicates, and possible
terrorist financiers to take advantage of Paraguay’s financial
system.
Ciudad del Este, on Paraguay’s border with Brazil and Argentina,
represents the heart of Paraguay’s “informal” economy, estimated
to be double Paraguay’s $18 billion GDP. The area is well known
for arms and narcotics trafficking, document forging, smuggling,
counterfeiting, and violations of intellectual property rights, with
the illicit proceeds from these crimes a source of laundered funds.
Some proceeds of these illicit activities have been supplied to
terrorist organizations, and trade-based money laundering occurs
in the region.
As a land-locked nation, Paraguay does not have an offshore
sector. Paraguay’s port authority manages free trade ports and
warehouses in Argentina (Buenos Aires and Rosario); Brazil
(Paranagua, Santos, and Rio Grande do Sul); Chile (Antofagasta
and Mejillones); and Uruguay (Montevideo and Nueva Palmira).
Money laundering likely occurs in the formal financial sector and
definitely occurs in the non-bank financial sector, particularly
exchange houses, which are often used to move illicit proceeds
both from within and outside Paraguay into the U.S. banking
system. Large sums of dollars generated from normal commercial
activity and suspected illicit commercial activity are also
transported physically from Paraguay to Uruguay and Brazil, with
onward transfers likely to destinations including banking centers
in the United States
For additional information focusing on terrorist financing, please
refer to the Department of State’s Country Reports on Terrorism,
which can be found here: http://www.state.gov/j/ct/rls/crt/
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: YES
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: NO
Domestic: YES
KYC covered entities: Banks, finance companies, insurance
companies, exchange houses, stock exchanges and securities
dealers, investment companies, trust companies, mutual and
pension fund administrators, credit and consumer cooperatives,
gaming entities, real estate brokers, nongovernmental
organizations, pawn shops, and dealers in precious stones,
metals, art, and antiques
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 279 - January 2011 to
November 2011
Number of CTRs received and time frame: 1,341,162 in 2010
STR covered entities: Banks, finance companies, insurance
companies, exchange houses, stock exchanges and securities
dealers, investment companies, trust companies, mutual and
pension fund administrators, credit and consumer cooperatives,
gaming entities, real estate brokers, nongovernmental
organizations, pawn shops, and dealers in precious stones,
metals, art, and antiques
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: Five in 2011
Convictions: None in 2011
Records exchange mechanism:
With U.S.: MLAT: NO Other mechanism: YES
With other governments/jurisdictions: YES
Paraguay is a member of the Financial Action Task Force (FATF)
against Money Laundering in South America (GAFISUD), a FATF-
style regional body. Its most recent evaluation, conducted by the
IMF, can be found here: http://www.imf.
org/external/pubs/ft/scr/2009/cr09235.pdf
Enforcement and implementation issues and comments:
For reporting entities that do not have a natural supervisory
authority, the Secretariat for the Prevention of Laundering of
Money or Assets (SEPRELAD) is the competent supervisor.
SEPRELAD’s budget has increased by 166% from 2008 to 2011.
SEPRELAD increased its staff approximately 20% in 2011 and
has made considerable investment in infrastructure, software up-
dates and equipment. The 2011 STR numbers dropped
significantly from the 812 reported in 2010 due to the
implementation of new software at SEPRELAD that better
establishes the requirements for an STR for obligated institutions.
The GOP took a welcomed step forward in regard to
implementation of UNSCR 1267 in October 2011 when it passed a
long-awaited asset freezing law that enables SEPRELAD to freeze
the assets of designated terrorist financiers, or those conducting
transactions with UN designated terrorists or terrorist financiers,
indefinitely in as little as 36 hours once notification of UN
designation is sent or a request from a foreign country relating to
UNSCR 1373 is received. The new law complements the June
2010 anti-terrorism legislation criminalizing terrorist financing.
Prosecutors handling financial crimes have limited resources to
investigate and prosecute. In addition, the selection of judges,
prosecutors and public defenders is largely based on politics,
nepotism, and influence peddling. The lack of interagency
cooperation throughout Paraguay, and particularly within law
enforcement, is an impediment to effective enforcement,
prosecution, and reporting efforts.
Asset forfeiture legislation is desperately needed in Paraguay.
Apart from the new asset freezing law, Paraguayan law does not
provide for freezing or seizure of many criminally derived assets.
Law enforcement can only freeze assets of persons under
investigation for a crime in which the state risks loss of revenue
from furtherance of a criminal act, such as tax evasion.
Enforcement agencies have limited authority to seize or forfeit
assets of suspected money launderers and do not include bank
accounts. When a seizure does occur, law enforcement
authorities cannot dispose of these assets until a defendant is
convicted, which frequently takes years.
The non-bank financial sector operates in a weak regulatory
environment with limited supervision. The organization
responsible for regulating and supervising credit unions, the
National Institute of Cooperatives, lacks the capacity to enforce
compliance. Exchange houses are another non-bank sector
where enforcement of compliance requirements remains limited,
though following the implementation of additional supervisory
measures two currency exchange houses were closed in 2011.
People entering or leaving the country must declare to customs
values exceeding $10,000 or its equivalent in other currencies.
However, required customs declaration reports are seldom
checked. Customs operations at the airports or overland entry
points provide little control of cross-border cash movements.
Although Paraguay has made overall progress to improve its
AML/CFT regime, and Paraguay’s efforts and political commitment
have been reflected in the issuance of proper legislation, the
authorities’ broader coordination capacity and the strengthening
of their institutional frameworks need work. Paraguayan
authorities will have to demonstrate the effectiveness of the
legislation in force and of several mechanisms put in place.
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| Further Tables |
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*Please note that FATF deems that a country has significant aml deficiencies if
any of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated
either Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
any of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated
either Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
| PARAGUAY |
| KnowYourCountry |
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*Terrorist Safe Haven - Border area with Argentina/Brazil
| Last Updated: 16 April 2012 |