U.S. State Department Trains Judicial Officials from Argentina, Brazil and Paraguay in Anti-Money Laundering Tactics

June 2nd, 2017 | Alex Caro

Washington D.C.
June 1, 2017

Training to Combat Growing Money Laundering Activities Funding Global Terrorism

The U.S. Department of State recently completed two Anti-Money Laundering (AML) and Asset Forfeiture courses consisting of 40 judges and 40 prosecutors from Argentina, Brazil and Paraguay. The department’s law enforcement arm, the Bureau of International Narcotics and Law Enforcement Affairs (INL), hired the global law enforcement and security training firm, Torres Advanced Enterprise Solutions (Torres), of Falls Church, Virginia, to conduct the training in Ciudad del Este, Paraguay. These two courses follow Torres’s successful completion of its police officer and prison guard training program in Paraguay, and will be followed next month by a week-long course for police investigators from the same three countries that teach best practices and procedures for conducting AML investigations. Judicial and law enforcement agencies from Argentina, Brazil and Paraguay have little experience investigating and prosecuting money laundering crimes, which have known to have links to terrorist financing, drug trafficking and other transnational criminal activities and which have generally, until now, found a safe haven in the Tri-Border region.

Ciudad del Este is located at the center of the infamous Tri-Border region where the borders of Argentina, Brazil and Paraguay join. The Library of Congress Federal Research Division estimates that Ciudad del Este generates between US$12 and US$13 billion in cash transactions annually, ranking it the third city worldwide behind Hong Kong and Miami. It is estimated that Islamist fundamentalist groups in the Tri-Border region and similar areas in Latin America send between US$300 million and US$500 million a year in profits from drug trafficking, arms dealing and other illegal activities, including money laundering, contraband trafficking and product piracy, to radical Islamic groups in the Middle East.

Ciudad del Este has the largest Arab population in the Western Hemisphere and is a financial safe haven where illegal money is laundered by terrorist groups and mafias. The most renowned are Hamas, Hezbollah and Al Qaeda; the Lebanese and Hong Kong mafias; and lesser-known mafias from Chile, China, Corsica, Libya, Italy, Lebanon, Chechnya and Taiwan. The Hong Kong mafia is particularly active in large-scale trafficking of counterfeit products from mainland China to Ciudad del Este and maintains strong ties with Hezbollah in the Tri-Border area. Unspecified Chinese mafias in the region area are also reportedly seeking to expand into Argentina in order to establish themselves in the duty-free zone of San Luis Province. At least two Chinese mafia groups in the Tri-Border region, the Sung-I and Ming families, engage in illegal operations with the Egyptian Islamic group Al-jamāʻah al-islāmīyah. The Fuerzas Armadas Revolucionarias de Colombia (FARC) and the Ejército del Pueblo Paraguayo (EPP) of Paraguay are also expanding their influence within the Tri-Border region to increase cocaine trafficking into Brazil, Argentina and Paraguay and to launder proceeds within Ciudad del Este.

Headquarters of the Private Security Company Prosegur in Ciudad del Este, which was attacked by a Brazilian gang that stole US$40 Million in April 2017.

Terrorist and mafia groups also use the expansive, porous borders between the three countries to traffic illegal contraband into the United States and into Europe via Spain, mostly consisting of arms, high-end counterfeited clothing, accessories and watches, and one of their largest cash earners, American brand cigarettes such as Marlboro and Salem. These groups also purchase cheap contraband products from China and traffic them throughout the Americas via the maritime ports of Buenos Aires and Sao Paulo to Miami and New York and into Spain. According to a Paraguayan Air Force official, in October 2016 Paraguayan customs seized an unmarked Boeing 747 Jumbo Jet loaded with contraband that originated in China at the international airport in Ciudad del Este where it still remains today. The absence of asset forfeiture laws prevents Paraguayan authorities from selling the plane and its contents, which could be used as funds for anti-terrorism and counter-narcotics operations.

According to Paraguayan National Police (PNP) officials, cocaine is a growing source of income for the EPP, who use production and trafficking methods taught to them by the Colombian FARC. Within the past year, PNP anti-narcotics operations have detected and seized a record number of illegal clandestine cocaine labs along the borders between Paraguay, Brazil and Argentina. The U.S. Drug Enforcement Administration (DEA) recently trained the PNP in counter-narcotics operations, resulting in several clandestine lab takedowns. The PNP will be further trained by Torres in anti-clandestine lab operations later this year. The EPP also uses kidnapping and ransom learned through the FARC as another source of money to fund its terrorist activities. Kidnapping was a major source of income for the FARC before they took over the cocaine business in Colombia.

Terrorists and mafias have historically kept Ciudad del Este relatively free of violence in order to maintain a low profile from intelligence and law enforcement agencies. Today, however, the EPP, supported by the FARC and local mafias, is waging war in order to get their share of the illegal money flowing into the region. On April 25, 2017, a Brazilian gang was blamed for a robbery in which a Paraguayan police officer was killed and US$40 million was stolen from the armored car company Prosegur. The gang used explosives and burned vehicles to prevent police from responding to the attack. According to a PNP spokesman, the attack had characteristics similar to those of the FARC and terrorist groups in the Middle East. The PNP has also recently been peppered with attacks by the EPP and gangs throughout the region, resulting in the largest number of police deaths in decades. In a single 2016 attack, the EPP used AK-47 assault rifles that caught police in a cross-fire that killed six officers.

Distinguished guests at the Anti-Money Laundering and Asset Forfeiture courses included the President and Vice President of the Paraguayan Supreme Court, the Secretary of the Paraguayan Drug Enforcement Agency and several Federal Magistrate Judges from Argentina, Brazil and Paraguay.