VZCZCXYZ0016
PP RUEHWEB

DE RUEHAC #0994/01 3381816
ZNR UUUUU ZZH
P 041816Z DEC 07
FM AMEMBASSY ASUNCION
TO RUEHC/SECSTATE WASHDC PRIORITY 6416
RUEKJCS/USSOCOM WO WASHDC
RUEKJCS/SECDEF WASHDC
RHMFISS/HQ USSOUTHCOM MIAMI FL
RUEAWJB/DEPT OF JUSTICE WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEABND/DEA HQS WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
INFO RUCNMER/MERCOSUR COLLECTIVE
RHEHNCS/NSC WASHDC

UNCLAS ASUNCION 000994 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
PASS TO STATE WHA/FO CMCMULLEN, WHA/BSC MDRUCKER, KREAD, CCROFT, FOR 
INL/FO CMCCAMPBELL, INL/LP ASMITH, DHAWKINS, DGRAHAM, FOR S/CT 
DDAILEY, GNOVIS, ASIERRA, FOR F RGREENE, FOR DOJ/KCRM CALEXANDRE, 
KOCONNOR 
 
E.O. 12958: N/A 
TAGS: PREL ECON SNAR PGOV PA
SUBJECT: FIGHTING THE GOOD FIGHT 
 
This cable contains an action request in Paragraph 8. 
 
-------- 
SUMMARY 
-------- 
 
¶1. (U) Paraguay is the third most corrupt country in the hemisphere 
after Haiti and Venezuela, and it has an antiquated and weak 
legislative framework.  Regional Legal Advisor (RLA) Kevin Sundwall 
arrived in Asuncion in March 2007 and began working with committed 
Paraguayan counterparts to bring about judicial reform.  As a member 
of the Senate committee charged with drafting new laws, Sundwall has 
strengthened the capacity of Paraguayan authorities on terrorist 
financing, money-laundering, and intellectual property violations in 
the Tri-border Area (TBA); assisted in drafting Paraguay's new 
criminal and criminal procedure codes and in implementing 
Argentina's terrorist financing law; proposed a TBA Money-laundering 
and Intellectual Property (IP) Task Force; coordinated training of 
Financial Investigative Unit (FIU) analysts; facilitated 
communication between Tri-border and Southern Cone Law Enforcement 
officials and U.S. law enforcement; and has given high-profile 
presentations to regional conferences on money laundering and 
terrorism finance.  While RLA Sundwall has made great strides over 
the past eight months, much work remains to be done, including 
lobbying for the final passage of Paraguay's new criminal code; 
shepherding Paraguay's criminal procedure code through Congress; 
drafting a new asset forfeiture law, counter-terrorist legislation, 
and a law to institutionalize Paraguay's Anti-Piracy Investigation 
Unit (UTE); training prosecutors/judges on anti-money laundering 
legislation; and continuing coordination of U.S. law enforcement 
training in the Tri-Border Area (TBA). 
 
¶2. (U) SUMMARY CONTINUED: The estimated cost of RLA's second year at 
Post is USD 465,000; to date, Post has commitments for USD 195,000 
(65,000 from S/CT and the TFWG; 65,000 from USAID/MCC to accomplish 
specific tasks under Paraguay's current Millennium Challenge Account 
Threshold Program; and perhaps an additional 65,000 from DOJ/OPDAT 
if INL grants permission for OPDAT to reprogram OPDAT pipeline 
funds).  Post still needs USD 270,000 to bridge the funding gap. 
RLA Sundwall's impressive inroads into Paraguayan legal reform 
should not be abruptly abandoned after the USG has already born the 
more-expensive start-up costs associated with his first year at 
Post.  At a time when the USG's top priority is the war on terror, 
it would be foolish to neglect the TBA, which is the single largest 
non-NEA funding source for Hezbollah, as well as the largest 
regional hub for trafficking in pirated goods, arms, drugs, and 
persons.  This is a small, sound investment which will yield large 
returns.  We urge Washington to support extension of this key RLA 
position.  END SUMMARY. 
 
---------------------------- 
PARAGUAY'S LEGAL CHALLENGES 
---------------------------- 
 
¶3. (U) Paraguay is the third most corrupt country in the hemisphere 
after Haiti and Venezuela.  A 2007 Transparency Paraguay corruption 
survey further found that the Paraguayan public considers the Duarte 
administration the most corrupt since 1997.  Paraguay's judicial 
system (including its public ministry) is routinely subject to 
corruption and political influence.  Paraguay lags behind many of 
its neighbors in terms of its judicial reform and its efforts to 
adopt an accusatory criminal justice system.  At this writing, 
Paraguay's penal code dates to 1999 (with the last major overhaul 
done in 1914), it does not have terrorist finance legislation, and 
its current money laundering legislation and asset forfeiture laws 
are weak.  Those caveats aside, many Paraguayan government officials 
have demonstrated their commitment to eradicating corruption and 
strengthening Paraguay's legal framework, and have made significant 
progress toward those goals. 
 
----------------------------------------- 
RLA'S ACCOMPLISHMENTS IN HIS FIRST YEAR 
----------------------------------------- 
 
¶4. (U) Regional Legal Advisor (RLA) Kevin Sundwall, from the 
Department of Justice's OPDAT program, arrived in Asuncion in March 
2007 and began working with his Paraguayan counterparts to improve 
Paraguay's criminal legal framework.  NADR funding allocated by 
State's S/CT and the Terrorist Finance Working Group (TFWG) provided 
the funding for RLA Sundwall's first year at Post, at a cost of 
approximately $580,000.  Funding support will end in March 2008. 
 
¶5. (U) Sundwall sits on the senate committee charged with drafting 
new laws, and has unprecedented access and influence over the 
law-making process.  In just eight months, Sundwall has accomplished 
the following, building on the work of his predecessor: 
 
--Strengthened the capacity of investigators, prosecutors and judges 
on regional terrorist financing, money-laundering, and anti-piracy 
crimes in the Tri-border Area (TBA) via a two-week investigations 
course held in October 2007.  Sundwall also trained police, 
prosecutors and judges on Trial Advocacy (Argentina, June 2007 - 2 
courses); intellectual property (Argentina, August 2007); and 
Advanced Interviewing and Interrogation Techniques (Paraguay, 
October 2007). 
 
--Assisted in drafting Paraguay's new criminal code, which includes 
an improved money laundering statute, trafficking in persons 
legislation, and intellectual property protections.  The bill, 
introduced in Congress in March, has been approved once by both 
chambers of Congress and is pending final congressional approval in 
the Senate. 
--Assisted in drafting a new criminal procedure code, which is ready 
to be presented to Congress.  RLA is developing a curriculum for 
training investigators, prosecutors and judges on the new code, 
which will be key to helping Paraguay combat corruption. 
--Taught Trial Advocacy courses to assist with implementation of 
Argentina's terrorist financing law, which was passed in the summer 
of 2007, and also gave two presentations to high-profile anti-money 
laundering and counter-terrorism finance conferences in Argentina. 
--Proposed a vetted Tri-border Money-laundering and Intellectual 
Property (IP) Task Force comprised of prosecutors and investigators 
from Argentina, Brazil and Paraguay to coordinate investigations and 
prosecutions involving terrorist financing, money-laundering and 
intellectual property crimes. 
--Coordinated training of eight Financial Investigative Unit (FIU) 
analysts to produce investigative reports that financial crimes 
prosecutors can use to build cases against money launderers and 
terrorist financers. 
--Facilitated communication between Tri-border and Southern Cone Law 
Enforcement officials and U.S. law enforcement (FBI, DEA, ICE, 
intelligence community, military, and State Department).  Organized 
an August TBA conference for USG officials from Paraguay, Argentina, 
Brazil, and Washington to improve U.S. coordination and 
information-sharing on TBA issues. 
-------------------------------- 
RLA'S GOALS FOR THE COMING YEAR 
-------------------------------- 
 
¶6. (U) While RLA Sundwall has made great strides over the past eight 
months, much work remains to be done.  In the coming year, the RLA's 
"to do list" includes the following: 
 
--Collaborate with Embassy's Front Office and pol/econ section to 
lobby for the immediate final passage of Paraguay's new criminal 
code.  Senate President Saguier said the bill would be passed in 
March 2008 (via an up/down vote, since both chambers have already 
reviewed the bill and made revisions). 
 
--Shepherd Paraguay's criminal procedure code through Congress, 
which will be essential to ensure effective implementation of the 
new penal code.  The new criminal procedure code will eliminate the 
current requirement that the public ministry inform the defendant 
and his attorney of the state's intent to investigate, as well as 
the defense attorney's ability to be involved in the entire 
investigative process.  The revisions further provide for cross 
examination and confrontation of witnesses, and extend the current, 
short statutes of limitation, which frequently lead to the dismissal 
of cases.  The revised code also eliminates interlocutory appeals of 
all procedural issues during the course of a case, which further 
delay justice and cause statutes of limitation to run. 
 
--Draft a new asset forfeiture law that will improve Paraguay's 
ability to fund its law enforcement, and particularly its 
counter-narcotics, efforts.  Seized assets currently sit in 
warehouses for years while criminal procedures are pending. 
Paraguay's counter-narcotics agency, SENAD, sought U.S. assistance 
in drafting this law. 
 
--Train prosecutors/judges on anti-money laundering legislation once 
Congress approves it.  From the date the new penal code, including 
money laundering provisions, is signed into law, there will be a 
one-year delay in implementation to allow for training.  Working 
with RLA Moreno-Taxman and the LEGATTs from Argentina and Brazil, 
RLA Sundwall will develop a curriculum and train prosecutors, 
investigators and judges from the TBA on terrorist financing, money 
laundering, trial advocacy, intellectual property and cyber crimes. 
Such training is critical to Paraguay's future success in 
prosecuting money laundering cases. 
 
--Stand up and train a task force to combat terrorist financing, 
intellectual property violations, and money laundering in the TBA. 
RLA Sundwall will work closely with Embassy Brazil's RLA Karine 
Moreno-Taxman and the LEGATTs from the respective countries to 
select top quality investigators and prosecutors for this unit and 
to ensure that it receives proper training. 
 
--Draft a stand-alone counter-terrorist finance bill to be 
introduced to Congress in early 2008.  The penal code currently 
pending final passage in Congress contained controversial terrorist 
finance provisions, which Congress struck from the almost-final 
version of the criminal code.  Senate President Saguier told U.S. 
Senate Majority Leader Harry Reid November 26 that Paraguay would 
pass a terrorism law next term; actors throughout Paraguayan society 
recognize the need for terrorism legislation.  Without such a law by 
May 2008, the Egmont Group will suspend Paraguay. 
 
--Draft a law to ensure the continued legal existence of Paraguay's 
Anti-Piracy Investigation Unit (UTE).  This INL-supported unit is 
vital in the fight against intellectual property violations in 
Paraguay.  The unit currently exists pursuant to presidential 
decree.  In light of April 2008 national elections, it is imperative 
that the unit be formally incorporated into one of the government 
ministries.  Otherwise, all of the financial support and training 
support Post has provided to the Unit over the past few years will 
have been for naught, as the unit could cease to exist under a new 
president.  The Paraguayan government has demonstrated its 
commitment to intellectual property rights by including this issue 
in the intellectual property Memorandum of Understanding it is 
discussing with the USG at the December 4 Joint Council on Trade and 
Investment (JCTI), hosted by Paraguay. 
 
--Coordinate U.S. law enforcement training in the TBA and facilitate 
investigative cooperation between TBA countries and U.S. law 
enforcement. 
 
--Offer advice on Bolivia's criminal procedural code pursuant to a 
request from DEA Bolivia. 
 
--------------- 
AN ACCOUNTING 
--------------- 
 
¶7. (U) The estimated cost of RLA's second year at Post is USD 
465,000.  To date, Post has secured funding from State's S/CT and 
the TFWG, which have promised USD 65,000 for the position. 
Additionally, DOJ/OPDAT intends to request permission from INL to 
reprogram USD 65,000 from pipeline funds already allocated to OPDAT. 
 Additionally, Post will contribute USD 65,000 in USAID/MCC funding 
from Paraguay's current Millennium Challenge Account Threshold 
Program for RLA to conduct targeted training and provide technical 
assistance to anti-corruption prosecutors and personnel associated 
with Paraguay's planned criminal forensic lab.  Given these funding 
sources, Post still needs USD 270,000 to bridge the funding gap and 
ensure the RLA position is funded next year. 
 
--------------------------------------------- ---------- 
ACTION REQUEST: FUNDING NEEDED BEGINNING IN MARCH 2008 
--------------------------------------------- ---------- 
 
¶8. (U) ACTION REQUEST FOR INL: Please allow OPDAT to reprogram USD 
65,000 from OPDAT pipeline funds as well as any additional funding 
that OPDAT subsequently identifies as available for reprogramming to 
be used in Paraguay.  ACTION REQUEST FOR INL, WHA, USAID, S/CT, DOJ, 
DOD, and any other interested USG element or agency:  Please provide 
USD 270,000 in funding for Asuncion's RLA position to bridge the 
funding gap, as Post has exhausted all possible local funding 
sources.  RLA Sundwall has made impressive inroads into Paraguayan 
legal reform.  Those efforts should not be abruptly abandoned, after 
the USG has already born the more-expensive start-up cost to move 
RLA to Post.  Legal reform in Latin America can be slow, but 
Paraguay offers the unique opportunity for the USG to have a real 
impact.  Many Paraguayan interlocutors solicit and accept U.S. legal 
advice regarding Paraguay's legislative framework, and they are 
disposed to continue close collaboration with the USG in Asuncion. 
With national elections scheduled for April 2008, we will have a 
renewed opportunity to move legal reform forward. 
 
¶9. (SBU) Extending the tenure of Embassy's RLA is a top mission 
priority.  SOCOM Commander Admiral Olson and S/CT Coordinator 
Ambassador Dell Dailey, as well as the other Southern Cone 
ambassadors, have affirmed their support for this initiative.  DOD 
elements have expressed interest in providing financial support, but 
say they are restricted from doing so.  At a time when the USG's top 
priority is the war on terror, it would be foolish to neglect the 
TBA, which is the single largest non-NEA funding source for 
Hizbollah, as well as the largest regional hub for trafficking in 
pirated goods, arms, drugs, and persons.  This is a small, sound 
investment which will yield large returns.  We urge Washington to 
support extension of this key RLA position. 
 
 
CASON