This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 ASUNCION 000681 
 
SIPDIS 
 
STATE FOR WHA/BSC AND EB/IFD/OIA 
STATE PASS TO USAID FOR LAC/AA 
STATE PASS TO USTR FOR SCRONIN AND LYANG 
NSC FOR KIM BREIER 
TREASURY FOR OSIA MAUREEN WAFER 
TREASURY FOR OTA WARFIELD, VAN KOCH, MILLAR 
COMMERCE FOR ITA SARAH COOK 
SOUTHCOM FOR POLAD DAN JOHNSON 
 
E.O. 12958: N/A 
TAGS: PGOV PREL PINR SNAR ETRD EPET KCRM VE PA GTIP
SUBJECT: PARAGUAY POLITICAL AND ECONOMIC UPDATE, MAY 14-20 
 
REF: A. ASUNCION 487 
 
     ¶B. ASUNCION 649 
 
¶1. (U) Summary: 
------------------ 
-- Paraguay to import Venezuelan oil? 
-- Paraguay establishes relations with Bahrain 
-- Paraguay to repatriate 29 women from Argentina 
-- Additional drug busts in Paraguay 
 
Paraguay to import Venezuelan oil? 
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¶2.  (U)  On May 12, the Senate ratified an energy agreement 
with Venezuela through which Paraguay would be able to import 
18,600 barrels of Venezuelan crude oil per day. The one-year 
agreement was signed by Presidents Duarte and Chavez in 
November, and permits Paraguay to pay 75 percent upon 
delivery and the remainder over 15 years at a 2 percent 
interest rate (ref A). The GOP has argued that the 
arrangement offers Paraguay the opportunity to invest in 
social programs by paying with credit, as well as the 
prospect of exchanging crude oil for agricultural and meat 
products. However, Paraguay's state-owned oil company has 
said the ratification comes too late to arrange a deal in the 
short term, given solicitations already issued. 
 
Paraguay opens relations with Bahrain; VP to Israel 
--------------------------------------------- ------ 
¶3. (U) On May 14, the Foreign Ministry announced that 
Paraguay established diplomatic relations with Bahrain. This 
is the second new bilateral agreement Paraguay has signed 
since Mercosur established a new framework agreement for 
economic cooperation with Arab states during the recent 
Arab-South American Summit in Brasilia (ref B). 
 
      ¶4. (U) Separately, the press reported on May 16 that 
Vice President Castiglioni will visit Israel in late August 
or early September.  According to Israel's Honorary Consul to 
Paraguay, Max Haber, this will be the first time that a 
Paraguayan president or vice president visits Israel, despite 
55 years of diplomatic relations. 
 
TIP: Paraguay to repatriate 29 women from Argentina 
--------------------------------------------- - 
 
¶5. (U)  Paraguay's Ambassador to Argentina Orlando Fiorotto, 
Argentina's Ambassador to Paraguay Rafael Edgardo Roma, and 
Paraguay's Director of the Rapatriation Office Nicasia 
Maldonado met in Asuncion to discuss proceedings in the case 
of 29 Paraguayan females -- of which two are minors -- who 
had been tricked into prostitution and were discovered 
several weeks ago in Cordoba during a roundup of brothels. 
Maldonado will travel to Cordoba to prepare the ground for 
their return to Paraguay.  Fiorotto stressed the importance 
Paraguay attaches to investigation of this case and 
prosecution of those parties involved. 
 
Additional drug busts in Paraguay 
--------------------------------- 
¶6. (U) On May 15, during a joint raid on a ranch in Itanara, 
Candindeyu, agents from the National Anti-drug Secretariat 
(SENAD) and the Brazilian Federal Police seized 414 kg of 
pressed marijuana. Authorities arrested a Paraguayan 
national, Osvaldo Rodriguez, and three Brazilians: Vicente 
Alero Filho, Moises Dos Santos, and Alexander Pereira da 
Silva.  Local press reported that the marijuana belonged to 
Brazilian drug trafficker, Ubirata Brescobist, who is 
currently suspected to be moving between Candindeyu and 
Amambay departments. 
 
¶7. (U) In a separate case, Paraguayan and Brazilian 
authorities conducted a joint operation that resulted in the 
seizure of approximately 7.5 tons of marijuana in Ponta Pora, 
Brazil, on May 16, leading to the arrest of at least five 
Brazilian drug traffickers. During the operation, authorities 
intercepted two trucks concealing packages of marijuana 
shipped from the mountains of Amambay and intended for 
Brazil's markets. 
 
¶8. (U)  On May 10, one of the SENAD detector dogs, Bonita, 
discovered 995 grams of cocaine concealed in a shipment of 
backpacks from Ciudad del Este en route to Cameroon (ref B). 
The drugs were hidden inside metal backpack frames, each 
backpack containing around 90 grams of cocaine.  SENAD agents 
along with two prosecutors thoroughly searched the shipment 
and took photographs of the backpacks.  This week, 
authorities arrested one individual in Ciudad del Este 
suspected of mailing the package and continue to search for 
another involved in the case. On May 19, SENAD officers in 
CDE confiscated five kilograms of cocaine and arrested a 
Nigerian national. The arrestee is suspected of shipping the 
cocaine found on May 10. 
KEANE