Logo

Paraguay enacted its first counterterrorism law in 2010, but the country continues to allow representatives of internationally designated entities freedom of movement in the country.

Hezbollah continues to use Paraguay as a fundraising and planning base of operations. Paraguayan authorities have denied Hezbollah’s presence in the country.

Overview

Numerous terrorist groups operate in Paraguay’s southeast near its border with Argentina and Brazil. The region, known as the Tri-Border Area (TBA) of South America, is considered a hotspot for criminal and terrorist activity. U.S.-sanctioned terrorist groups, including Hezbollah, al-Qaeda, and Hamas, are believed to recruit, plan attacks, and fundraise in the TBA, and within Paraguay specifically. * However, Paraguay’s government is not well-equipped to deal with these terrorist threats, and many of its domestic policies and frameworks enable illicit activity to continue. * Corruption plagues Paraguay’s government and law enforcement agencies, and the funds generated from Paraguay’s illicit tobacco trade have reportedly been used to fund groups including Hezbollah and al-Qaeda. The country’s principal source of illegal tobacco exports is a tobacco company owned by Horacio Cartés, Paraguay’s president from 2013 to 2018. *

Extremist Groups Operating in Paraguay

Al-Qaeda

The global jihadi Salafist network al-Qaeda reportedly operates out of the TBA, where it has sleeper cells, plots attacks, and conducts fundraising operations through illicit activities such as drug trafficking. The group’s roots in the region trace back to 1995, when Osama bin Laden traveled to the TBA and participated in meetings at local mosques, according to the Library of Congress. Authorities reportedly foiled al-Qaeda plots to bomb the U.S. embassy in Asunción in 1996 and Jewish targets in Ciudad del Este in 1999. * In the early 2000s, al-Qaeda reportedly attempted to establish a base in the Arab community near Ciudad del Este, and in 2002, reports surfaced claiming that al-Qaeda had established terrorist training camps on the Paraguayan border. * Paraguayan authorities have arrested at least three individuals who were allegedly fundraising for al-Qaeda in Ciudad del Este, and the group has reportedly benefited significantly from Paraguay’s illicit tobacco trade. *

Designated by:

Australia, Canada, France, EU, India, Israel, New Zealand, United Arab Emirates, Kingdom, United Nations, United States

Hezbollah

Hezbollah, a U.S.-designated and Iranian-backed Lebanese terrorist group, has reportedly operated out of the TBA since the mid-1980s, from where it has operated sleeper cells, conducting fundraising activities, and plotted attacks. * Authorities reportedly foiled Hezbollah-linked plots to bomb the U.S. embassy in Asunción in 1996 and Jewish targets in Ciudad del Este in 1999. * Although Paraguayan authorities reportedly deny that Hezbollah has a presence in the country, several U.S.-designated Hezbollah members have held Paraguayan citizenship and are known to have operated out of Ciudad del Este, including notorious fundraisers Assad Ahmad Barakat and Sobhi Mahmoud Fayad. * The U.S.-designated Shopping Uniamérica shopping center (previously known as Galería Page) in Ciudad del Este reportedly serves as a regional command post for Hezbollah. Hezbollah operatives run businesses there which are used to generate funds for the group. * Senior Hezbollah members have also reportedly served as the leaders of major mosques in Ciudad del Este as recently as 2008. *

Designated by:

Arab League, Australia, Bahrain, Canada, European Union, France, Germany, Gulf Cooperation Council, Israel, Netherlands, New Zealand, United Kingdom, United States

Hamas

Hamas, a U.S.-designated Palestinian terrorist group, reportedly operates out of the TBA. According to a report from the Library of Congress, Hamas actively uses the TBA as a "support base" for its operations from where it has operated sleeper cells and plotted attacks. In 1999, authorities reportedly arrested several Hamas members involved in a plot to launch simultaneous attacks on Jewish targets in Ciudad del Este and several other cities. In November 2000, Paraguayan authorities arrested a suspected Hamas explosives expert in Ciudad del Este who was reportedly involved in a plot to bomb the U.S. and Israeli embassies in Asunción. Hamas has also conducted fundraising activities in the TBA and reportedly has transferred funds using Paraguayan financial institutions. In 2001, Paraguayan authorities arrested three Hamas-linked individuals in Ciudad del Este and the nearby city of Encarnación who were reportedly fundraising in support of terrorist attacks against the United States. *

Designated by:

Australia, Canada, Egypt, EU, Israel, Japan, Jordan, New Zealand, United Kingdom, United States

Harboring Terrorist Leaders and Financiers

Assad Ahmad Barakat Former Chief of Hezbollah’s Military and Fundraising Operations in the TBA


Hatem Barakat Hezbollah Financier


Sohbi Mahmoud Fayad

Sohbi Mahmoud Fayad Hezbollah Financier

  • Resided in the TBA in the 1990s, where he served as a senior Hezbollah official and operated a Hezbollah financial network. *
  • Served as a liaison between the Iranian embassy and the Hezbollah community in the TBA, and took trips to Lebanon and Iran to meet with Hezbollah leaders. *
  • Sent more than $3.5 million to Hezbollah’s "Martyr" Organization, which provides care to children whose parents were killed serving Hezbollah. *
  • Arrested by Paraguayan authorities in 1998 and 1999 for observing the U.S. embassy in Asunción. He was released the first time after cooperating with authorities and again the second time after authorities failed to gather sufficient evidence to charge him. *
  • Arrested at the U.S.-designated Galería Page shopping center in Ciudad del Este on November 8, 2001, on charges related to his association with Hezbollah. He was imprisoned the following year on tax evasion charges. *
  • Designated as a Specially Designated Global Terrorist by the U.S. Department of the Treasury on December 6, 2006. *
  • Released from Paraguayan custody in 2009. *
  • Reportedly made trips in 2015, 2016, and 2017 from the TBA to Iraq, Lebanon, and Saudi Arabia on a valid Paraguayan passport. *

Mohammed Tarabain Chamas

Mohammed Tarabain Chamas Administrator of the U.S.-Designated Shopping Uniamérica


Mohammed Fayez Barakat

Mohammed Fayez Barakat Hezbollah Financier


Ali Muhammad Kazan

Ali Muhammad Kazan Leader of Hezbollah in the TBA


Muhammad Yusif Abdallah

Muhammad Yusif Abdallah Senior Hezbollah Leader and Fundraiser

Terrorist Entities in Paraguay

Shopping Uniamérica (Galería Page):

Snapshot of Paraguayan Counterterrorism Legislation and Initiatives

Paraguay’s government is not well-equipped to deal with terrorism. Widespread government corruption and loopholes in domestic policy enable illicit activity to continue. Over 90 percent of Paraguay’s police are reportedly corrupt. Corrupt politicians also work with drug cartels in the TBA, which in turn give support to the terrorist groups that operate there. * The funds generated from Paraguay’s illicit tobacco trade have also reportedly been used to fund terrorist groups in the TBA, including al-Qaeda and Hezbollah. One of the country’s principal sources of illegal tobacco exports is a tobacco company owned by Horacio Cartés, Paraguay’s president from 2013 to 2018. *

Law No. 4024 [2010]: Enacted in June 2010, Paraguay’s counterterrorism law criminalized acts of terrorism, the financing of terrorism, and the act of associating with a terrorist group. The law lists seven offenses criminalized in previous legislation that may constitute terrorist acts if committed with the intention to inflict terror or to coerce individuals, governments, or international organizations into carrying out an act. *

Law No. 4568 [2013]: Enacted in August 2013, the Law of National Defense and Internal Security––commonly known as the Militarization Law––permits the deployment of military forces to help the police in national security situations of "extreme gravity." * The law was enacted so that a joint military and police task force called La Fuerza de Tarea Conjunta (FTC) could be deployed to northern Paraguay to combat the Paraguayan People’s Army (EPP), a Marxist-Leninist insurgent group. *

Law No. 5241 [2016]: Enacted in August 2014, Law No. 5241 formally established the country’s first intelligence body, the Sistema Nacional de Intelligencia (SINAI). Its objective is to detect and counteract the activities of terrorist and criminal organizations. *

Policy Prescriptions

In order to better combat terrorism and terrorist financing, Paraguay will need to combat the corruption in its government and law enforcement agencies and close loopholes in its domestic political framework so that it can fully enforce its existing counterterrorism and AML/CTF policies. Paraguay will need to acknowledge the presence of Hezbollah and other internationally sanctioned terrorist groups in the country and proactively apply its counterterrorism legislation to combat their activities.

Specifically, CEP calls upon Paraguay to:

  • Acknowledge the presence of terrorist organizations, including Hezbollah, al-Qaeda, and Hamas, in Paraguay.
  • Clarify the Paraguayan government’s positions on Hezbollah, al-Qaeda, and Hamas, as well as Paraguayan actions to limit their operations in the country.
  • Draft, publicize, and maintain a list of designated terrorist entities.
  • Submit designated entities and individuals affiliated with those entities to the ramifications outlined in Paraguay’s existing counterterrorism legislation.
  • Revoke the citizenship of naturalized Paraguayan citizens involved with internationally sanctioned terrorist organizations.
  • Expel or arrest all members of internationally sanctioned terrorist organizations currently domiciled inside Paraguay.
  • Clarify the status of internationally sanctioned terrorist operatives who have been reportedly released from Paraguayan custody, including Assad Ahmad Barakat, Hatem Barakat, and Sohbi Mahmoud Fayad.
  • Sanction and suspend operations of the U.S.-designated Shopping Uniamérica shopping center (previously known as Galería Page), which continues to serve as Hezbollah’s de facto headquarters in the TBA.
  • Revise its domestic political framework to close any loopholes that enable illicit activity.
  • Combat corruption and prosecute corrupt individuals in Paraguay’s government and law enforcement agencies.