Financial Crime World

Paraguay’s Challenges: Organized Crime, Corruption, and Governance

Organized Crime

Paraguay is grappling with a severe problem of organized crime, particularly in the Tri-Border Area (TBA) shared with Brazil and Argentina. This region has become a major hub for money laundering and terrorist financing.

  • Smuggling and Illicit Activities: Criminal groups dominate the smuggling of goods across borders, including cigarettes, drugs, and arms.
  • Infiltration of Government and Security Agencies: These groups have infiltrated the government and security agencies, making it difficult to combat them effectively.

Corruption

Corruption is widespread in Paraguay, with high-level politicians and officials involved in organized crime and money laundering. The country has a poor legal framework for access to information and a high level of perceived corruption.

  • Impunity: Impunity is rampant, with many cases of embezzlement, tax evasion, and other crimes going unpunished.
  • Poor Governance: Paraguay’s political leadership and governance are major concerns, with actors from both main political parties involved in organized crime and corruption.

Governance

The government has failed to protect victims and witnesses, including children who have been trafficked. Journalists and media workers face threats and attacks, with some killed as a result.

  • Human Rights Defenders: Despite efforts to improve victim support and protection, several high-profile cases have demonstrated the government’s failure to protect victims and witnesses.
  • Attack on Media Workers: Public servants have perpetrated more than half of the attacks on journalists.

Economic and Financial Environment

Paraguay is a high-risk country for money laundering and terrorist financing. Criminals are using the country to launder illicit money through real estate, cattle ranches, and other assets. The economic regulatory environment in Paraguay is rife with organized crime, including money laundering and arms trafficking.

  • Money Laundering: The country’s financial system lacks effective regulations and oversight, making it an attractive destination for criminals seeking to launder their illicit gains.
  • Arms Trafficking: Paraguay’s borders are vulnerable to smuggling, including the trafficking of arms and explosives.

Civil Society and Social Protection

Despite efforts to improve victim support and protection, several high-profile cases have demonstrated the government’s failure to protect victims and witnesses. Journalists and human rights defenders face threats and attacks, with some killed as a result.

  • Victim Support: The government has failed to provide adequate support and protection for victims of organized crime and corruption.
  • Media Freedom: Journalists and media workers face significant challenges in reporting on sensitive topics, including corruption and organized crime.