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
- Resided in Ciudad del Este since the early 1990s, where he co-owned what later became U.S.-designated businesses with his brothers Hatem and Hamza and ran Hezbollah’s fundraising network in the TBA. *
- Took part in the planning and financing of the 1994 bombing of the AMIA Jewish Community Center in Buenos Aires, Argentina. *
- Charged by Paraguay with tax evasion, criminal association, and criminal abetment in 2001. *
- Extradited to Paraguay to serve a prison sentence in 2002 after being arrested by Brazilian authorities. *
- Designated as a Specially Designated Global Terrorist by the U.S. Department of the Treasury on June 10, 2004. *
- Released from Paraguayan custody in 2009. *
- Arrested in September 2018 by Brazilian police. He is wanted in Paraguay for identity theft and in Argentina for money laundering. *
- Extradited to Paraguay in July 2020. *
Hatem Barakat
Hezbollah Financier
- Resided in Ciudad del Este since the early 1990s, where he co-owned what later became U.S.-designated businesses with his brothers Assad and Hamza and became part of a network of Hezbollah financiers in the TBA. *
- Linked to operatives involved in the 1994 bombing of the AMIA Jewish community center in Buenos Aires, Argentina. *
- Designated as a Specially Designated Global Terrorist by the U.S. Department of the Treasury on December 6, 2006. *
- As of 2006, held a Paraguayan passport. *
- Charged by Paraguay with document falsification in 2005. * He was convicted and sentenced to six years in prison in June 2006. *
- Barakat has since been released from Paraguayan custody. His Facebook profile suggests that he currently resides in Brazil. *
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
Administrator of the U.S.-Designated Shopping Uniamérica
- Operates in Ciudad del Este as the administrator of the U.S.-designated Shopping Uniamérica shopping center (previously known as Galería Page), which reportedly serves as a "regional command post" for Hezbollah. * Has transferred funds to Hezbollah. *
- Provided Hezbollah with security information on residents in the TBA as part of the group’s counterintelligence operations. *
- Served as private secretary for senior Hezbollah leader Muhammad Yusif Abdallah. *
- Designated as a Specially Designated Global Terrorist by the U.S. Department of the Treasury on December 6, 2006. *
- As of 2006, held Paraguayan citizenship. *
- Continues to reside in Ciudad del Este, where he has reportedly been appointed administrator of another shopping center. *
Mohammed Fayez Barakat
Hezbollah Financier
- Operates in the TBA, from where he has fundraised for Hezbollah and transferred funds to the group. *
- Designated as a Specially Designated Global Terrorist by the U.S. Department of the Treasury on December 6, 2006. *
- As of 2006, held Paraguayan citizenship. *
- Reportedly kidnapped by an undetermined group of individuals for 20 days in March 2007. He was allegedly transferred from Brazil to Paraguay in the trunk of a vehicle, which went completely undetected by border authorities. *
- Investigated by Paraguayan authorities for suspicious money transfers in 2008, but was never prosecuted. *
- Continues to own a business called Big Boss International Import Export, which is located inside the Shopping Uniamérica shopping center (previously known as Galería Page) in Ciudad del Este. *
Ali Muhammad Kazan
Leader of Hezbollah in the TBA
- Reportedly succeeded Assad Ahmad Barakat as the leader of Hezbollah in the TBA. Also served as a counterintelligence official for the group. *
- As of August 2006, helped to raise more than $500,000 for Hezbollah. *
- Designated as a Specially Designated Global Terrorist by the U.S. Department of the Treasury on December 6, 2006. *
- As of 2006, held a Paraguayan passport. *
Muhammad Yusif Abdallah
Senior Hezbollah Leader and Fundraiser
- Has served as a senior Hezbollah leader in the TBA and as a courier of funds for the group. *
- Reportedly provided false passports and other logistical support to the perpetrators of the 1994 bombing of the AMIA Jewish community center in Buenos Aires. *
- Served as the owner and manager of the U.S.-designated Galería Page shopping center (today known as Shopping Uniamérica) in Ciudad del Este. * Has also been involved in illicit financial activities, including the import of contraband and credit card fraud. *
- Designated as a Specially Designated Global Terrorist by the U.S. Department of the Treasury on December 6, 2006. *
- As of 2006, held a Paraguayan passport. *
Terrorist Entities in Paraguay
Shopping Uniamérica (Galería Page):
- Shopping center in Ciudad del Este that reportedly serves as a "regional command post" and "central headquarters" for Hezbollah in the TBA. It is managed and owned by Hezbollah members. The businesses there are operated by Hezbollah members and used to generate funds for the group. *
- Designated as a Specially Designated Terrorist Entity by the U.S. Department of the Treasury on December 6, 2006. *
- Renamed Shopping Uniamérica and remains functional as of 2017. *
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.