U.S. Department of State Country Reports on Terrorism 2004 - Triborder Area (Argentina, Brazil, and Paraguay)

The countries of the Triborder Area (TBA) – Argentina, Brazil, and Paraguay – have long been concerned about the pervasiveness of transnational crime in the region where the three nations converge. In the early 1990s, the countries established a mechanism for addressing jointly arms and drug trafficking, contraband smuggling, document and currency fraud, money laundering, and the manufacture and movement of pirated goods. In 2002, at their invitation, the United States joined them in a consultative mechanism – the "Three Plus One" Group on Triborder Area Security – to strengthen the capabilities to fight cross-border crime and thwart money laundering and terrorist fundraising activities. The United States remains concerned that Hizballah and HAMAS raise funds among the sizable Muslim communities in the region, and that the high incidence of illicit activity could tempt terrorist groups to seek to establish safe havens in this largely uncontrolled area. Persons suspected of ties to terrorist groups have been spotted in the TBA, but no operational activities of terrorism have been detected.

In December 2004, the United States hosted the fourth high-level meeting of the "Three Plus One," at which the partners exchanged views on measures taken and progress confronting the region's security challenges. Argentina, Brazil, and Paraguay agreed to develop guidelines for detecting and monitoring potentially illegal flights in the TBA, to exchange information on cargo flights, and to explore the feasibility of conducting joint patrols on Iguacu waterways. They also agreed to meet in 2005 to strengthen institutional ties among prosecutors, to consider integrated border and customs controls, to enhance cooperation among their financial analysis units, and to begin looking at charities to prevent their abuse of fundraising. Brazil announced the creation of a Regional Intelligence Center in Foz do Iguacu, and Argentina and Paraguay committed to designate liaisons to it. The parties agreed to continue to work among themselves and with the United States to confront transnational crime and continue to deny the TBA to terrorists.

Individually, the TBA countries maintained strong stances against international terrorism. Argentina continued to cooperate with the United Nations, the OAS, its neighbors, and the United States on a number of counterterrorism initiatives. Argentine security forces have been especially vigilant in monitoring illicit activity and its potential links to Islamic radical groups in the TBA. There is no credible evidence that operational Islamic terrorist cells exist in Argentina. Argentina maintains a leading role in the OAS Inter-American Committee Against Terrorism (CICTE), established on Argentina's initiative in the 1990s.

There were no significant acts of international terrorism in Argentina in 2004. In November, small explosive devices set to detonate after hours at three foreign bank branches (one US) killed a security guard and injured a policeman. No group has claimed responsibility. In September, a three-judge panel acquitted all 22 Argentine defendants charged in connection with the 1994 terrorist bombing of the Buenos Aires Jewish Community Center, in which at least 85 persons were killed. The panel faulted the investigation of the original judge and prosecutors and called for an investigation of their handling of the case and trial. An Argentine criminal court judge reconfirmed the validity of international arrest warrants against 12 Iranian nationals, including diplomats stationed in Buenos Aires in 1994, and one Lebanese official believed to head Hizballah's terrorist wing. There were no new developments in the investigation of the 1992 bombing of the Israeli Embassy, in which at least 29 persons were killed.

Draft legislation to criminalize terrorist financing introduced in the Argentine Chamber of Deputies in 2003 remained stalled through 2004. The draft provides penalties for violations of international conventions, including the UN's Convention for the Suppression of the Financing of Terrorism. Argentina's lower legislative chamber will consider the new legislation once it ratifies the UN pact, as well as the Inter-American Convention Against Terrorism.

Argentine executive branch officials and the Central Bank continued to be extremely cooperative in 2004, responding quickly and effectively to ensure that the assets of terrorist groups identified by the United States or the UN would be frozen if detected in Argentine financial institutions. New regulations require travelers to report the cross-border transport of currency in excess of $10,000, whether inbound or outbound and the country is establishing an automated entry/exit system at ports of entry.

Brazil continues to extend practical and effective support for US counterterrorism efforts on all fronts, including intelligence, law enforcement, and finance. There were no international terrorism incidents of significance in Brazil in 2004, and no credible evidence of the existence of operational terrorist cells. The United States remained concerned about the possible use of Brazilian territory for transit by terrorists using established illegal migrant smuggling groups or for fundraising for terrorist groups.

In May 2004, the Government of Brazil created a technical team from five key ministries and the Armed Forces to formulate a national policy to combat terrorism. The group's recommendations are intended as the basis of a bill to establish a national authority for combating terrorism. By the end of 2004, however, the administration of President Lula da Silva had yet to submit a bill to the legislature. Also awaiting legislative action were a bill introduced in 2003 aimed at preventing terrorist attacks on Brazil's cyber infrastructure and measures to update Brazil's money laundering law that dates back to 1978. There are no significant impediments to the prosecution or extradition of suspected terrorists by Brazil, although Brazil's legal procedures can be protracted.

Brazil is increasingly capable of monitoring domestic financial operations and effectively utilizes its Financial Activities Oversight Council (COAF, in Portuguese) to identify possible funding sources for terrorist groups. The United States recently provided assistance and training to COAF to upgrade its database and data collection mechanism. In January 2005, the Brazilian Federal Police will inaugurate a regional field office in Foz do Iguacu to coordinate its law enforcement efforts in the TBA.

Paraguay has cooperated in the global war against terrorism by actively supporting counterterrorism initiatives at the UN and the OAS. In December 2004, at the fourth meeting of the "Three Plus One", Paraguay offered to host a conference of TBA financial intelligence units in the first half of 2005.

In September 2004, Cecilia Cubas, the daughter of a former president of Paraguay, was abducted and subsequently murdered. The Paraguayan Government charged, credibly, that what appeared as a kidnap for profit gone awry was really the work of a radical leftist group with possible ties to the Revolutionary Armed Forces of Colombia (FARC).

Paraguay remained vigilant throughout 2004 against extremists seeking to raise funds among Paraguay's Muslim community for terrorist activities outside Paraguay. There was no credible evidence of operational Islamic terrorist cells in Paraguay.

The executive branch's strong political will to combat terrorism notwithstanding, the Government remained hampered by weak or non-existent legislation and by limited law enforcement and intelligence capabilities. In particular, Paraguay lacks an antiterrorism law that would afford authorities the special powers needed to investigate and prosecute terrorism-related crimes. Lacking such a law, and adequate money laundering legislation, the Government is only able to prosecute suspected terrorist financiers for tax evasion or other crimes. To address these deficiencies, the Government in 2004 prepared for consideration by the legislature draft legislation to strengthen Paraguay's anti-money laundering regime and an antiterrorism bill that would outlaw support for terrorists. Both need to be adopted by the legislature. These initiatives are key to Paraguay meeting its international counterterrorism obligations as set forth in UN Security Council Resolutions.

Despite the lack of specific antiterrorist statutes, Paraguay has actively prosecuted suspected terrorist fundraisers under other statutes. Hizballah fundraisers Sobhi Fayad and Ali Nizar Dahroug were sentenced to lengthy prison terms in November 2002 and August 2003, respectively, for tax evasion. A major accomplishment in 2004 was the successful prosecution and conviction in May of Hizballah fundraiser Assad Ahmad Barakat on charges of tax evasion, following his extradition from Brazil. He was sentenced to six and one-half years. The Government is considering additional charges of bank fraud, pending concurrence by Brazil. (The terms of the Paraguay-Brazil extradition treaty prohibit prosecution of extradited suspects on charges other than those that were the basis for extradition.) Separately, in March Paraguay opened a case of tax evasion against a money exchange house and 46 individuals suspected of involvement in money laundering. In August, Paraguay brought charges of document fraud against Barakat's brother Hatem Barakat, also a suspected terrorist financier. Paraguay's antiterrorist police Secretariat for the Prevention of International Terrorism (SEPRINTE) continued to provide excellent support in these and other investigations.