TERRORIST AND ORGANIZED CRIME GROUPS IN THE 

TRI-BORDER AREA (TBA) OF SOUTH AMERICA 

A Report Prepared by the Federal Research Division, 

Library of Congress 

under an Interagency Agreement with the 

Crime and Narcotics Center 

Director of Central Intelligence 

July 2003 

(Revised December 2010) 

 Author: Rex Hudson 

 Project Manager: Glenn Curtis 

 Federal Research Division

 Library of Congress

Washington, D.C. 205404840

 Tel: 2027073900 

 Fax: 2027073920 

 E-Mail: frds@loc.gov 

 Homepage: http://loc.gov/rr/frd/ 

p 55 Years of Service to the Federal Government p 

1948 – 2003
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

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PREFACE 

This report assesses the activities of organized crime groups, terrorist groups, and 

narcotics traffickers in general in the Tri-Border Area (TBA) of Argentina, Brazil, and Paraguay, 

focusing mainly on the period since 1999. Some of the related topics discussed, such as 

governmental and police corruption and anti–money-laundering laws, may also apply in part to 

the three TBA countries in general in addition to the TBA. This is unavoidable because the TBA 

cannot be discussed entirely as an isolated entity. 

Based entirely on open sources, this assessment has made extensive use of books, journal 

articles, and other reports available in the Library of Congress collections. It is based in part on 

the author’s earlier research paper entitled “Narcotics-Funded Terrorist/Extremist Groups in 

Latin America” (May 2002). It has also made extensive use of sources available on the Internet, 

including Argentine, Brazilian, and Paraguayan newspaper articles. One of the most relevant 

Spanish-language sources used for this assessment was Mariano César Bartolomé’s paper 

entitled Amenazas a la seguridad de los estados: La triple frontera como ‘área gris’ en el cono 

sur americano [Threats to the Security of States: The Triborder as a ‘Grey Area’ in the Southern 

Cone of South America] (2001). The selective bibliography includes books, journal articles, and 

other reports. Newspaper and magazine articles are footnoted. This report also includes an 

appendix containing brief profiles of five alleged operatives of Islamic fundamentalist groups in 

the TBA and a diagram of drug-trafficking routes in the region. 

The information cutoff date used in this report is July 2003. Thus, it lacks any updated 

information about the individuals discussed in it. However, the study has been partially edited as 

of November 2010 to reflect the fact that Rajkumar Sabnani or Rajkumar Naraindas Sabnani, 

whose alleged fund-raising or money laundering on behalf of TBA extremists was reported in the 

original edition, has been completely exonerated of any involvement. Sabnani is a prominent and 

respected businessman residing in Hong Kong. Moreover, criminal proceedings against 

Sabnani’s relatives and employees in Paraguay were officially closed, and all parties were 

acquitted and absolved of any guilt or punishment in July 2007. Therefore, the information about 

Sabnani and his associates has been removed from this version of the study. 
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TABLE OF CONTENTS 

PREFACE........................................................................................................................................ i 

EXECUTIVE SUMMARY .............................................................................................................1 

Islamic Terrorist Groups and Activities in the Tri-Border Area (TBA)....................................1 

Organized Crime Groups and Activities in the TBA.................................................................2 

Efforts to Counter the Use of the TBA by Organized Crime and Terrorist Groups..................3 

INTRODUCTION ...........................................................................................................................4 

GEOGRAPHY, SOCIETY, AND ECONOMY ..............................................................................6 

Geography..................................................................................................................................6 

Ciudad del Este....................................................................................................................6 

Foz do Iguaçu ......................................................................................................................7 

Puerto Iguazú.......................................................................................................................7 

Society........................................................................................................................................8 

The General Population of the TBA.....................................................................................8 

Muslim Population...............................................................................................................9 

Economy ..................................................................................................................................10 

ILLICIT ACTIVITIES BY ISLAMIC TERRORIST GROUPS IN THE TBA............................12 

Background..............................................................................................................................12 

The Islamic Terrorist Presence in the TBA, 1999-June 2003..................................................14 

Terrorist Fund-Raising in the TBA..........................................................................................24 

Narcotics Trafficking .........................................................................................................24 

Other Fund-Raising Activities...........................................................................................26 

TBA-Related Violence Against Local Officials......................................................................31 

Clandestine Terrorist Communications in the TBA ................................................................32 

TBA-Linked Islamic Terrorist Activities Elsewhere in the Southern Cone............................34 

Chuy, Uruguay, and Chuí, Brazil ......................................................................................35 

Iquique, Chile.....................................................................................................................36 

OTHER ORGANIZED CRIME ACTIVITIES IN THE TBA ......................................................37 

Indigenous Organized Crime Groups ......................................................................................38 

Argentina............................................................................................................................38 

Paraguay............................................................................................................................39 

Non-Indigenous Organized Crime Groups ..............................................................................40 

The Chinese........................................................................................................................40 

The Colombians.................................................................................................................45 

The Russians ......................................................................................................................46 

TBA-Related Governmental Corruption..................................................................................47 

Argentina............................................................................................................................47 

Brazil..................................................................................................................................47 

Paraguay............................................................................................................................48 

Money Laundering...................................................................................................................50 
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TBA in General ..................................................................................................................50 

Ciudad del Este..................................................................................................................52 

Foz do Iguaçu ....................................................................................................................53 

Other Organized Crime Activities in the TBA ........................................................................55 

Automobile Smuggling.......................................................................................................55 

Counterfeiting and Piracy of Products..............................................................................57 

Argentina and Brazil....................................................................................................57 

Paraguay.......................................................................................................................57 

Internet Crime....................................................................................................................59 

COMBATING ORGANIZED CRIME AND TERRORIST GROUPS IN THE TBA .................60 

Security Forces.........................................................................................................................60 

Argentina............................................................................................................................60 

Brazil..................................................................................................................................63 

Paraguay............................................................................................................................65 

The TBA’s Immigration Control Problem...............................................................................66 

CONCLUDING POINTS ..............................................................................................................68 

The TBA as a Haven and Base for Islamic Terrorist Groups..................................................68 

The TBA as a Center for Organized Crime .............................................................................68 

Efforts to Counter Organized Crime and Terrorism in the TBA.............................................69 

APPENDIX....................................................................................................................................71 

Alleged Operatives of Islamic Fundamentalist Groups in the TBA........................................71 

Barakat, Assad Ahmad Mohamad (Hizballah)..................................................................71 

Fayad, Sobhi Mahmoud (Hizballah)..................................................................................72 

Mehri, Ali Khalil (Hizballah).............................................................................................74 

Mukhlis, El Said Hassan Ali Mohamed (al-Gama’a al-Islamiyya)...................................75 

al-Qadi, Marwan ‘Adnan (“Marwan al-Safadi”) (Hizballah)..........................................77 

SELECTIVE BIBLIOGRAPHY ...................................................................................................79 

Figures 

Figure 1. Drug-Trafficking Routes in the Tri-Border Area ...........................................................46 

Figure 2. The FARC’s Havens in Brazil........................................................................................56

Figure 3. Tri-Border Area and Key Roads Leading to It from Major Cities.................................78 

Table 

Table 1. Amounts of Money Reported Laundered in the Tri-Border Area (TBA), 1992-2001 ....51 
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EXECUTIVE SUMMARY 

Islamic Terrorist Groups and Activities in the Tri-Border Area (TBA) 

This review of the available open-source information on Islamic terrorist group activities 

in Tri-Border Area (TBA) during the 1999 to 2003 period provides substantial evidence for 

concluding that various Islamic terrorist groups have used the TBA—where Argentina, Brazil, 

and Paraguay meet—as a haven for fund-raising, recruiting, plotting terrorist attacks elsewhere 

in the TBA countries or the Americas in general, and other such activities. Islamic terrorist 

groups with a presence in the TBA reportedly include Egypt’s Al-Gama’a al-Islamiyya (Islamic 

Group) and Al-Jihad (Islamic Jihad), al Qaeda, Hamas, Hizballah, and al-Muqawamah (the 

Resistance; also spelled al-Moqawama), which is a pro-Iran wing of the Lebanon-based 

Hizballah. Islamic terrorist groups have used the TBA for fund-raising, drug trafficking, money 

laundering, plotting, and other activities in support of their organizations. The large Arab 

community in the TBA is highly conducive to the establishment of sleeper cells of Islamic 

terrorists, including Hizballah and al Qaeda. Nevertheless, as many as 11,000 members of the 

Islamic community in the TBA may have moved since late 2001 to other less closely watched 

Arab population centers in South America. 

Hizballah clearly derives a quite substantial amount of income from its various illicit 

activities in the TBA, in addition to financial support from the government of Iran and income 

derived from narcotics trafficking in Lebanon’s Al Beqa’a Valley. Reports of Iranian intelligence 

agents being implicated in Hizballah-linked activities in the TBA since the early 1990s suggest 

direct Iranian government support of Hizballah activities in the region. Lebanese government 

political support of the sizeable Lebanese community in the TBA extends to Hizballah members 

in the region because of Hizballah’s influence in Lebanon’s politics and society. 

News media reports in recent years of al Qaeda’s presence in the TBA and of cooperation 

between Hizballah and al Qaeda in the region first surfaced in mid-1999, based on reported 

identification of al Qaeda operatives in the TBA by Argentine intelligence. The conventional 

thinking is that the Sunni-oriented al Qaeda and the Shi’ite-oriented Hizballah would never 

cooperate, but it seems more likely that the reported cooperation is emblematic of a larger 
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strategic alliance between the two organizations.1 News media reports since 1999 of foiled 

terrorist plots against U.S. embassies and the arrest of several terrorists linked to al Qaeda—

including Ali Khalil Mehri, El Said Hassan Ali Mohammed Mukhlis, Marwan ‘Adnan al-Qadi 

(“Marwan al-Safadi”), and Mohamed Ali Aboul-Ezz Al-Mahdi Ibrahim Soliman (also spelled 

Mohamad Ali Abao-Ezz El-Mahdi Ibrahim Suliman)—suggest that al Qaeda has a presence in 

the region. Al Qaeda may have begun to establish a network in the TBA when Osama bin Laden 

and Khalid Sheikh Mohammed reportedly visited the area in 1995. Al Qaeda’s activities in the 

TBA are reportedly linked to trafficking of arms, drugs, and uranium, as well as money 

laundering, in association with Chinese and Russian (Chechen) mafias. 

If a Cable News Network (CNN) report is correct that an Islamic terrorist summit was 

held in the TBA in late 2002 to plan terrorist attacks against U.S. and Israeli diplomatic facilities 

in the South American region, then attacking these targets would appear to be a high priority for 

al Qaeda, Hizballah, and other Islamic terrorist groups that may have a presence in the TBA. 

Plotting by TBA-based terrorists linked to Hizballah and al Qaeda to blow up the U.S. Embassy 

in Asunción began in 1996. The embassy most likely remains one of the primary U.S. targets of 

Islamic terrorist groups in the region. In 2000-01, TBA-based al Qaeda operatives expanded their 

targeting to include the U.S. and Israeli embassies in Asunción and the U.S. embassies in 

Montevideo and Quito (Israel closed its embassy in Asunción in early 2002). The pattern of these 

foiled plots strongly suggests that TBA-based Hizballah and/or al Qaeda operatives will again 

attempt to carry out simultaneous terrorist attacks against two or more U.S. embassies or 

consulates in South America. Targets could also include hotels, tourism centers, airports, or 

multinational companies, especially those of Israeli, German, French, or U.S. origin.2

Organized Crime Groups and Activities in the TBA 

In addition to Islamic terrorist groups, the TBA provides a haven that is geographically, 

socially, economically, and politically highly conducive for allowing organized crime and the 

1

 Hisham al-Qarawi, “Has Bin-Ladin Made An Alliance With Mughanniyah in Latin America?” Al-Arab alAlamiyah [London-based Libyan daily providing independent coverage of Arab and international issues with a 

strong pro-Libyan, Arab nationalist, and anti-United States editorial line], November 14, 2002, 2, as translated from 

the Arabic for FBIS, “Article Views Possibility of Al-Qa'ida-Hizballah Alliance in Latin America,” November 14, 

2002 (FBIS Document ID: GMP20021114000092). 

2

 María Luisa Mac Kay, Clarín staff, Clarín (Internet version-www), October 18, 2002, as translated by FBIS 

Document ID: LAP20021018000021, “Argentina Put on Heightened Security Alert in View of Potential Terrorist 

Attack,” October 18, 2002. 
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corrupt officials who accept their bribes or payoffs to operate in a symbiotic relationship that 

thrives on drug and arms trafficking, money laundering, and other lucrative criminal activities. 

As of 2001, money laundering in the TBA, aided by special CC-5 accounts for non-residents and 

other mechanisms, reportedly was averaging US$12 billion a year. Ciudad del Este and Foz do 

Iguaçu are the region’s principal money-laundering centers. Ciudad del Este was generating 

US$12 to US$13 billion in cash transactions annually, making it the third city worldwide behind 

Hong Kong and Miami. However, that figure may have fallen since then as a result of stricter 

Argentine and Brazilian customs systems. 

Numerous organized crime groups, including the Lebanese Mafia, are known to use the 

TBA for illicit activities such as smuggling, money laundering, and product piracy. Although it 

is unclear whether the Lebanese Mafia and Hizballah are basically synonymous or entirely 

separate entities, there is probably a close relationship between them. In any case, the Hizballah 

organization in the TBA is known to collaborate with various mafias, including the Hong Kong 

Mafia. 

Indigenous crime groups operating in the TBA include the Argentine, Brazilian, and 

Paraguayan mafias. Non-indigenous mafias operating in the TBA reportedly include syndicates 

from Chile, China, Colombia, Corsica, Ghana, Libya, Italy, Ivory Coast, Japan, Korea, Lebanon, 

Nigeria, Russia, and Taiwan. However, a review of open-source news media found information 

indicating activities mainly by the Chinese, Korean, Lebanese, and Taiwanese mafias. The 

thriving business of importing counterfeit Compact Disks (CDs) and CD-ROMs from Asia is 

linked to organized crime in Korea, Lebanon, Libya, and Taiwan. The Hong Kong Mafia is 

particularly active in large-scale trafficking of pirated products from mainland China to Ciudad 

del Este and maintains strong ties with Hizballah in the TBA. Unspecified Chinese mafias in the 

TBA are reportedly seeking to expand into Argentina in order to establish themselves into the 

duty-free zone of San Luis Province. At least two Chinese mafia groups in the TBA—the Sung-I 

and Ming families—engage in illegal operations with the Egyptian al-Gama’a al-Islamiyya 

(Islamic Group). 

Efforts to Counter the Use of the TBA by Organized Crime and Terrorist Groups 

Cooperative and individual national efforts of the Argentine, Brazilian, and Paraguayan 

security forces to fight illicit activities by organized crime and terrorist groups in the TBA appear 
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to have constrained these activities since late 2001, but by no means eliminated them. Their 

efforts have been hindered by endemic corruption within the police, criminal justice systems, and 

governments of the TBA countries; poor pay; inadequate training, equipment, funding, lawenforcement techniques, and penal codes; poor organization; human rights abuses; weak antimoney-laundering laws and enforcement thereof; and secrecy provisions of banking laws (with 

the exception of Paraguay, whose problem has more to do with not reporting suspicious financial 

activities). 

Map showing the Tri-Border Area in the circle. 

Source: Nuclear Threat Initiative (NTI), October 

2002, http://www.nti.org/e_research/e3_16b.html. 

INTRODUCTION 

Several free-trade Latin American 

areas with large Middle Eastern populations 

allow Islamic terrorist groups, organized crime 

mafias, and corrupt officials to thrive in a 

mutually beneficial, symbiotic relationship. 

These areas include Colombia’s Maicao, 

Venezuela’s Margarita Island, Chile’s Iquique, 

and the Tri-Border Area (TBA). This study 

focuses on the largest and most significant of 

these areas—the TBA, an enclave adjoining 

Argentina, Brazil, and Paraguay. 

Estimates of how much organized crime and corrupt officials profit from these duty-free 

zones are unavailable, but it is estimated that Islamic fundamentalist groups in the TBA and 

similar areas in Latin America are sending 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, and product piracy, to radical Islamic groups in the Middle East.3

 The 

TBA’s Islamic extremist support networks include, in addition to Margarita Island and Iquique, 

various other centers of Arab population in the region, such as the Paraguayan city of 

Encarnación, on the border with Argentina, and the Uruguayan town of Chuy, on the border with 

Brazil. 

 

3

 “U.S. General: Islamic Rebels Get Cash from Latin America Gangs,” Orlando Sentinel, March 10, 2003, A9, 

citing General James T. Hill, commander of the U.S. Southern Command in Miami. 
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Hizballah clerics and members of other violent Islamic groups reportedly began planting 

agents and recruiting sympathizers among Arab and Muslim immigrants in Latin America in the 

mid-1980s, at the height of the Lebanese civil war. Hizballah cells began to form in the TBA as a 

result of Hizballah proselytizing in the Lebanese communities. Islamic fundamentalist 

organizations such as the Islamic Resistance Movement (Harakat al-Muqawamah al-Islamiyya—

Hamas), Hizballah, and al-Gama’a al-Islamiyya (Islamic Group) actively use the TBA as a 

support base, and al Qaeda reportedly has been establishing a presence in the region since at least 

the mid-1990s. By mid-2000, an estimated 460 Hizballah operatives were thought to be living 

and working in the TBA.4

 Numerous Lebanese and Palestinian extremists arrived in the TBA 

from Colombia in October 2000.5

With the help of organized crime and corrupt officials, these Islamic terrorist 

organizations use the TBA to raise revenues through illicit activities that include drug- and arms 

trafficking, counterfeiting, money laundering, forging travel documents, and even pirating 

software and music. In addition, they provide haven and assistance to other terrorists transiting 

the region. Al Qaeda reportedly also does considerable fund-raising in Ciudad del Este.6

Suspected Hizballah terrorists have also used the TBA as a base for carrying out two 

major terrorist attacks in Buenos Aires in the early 1990s—one against the Israeli Embassy on 

March 17, 1992; and the other against a Jewish community center on July 18, 1994. Since the 

1994 attack, Islamic terrorists in the TBA have largely confined their activities to criminal fundraising and other activities in support of their terrorist organizations, including plotting terrorist 

actions to be carried out in other countries. 

This study has confirmed the likely close interrelation among Islamic terrorist fundraising and money-laundering activities, organized crime, and corruption of public officials in 

the TBA. All of the TBA’s terrorist and organized crime activities are facilitated by official 

corruption, which, in turn, is fueled by the profits of lucrative criminal activities, which are 

4

 Harris Whitbeck and Ingrid Arneson, “Terrorists Find Haven in South America,” CNN.com, November 8, 2001, 

http://www.cnn.com/2001/WORLD/americas/11/07/inv.terror.south. 5

 Their names, as published in the Paraguayan press, included: Abadia Abu Sakran, Ayman Taha, Baha El-Khatis, 

Samer Sweileh, Diban Abu Gamous, Asan Hamaida, Mohamed Minirouwi, Hamad Hamad, Ayman Abu Yin, Salah 

Tinme, Wael Nasser, Sharif Tahayna, Abbas Ouweiwi, Nasser Saha Ane, Muhammad Moussa Hassan Gadalah, 

Rafat Rahdan Salem Abio, Brahim Un-Karim Bani-Uda, Mahmud Zakar Rages Zatma Adnan, and Mahimud Jabber 

Alul. Bartolomé, 11, citing “Antiterroristas remiten las evidencias al fiscal” [Antiterrorists provide the judge with 

evidence], Noticias, December 5, 2000. 6

 Jeffrey Goldberg, “In the Party of God,” The New Yorker 79, no. 32 (October 28, 2002). 
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conducted like business enterprises by organized crime and terrorist groups. In effect, a mutually 

beneficial nexus exists among these three sectors. The TBA serves as a microcosm for 

examining this relationship. 

GEOGRAPHY, SOCIETY, AND ECONOMY 

Iguassú Falls 

Source: BBC Mundo.com, September 3, 

2002; photo: Convention and Visitors’ 

Bureau, Iguazú.

Geography

The TBA’s porous borders are defined by 

three closely grouped population centers, one in each 

of three countries: the Argentine city of Puerto 

Iguazú, the Brazilian city of Foz do Iguaçu, and the 

Paraguayan city of Ciudad del Este (formerly Puerto 

Presidente Stroessner). The region’s most famous 

landmark is Iguassú Falls (Port., Iguaçu Falls), which 

straddles the Argentina-Brazil border in Brazil’s 

Paraná State and Argentina’s Misiones Province. 

In the early 1970s, when Brazil and Paraguay 

were seeking to exploit the energy-generating and 

tourist potential of Iguassú Falls and to promote 

regional trade, government planners established a free-trade zone in the rapidly growing 

boomtown city of Ciudad del Este, thereby allowing Argentines and Brazilians to purchase cheap 

electronic products there.7 The TBA, with already more than half a million inhabitants, soon 

became a lawless jungle corner of Argentina, Brazil, and Paraguay. 

Ciudad del Este 

Ciudad del Este, located 330 kilometers to the east of Asunción, is the capital of 

Paraguay’s Upper Paraná Department and the country’s second-largest city. In 2003 Ciudad del 

Este had an estimated population of 239,500.8

 Strategically located, Ciudad del Este is situated 

 

7

 Sebastian Junger, “Terrorism's New Geography,” Vanity Fair, no. 508 (December 2002), 196, citing Brazilian 

journalist Jackson Lima. 

8

Stefan Helders, “Paraguay,” The World Gazetteer, 2003, http://www.world-gazetteer.com/c/c_py.htm#pl_37. 
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on the Pan American Highway, which runs from Asunción, Paraguay, to Curitiba, Brazil, located 

near the port of Paranaguá. 

Foz do Iguaçu 

 The tri-border countries can be seen from the landing at Puerto 

Iguazú: Argentina to the left, Brazil to the right, and Paraguay in the 

background. 

Source: Puerto Iguazú Prefecture. From Military Review, Command 

& General Staff College, March-April 2002.

The Brazilian city of Foz do Iguaçu (formerly spelled Foz do Iguassú), Paraná State, has 

been recently described in news media as having a population of about 300,000. (According to 

the 1996 census, its population was 231,627.9

) Many people leave Ciudad del Este at night and 

cross the 303-meter-long, concrete bridge, the Friendship International Bridge (Sp., Puente 

Internacional de la Amistad; or Port., Ponte Internacional da Amizade), to return to Foz do 

Iguaçu, where the quality of 

life is better than in Ciudad 

del Este. Nevertheless, 

violent crime is a serious 

problem in Foz do Iguaçu, 

where 180 homicides were 

reported in 2000, 243 in 

2001, and 275 in 2002.10 (By 

comparison, the number of 

homicides in the top-ranking 

U.S. city in 2002, 

Washington, D.C., with 

about 2 1⁄2 times the 

population, was 262.) 

Puerto Iguazú 

Argentina's Puerto Iguazú, with a population of approximately 29,000, is located at the 

confluence of the Paraná and Iguazú (Port., Iguassú) rivers in the northwest corner of Misiones 

 

9

 Demographia: Brasil [Brazil]: Cities (Municipalities) Over 100,000 Population: 1996, 

http://www.demographia.com/db-brasil-city96.htm. 

10 “Homicide Rate Declines in Foz do Iguaçu,” A Gazeta do Iguaçu [Foz do Iguaçu; independent, largest-circulation 

daily in the TBA; offers balanced reporting and daily editorial comment], citing data released by the Legal Medical 

Institute (IML), as translated by FBIS Document ID: LAP20030606000016, June 5, 2003. 
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Province. The Atlantic Ocean can be accessed from Puerto Iguazú using small freighters. 

Although Puerto Iguazú is isolated from Ciudad del Este by the Paraná, Puerto Iguazú has access 

to Brazil’s Foz do Iguaçu across the Iguazú at the 489-meter-long Tancredo Neves International 

Bridge. The Arab immigrants of Foz do Iguaçu and Ciudad del Este generally avoid visiting 

Puerto Iguazú because they reportedly do not feel welcome there and are regarded suspiciously 

by Argentine security officials.11

Society 

The General Population of the TBA 

By 2001, the TBA had a highly heterogeneous population of more than 700,000, 

including the area outside the three cities.12 Foz do Iguaçu’s population includes an estimated 65 

different nationalities.13

The three main ethnic communities in Ciudad del Este are the Chinese, Lebanese, and 

Korean.14 In 2001, the city’s largest ethnic group was the Chinese, with about 30,000 members, 

of whom only about 9,000 may be registered legally.15 The Portuguese language predominates. 

Guaraní is generally spoken by the city’s poor Paraguayan residents. Arabic is heard as much as, 

or perhaps more than, Spanish. Chinese and Korean are also commonly heard.16 Ciudad del 

Este’s Chinese residents, mostly from China’s southern Canton region, prefer this city over Foz 

do Iguaçu. 

11 Franco Iacomini, “Fronteira sem lei: A divisa com o Paraguai é a dor de cabeça do Mercosul” [Lawless Border: 

The Division with Paraguay and Mercosul’s Headache], Veja [São Paulo], no. 1541 (April 8, 1998), http://veja. 

abril.uol.com.br/080498/p_044.html. 

12 Mariano César Bartolomé, Amenzas a la seguridad de los estados: La triple frontera como ‘área gris’ en el cono 

sur americano [Threats to the Security of States: The Triborder Region as a ‘Grey Area’ in the American Southern 

Cone]. Buenos Aires, November 29, 2001, http://www.geocities.com/mcbartolome/triplefrontera1.htm; reprinted as 

Dr. Mariano César Bartolomé, “La triple frontera: Principal foco de inseguridad en el Cono Sur Americano” [The 

triborder: Principal focus of insecurity in the American southern cone], Military Review, July–August 2002 (Spanish 

edition), http://www-cgsc.army.mil/milrev/spanish/JulAug02/indxjasp.asp. 13 Bartolomé, 3, citing a 2001 estimate by Brazil’s Federal Police (Polícia Federal―PF). 14 Ricardo Grinbaum, “In Paraguay, Smugglers' Paradise,” World Press Review, 43, no.1 (January 1996): 25–26 

(reprinted from Veja). 15 Bartolomé, 7. 

16 Franco Iacomini, “Fronteira sem lei: A divisa com o Paraguai é a dor de cabeça do Mercosul” [Lawless Border: 

The Division with Paraguay and Mercosul’s Headache], Veja [São Paulo], no. 1541 (April 8, 1998), http://veja.abril. 

uol.com.br/080498/p_044.html. 
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Muslim Population 

The TBA has one of the most important Arab communities in South America. Of the 

Arab population in Ciudad del Este and Foz do Iguaçu, an estimated 90 percent is of Lebanese 

origin.17 Estimates of the size of the Arab community of immigrants in the TBA (mainly in 

Ciudad del Este and Foz do Iguaçu) range from 20,000 to 30,000, with most residing in Foz do 

Iguaçu.18 Of these general figures, Foz do Iguaçu’s Arab population accounts for 10,000 to 

21,000 Arabs of Palestinian and Lebanese descent.19

The Arab community in the TBA is tightly knit, with its own schools and clubs, making 

outside penetration very difficult. Most Arab immigrants in Foz do Iguaçu live in gated 

condominiums.20 The cultural 

and social demographics of 

Ciudad del Este and Foz do 

Iguaçu make an ideal operations 

base for Arabic-speaking 

terrorist or criminal groups. A 

few extremists can get together, 

form a highly secure cell, carry 

out their mission, and return with 

alibis backed up by many in the 

community. Sympathizers of al 

Qaeda have allegedly been active 

in the TBA for these reasons. 

A view of a mosque in Foz do Iguaçu, Brazil 

Source: Istoé [São Paulo], August 11, 2001. 

17 Bartolomé, 4. 

18 The New York Times reports that “more than 20,000 Middle Eastern immigrants, most from Lebanon and Syria, 

live in the area.” See Larry Rohter, “South America Region Under Watch for Signs of Terrorists,” New York Times, 

December 15, 2002, 1A, 32. Jane’s notes that the region’s 629,000 population includes 23,000 Arabs of Palestinian 

and Lebanese descent. See John Daly, “The Suspects: The Latin American Connection,” Jane’s Terrorism & 

Security Monitor, October 1, 2001. The 30,000 figure is cited by Marc Perelman, U.S. Joining Terrorism Probe 

Along Lawless Brazil Border: Hezbollah, Al Qaeda Links Sought. The Lebanese Foundation for Peace (LFP), 

December 13, 2002, http://www.free-lebanon.com/LFPNews/2002/terrorprobe/terrorprobe.html. 19 A Gazeta do Iguaçu [Foz do Iguaçu], “Muslims Prevail Among Small Religions in Foz,” February 3, 2003, as 

translated for FBIS, “Highlights From the Tri-Border Press for the Week 3-7 February,” February 11, 2003 (FBIS 

Document ID: LAP20030211000124). 

20 “Argentina, Paraguay, Brazil Step Up Search for "terrorists" in Triborder Area,” BBC Monitoring Service [UK], 

September 15, 2001. 
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Argentina’s total Muslim population is known to be approximately three times as large as 

its Jewish population. Estimates of the former range from 700,000 to 900,000, with the lower 

figure considered by some researchers to be more likely.21 The number of Jews living in 

Argentina is estimated to be about 250,000, of whom about 80 percent live in Buenos Aires.22

Argentina’s Jewish population has been the target of terrorism by Islamic fundamentalists and 

neo-Nazis. 

Foz do Iguaçu reportedly has Brazil’s second-largest Arab community (São Paulo may 

have the largest).23 Nevertheless, Foz do Iguaçu’s Arab population seems relatively small in 

comparison with a reported 1 million Muslims who have Brazilian citizenship and live in Brazil. 

Most Brazilian Muslims came from Lebanon, Syria, Palestine, Egypt, and other countries, but 

those in Foz do Iguaçu are mostly of Lebanese and Palestinian descent. Many members of the 

Arab population of Foz do Iguaçu and its surrounding hinterlands maintain commercial outlets in 

Ciudad del Este. 

Economy 

Ciudad del Este is an oasis for informants and spies; peddlers of contraband (largely 

cheap East Asian goods) and counterfeit products; traffickers in drugs, weapons, and humans 

(prostitutes, including women and children forced into prostitution); common criminals; mafia 

organizations; and undocumented Islamic terrorists. In Ciudad del Este, street merchants sell not 

only cheap trinkets and counterfeit products, but also items such as an AK-47 for US$375.24

Despite its seedy appearance, Ciudad del Este is a world-class center of commerce in terms of 

cash transactions. Thanks to the presence of organized crime, the city’s retail economy ranked 

third worldwide—behind Hong Kong and Miami—in volume of cash transactions, peaking at 

21 Pedro Brieger and Enrique Herszkowich, “The Muslim Community of Argentina,”The Muslim World [Hartford], 

92, nos. 1⁄2 (Spring 2002): 157–68. 

22 Jacob Kovadloff, Crisis In Argentina. American Jewish Community [New York], circa June 2002, 

http://www.ajc.org/InTheMedia/PublicationsPrint.asp?did=555. 

23 Gazeta do Iguaçu [Foz do Iguaçu], “Muslims Prevail Among Small Religions in Foz,” February 3, 2003, as 

translated for FBIS, “Highlights From the Tri-Border Press for the Week 3-7 February,” February 11, 2003 (FBIS 

Document ID: LAP20030211000124); and “Palestinian Community in Brazil,” Jornal do Iguaçu [Foz do Iguaçu], 

September 27, 2002, as translated for FBIS, “Highlights: Brazil - Paraguay Triborder Press 23-27 Sep 02,” 

September 30, 2002 (FBIS Document ID: LAP20020930000045). 

24 Jeffrey Goldberg, “In the Party of God,” The New Yorker 79, no. 32 (October 28, 2002). 
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US$12 billion in 1994.25 In 2001 the estimated annual turnover in Ciudad del Este made the 

city’s economy larger than that of the rest of Paraguay.26 The relatively small Arab community 

in Ciudad del Este is among Latin America’s most prosperous and influentia

An estimated 40,000 people cross the Friendship Bridge (Ponte da 

Amizade) daily. 

Source: Claudio Rossi, Veja [São Paulo], no. 1541 (April 8, 1998). 

l. 

 

The region’s main economic dynamic is business between Ciudad del Este and Foz do 

Iguaçu. On normal days, an estimated 30,000 to 40,000 people and 20,000 vehicles cross the 

Friendship Bridge between Brazil and Paraguay. Residents and tourists in Ciudad del Este also 

regularly cross between 

Paraguay and Brazil on foot, 

often without documents. 

Border checks by authorities 

have generally been limited to 

simple spot-checks, and less 

than 10 percent of personal 

baggage or vehicle loads are 

checked. The traditional status 

of the TBA as a source of 

cheap goods has been severely 

restricted, however, by new 

regulations issued by 

Argentina and Brazil. After 

Brazil implemented an integrated customs system to combat smuggling, commerce between 

Ciudad del Este and Foz do Iguaçu reportedly decreased by 90 percent.27 However, according to 

Mauro de Brito, head of the Federal Revenue Secretariat office in Foz do Iguaçu, it will take 

several years for the customs integration between Paraguay and Brazil to yield the expected 

25Sebastian Rotella, “Jungle Hub for World's Outlaws,” Los Angeles Times, August 24, 1998, 1; and Ricardo 

Grinbaum, “In Paraguay, Smugglers' Paradise,” World Press Review, 43, no.1 (January 1996), 25–26 (reprinted 

from Veja). 26 Larry Rohter, “Terrorists Are Sought in Latin Smugglers' Haven,” New York Times, September 27, 2001, A3. 27 “Commerce between Ciudad del Este and Foz do Iguacu Drops by 90 Percent,” Vanguardia [highest circulation 

daily in Ciudad del Este; aligned with the national daily ABC Color, it offers moderate and balanced reporting and 

editorial comment, but is occasionally sensationalistic], December 3, 2002, as translated for FBIS, “Brazil-Paraguay 

Triborder Press Highlights: November 25-29, 2002,” December 3, 2002 (FBIS Document ID: 

LAP20021203000105). 
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results. Referring to Paraguay’s “bribe culture,” de Brito attributed this delay to differences in 

legislation and in “culture” of customs agents.28

In an attempt to curb the loss of tax revenues, Argentina imposed limits of US$100 per 

month on nondurable merchandise and US$150 per month on durables that can be purchased in 

the region. In a similar measure, Brazilian authorities reduced from US$500 to US$150 the 

monthly amount that the sacoleiros (small-time Brazilian importers) can spend in the region.29

As a result of these and other measures, such as increased security, commercial activity in 

Ciudad del Este has declined considerably.30

Although Argentina’s Puerto Iguazú traditionally has had the least economic activity of 

the three TBA cities, the greatly reduced traffic across the Tancredo Neves Bridge during the 

1999-2000 period is also indicative of the economic downturn.31 From 3.4 million people 

crossing in 1999, the number dropped to 1.4 million in 2000, while total vehicle passages 

declined from 350,751 in 1999 to 242,669 in 2000.32 Argentine sources estimated in October 

2001 that 120,000 people annually, or 4,000 daily, were crossing the Tancredo Neves Bridge.33

ILLICIT ACTIVITIES BY ISLAMIC TERRORIST GROUPS IN THE TBA 

Background 

The TBA cities of Ciudad del Este and Foz do Iguaçu have served as a base and a haven 

for Islamic terrorists for plotting and occasionally succeeding in carrying out terrorist attacks 

elsewhere in the Americas. Among the various Islamic fundamentalist groups reported to have a 

presence in the region are extremist cells tied to al Qaeda, Hizballah, Al-Jihad (Egyptian Islamic 

Jihad), and al-Muqawamah. 

28 “Brazil, Paraguay Border Customs Integration Facing Problems,” Vanguardia, April 11, 2003, as translated by 

FBIS, “Highlights: Argentina-Brazil- Paraguay Triborder Media, April 11, 2003 (FBIS Document ID: 

LAP20030411000098). 

29 Bartolomé, 2. 

30 Bartolomé, 2. 

31 Bartolomé, 4, citing “Em Puerto Iguazú, a segurança é reforçada” [In Puerto Iguazú, Security Is Reinforced], O 

Estado de São Paulo, September 17, 2001. 32 Mendel, William W., Foreign Military Studies Office (FMSO). “Paraguay's Ciudad del Este and the New Centers 

of Gravity,” Military Review 82, no. 2 (March–April 2002), 51—58. 33 Bartolomé, 2. 
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Aftermath of the AMIA bombing in 

Buenos Aires, July 18, 1994 

Source: AP, BBC Mundo, December 

23, 2000. 

The bombing of the Israeli Embassy in Buenos Aires on March 17, 1992, followed by the 

bombing of a Jewish community center, the Argentine-Israeli Mutual Association (Asociación 

Mutual Israeli-Argentina—AMIA), a Jewish community center, in Buenos Aires on July 18, 

1994, focused the attention of the TBA countries, Israel, and the United States on the TBA 

because the investigation into both attacks led back to Hizballah operatives in the TBA.34 Since 

the Israeli Embassy bombing in 1992, Imad 

Mughniyah (also spelled Mughanniyah or Mugniyeh; 

alias ‘Hajji’), a Lebanese national and the head of the 

security service of Al-Jihad (Egyptian Islamic Jihad), 

which is linked to the pro-Iranian Party of God, or 

Hizballah, has been a fugitive. In May 2003, 

Argentine prosecutors linked both Ciudad del Este 

and Foz do Iguaçu to the AMIA bombing and issued 

arrest warrants for two Lebanese citizens, Assad 

Ahmad Barakat (see Barakat, Assad Ahmad 

Mohamad, Appendix) and Imad Fayed Mugniyah, 

who at the time of the bombing were living in Ciudad 

del Este.35 According to the investigators handling the 

AMIA case in Buenos Aires, Barakat played a crucial 

role in financing the bombing because he reportedly 

had a cell that made arrangements to import all of the 

materials related to the attack into the TBA. In the years since then, investigators have identified 

Barakat as not only Hizballah’s military operations chief in the TBA, but also as its chief 

Southern Cone fund-raiser.

36

It is not known what connection, if any, al Qaeda may have had with the AMIA attack, an 

action usually associated with Hizballah. Whether the AMIA bombing was collaboration 

 

34 Mario Daniel Montoya, “Israel Takes Special Interest in Triple Border Area,” Jane’s Intelligence Review 13, no. 

12 (December 2001): 13–14; and Jack Epstein, “Where Tourism Meets Terrorism,” U.S. News & World Report 117, 

no. 6 (August 8, 1994): 38. 

35 ABC Color [Internet version-www], May 28, 2003, as translated by FBIS Document ID: LAP20030528000104, 

“Argentine Prosecutors Link Tri-Border Hizballah Leaders to AMIA Attack,” May 28, 2003. 36 “Government Keeps Watchful Eye on Paraguay’s Arab Community,” October 13, 2001, EFE News Services 

(FBIS Rec. No. OEF2C4F9D99922F0). 
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between Hizballah and another group is unclear. Argentina’s foreign ministry disclosed on 

October 18, 2001, that its embassy in Riyadh, Saudi Arabia, had received a telephone call on 

October 26, 2000, claiming responsibility for an unspecified “explosion” in Argentina. Argentine 

judicial sources believe that the callers to the Riyadh embassy were referring to the July 18, 

1994, attack on the AMIA.37 In late January 2003, Argentina’s Secretariat for State Intelligence 

(Secretaría de Información del Estado—SIDE) presented President Eduardo Duhalde with a 500-

page report on the AMIA bombing that confirms Hizballah’s use of C4 plastic explosive, which 

arrived from Ciudad del Este along with the two or three suicide bombers, who came from 

Lebanon.38 As of mid-2003, Argentine courts had resumed the investigation of the attacks on the 

AMIA and the Israeli Embassy in Buenos Aires and had determined that Assad Ahmad Barakat 

made suspicious trips to Teheran, Iran, between 1990 and 1991, and that he had also reportedly 

met with high-ranking officials of the Islamic Republic of Iran. On the same occasion, Barakat 

also traveled to Lebanon.39

The Islamic Terrorist Presence in the TBA, 1999-June 2003 

There appears to be general agreement among U.S. counterterrorism officials that Islamic 

terrorist groups have a presence in the TBA, although some may be more skeptical than others 

that al Qaeda is included among these groups, much less cooperating with Hizballah in the 

region. Francis X. Taylor, the Department of State’s coordinator for counterterrorism, told 

Congress on October 10, 2001, that the TBA has “...the longstanding presence of Islamic 

extremist organizations, primarily Hizballah, and, to a lesser extent, the Sunni extremist groups, 

such as the al-Gama’a al-Islamiyya (Egyptian Islamic Group) and Hamas.”40 Taylor noted that 

the activities of these organizations include fund-raising and proselytizing among the zone’s 

Middle Eastern population, as well as document forging, money laundering, contraband 

37 “Al-Qaeda and Argentina,” Jane’s Intelligence Digest, October 26, 2001; Ed Blanche, “Al-Qaeda Link to Buenos 

Aires Bombings Emerges; Phone Call to Embassy in Riyadh Opens Can of Worms,” The Daily Star [Beirut; Internet 

version-www], October 29, 2001, an transcribed by FBIS Document ID: GMP20011030000033, 

“Al-Qa'ida Link to Argentine Bombings Seen; Mughniyah ‘Ordered out of Iran’,” October 29, 2001. 

38 Raul Kollmann, “Report on Interview with an Unidentified ‘Government Spokesman,’” Pagina/12 [Buenos Aires; 

Internet version-www], January 19, 2003, as translated for FBIS, “Responsibility for Argentine-Jewish Center 

Bombing Attributed to Iran,” January 19, 2003 (FBIS Document ID: LAP20030119000009). 

39 ABC Color [Internet version-www], June 9, 2003, as translated by FBIS Document ID: LAP20030609000051, 

“Paraguay: Argentine Courts Link Barakat to Iranian Leaders,” June 9, 2003 

40Anthony Faiola, “U.S. Terrorist Search Reaches Paraguay; Black Market Border Hub Called Key Finance Center 

for Middle East Extremists,” Washington Post, October 13, 2001, A21. 
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Osama bin Laden spent three 

days in Foz do Iguaçu. 

Source: Reuters, from Veja, 

March 19, 2003.

smuggling, and weapons and drug trafficking. The U.S. Federal Bureau of Investigation (FBI) 

apparently shares that assessment. In the same hearing, a U.S. Congressman pointed out that 

“Open-source reporting indicates that the FBI claims that Islamic extremist cells linked with 

Hizballah, Islamic Jihad, and al Qaeda are operating in Paraguay, Uruguay, and Ecuador.”41

Mark Davidson, spokesman for the U.S. Embassy in Asunción, affirmed on May 22, 2002, that 

the TBA is indisputably an area from which Islamic terrorist groups are financed by means of 

money derived from illicit activities, but he, like Taylor, 

omitted mention of al Qaeda. 

Al Qaeda reportedly has had an interest and a 

presence in the TBA since at least the mid-1990s. Osama 

bin Laden reportedly visited Foz do Iguaçu in 1995 (the 

specific month is unclear), according to Veja, a leading 

Brazilian newsweekly. Veja, citing an anonymous high 

official of the Brazilian Intelligence Agency (Agência 

Brasileira de Inteligência—Abin), reported that a 28-

minute videotape shows bin Laden participating in 

meetings at a mosque in the area during his visit.42 Al 

Qaeda’s Khalid Sheikh Mohammed is also believed to 

have visited the TBA that December.43 Mohammed also 

reportedly returned to the Foz do Iguaçu area in 1998.44

There have been indications that terrorist elements with possible al Qaeda connections 

have used mosques in the TBA for plotting or recruitment purposes. CNN reported that two 

 

41 “Prepared Statement of Representative Cass Ballenger, Chairman, Subcommittee on the Western Hemisphere, 

U.S. House of Representatives.” Transcript of House Western Hemisphere Subcommittee Hearing, October 10, 

2001. Center for International Policy, Columbia Project, http://www.ciponline.org/colombia/101001.htm. 42 “Bin Laden Reportedly Spent Time in Brazil in '95,” Washington Post, March 18, 2003, A24; “Bin Laden esteve 

em Foz do Iguaçu e até deu palestra em mesquita [Bin Laden Was in Foz do Iguaçu and Even Gave A Lecture in A 

Mosque], O Estado de São Paulo, March 16, 2003. [Estadao.com: http://www.estado.estadao.com.br/editorias/ 

2003/03/16/int026.html]; and Policarpo Junior, “Ele esteve no Brasil” [He Was in Brazil], Veja on-line, no. 1,794 

(March 19, 2003), http://veja.abril.com.br/190303/p_058.html. 

43 Reuters, “Bin Laden Reportedly Spent Time in Brazil in ’95,” Washington Post, March 18, 2003, A24; and O 

Estado de São Paulo [Internet version-www], March 9, 2003, as translated for FBIS, “Brazil: Terrorist Khalid 

Sheikh Mohamed's Passage Through Brazil Reported,” March 9, 2003 (FBIS Document ID: LAP20030308000052); 

and A Gazeta do Iguaçu, March 10, 2003, 2, as translated for FBIS, “Brazilian Police: Khalid Shaykh Visit to Triborder in 1995 Unconfirmed,” March 10, 2003 (FBIS Document ID: LAP20030311000123). 

44 Kevin G. Hall, “Accused al-Qaida Terrorist Spent time in Brazil, Police Say,” Knight Ridder Tribune News 

Service, March 13, 2003, 1. 
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mosques in Foz do Iguaçu and one in Ciudad del Este are reportedly suspected by international 

and regional intelligence sources of involvement in terrorist activity and serving as revolving 

doors for Islamic extremists.45 Argentine intelligence documents show links between the 

mosques and various terror groups, including Hizballah and Egypt's al-Gama’a al-Islamiyya and 

Islamic Jihad.46 Argentine security forces have identified Sheik Mounir Fadel, spiritual leader of 

Ciudad del Este's main mosque, as a senior Hizballah member.47 

By mid-1999, the SIDE (Secretariat for State Intelligence) was investigating Islamic 

extremist groups in the TBA that allegedly were operating under the orders of Osama bin 

Laden.48 The SIDE investigation resulted from a shared belief that Iran was no longer the only 

concern in regard to terrorist cells operating in Ciudad del Este and Foz do Iguaçu. That 

conviction was based on information from the SIDE’s own files and from other intelligence 

services, which reported that bin Laden’s al Qaeda had gained ground in the TBA as a result of 

Iran’s partial withdrawal from the important Arab community in the area, thanks to Iranian 

President Mohamed Khatami.49 

In 1999 SIDE agents began taping telephone calls made by Islamic extremists in Ciudad 

del Este and Foz do Iguaçu to the Middle East and secretly filming meetings of the Shi'ite and 

minority Sunni groups who were part of the huge Moslem population in the TBA.50 As a result 

of this surveillance, the SIDE reported that al Qaeda agents had been identified in the TBA.51

Coordinated police operations conducted in the three TBA cities on December 22, 1999, 

reportedly thwarted a plot by TBA-based terrorists under the control of Osama bin Laden and 

Hizballah leader Imad Mouniagh to stage simultaneous attacks on Jewish targets in Ciudad del 

Este, Buenos Aires, and Ottawa, Canada, in an attempt to undermine the Middle East peace 

45 Harris Whitbeck and Ingrid Arneson, “Sources: Terrorists Find Haven in South America,” CNN, November 7, 

2001, http://www.cnn.com/2001/WORLD/americas/11/07/inv.terror.south/index.html. 46 Whitbeck and Arneson. 

47 Peter Hudson , “There Are No Terrorists Here,” Newsweek, November 19, 2001. 48 Daniel Santoro, Clarín [Buenos Aires; an Independent, tabloid-format daily; highest-circulation newspaper, 

Internet version], July 18, 1999, as translated for FBIS, “Bin Laden's Followers in Triborder Area Probed,” July 19, 

1999 (FBIS, WA1907180899). 

49 Santoro, Clarín. 50Daniel Santoro, Clarín, September 16, 2001, 8–9, as translated for FBIS, “Argentine Intelligence Services' 1999 

Report on Usamah Bin-Ladin's Agents in Triborder Area Viewed,” September 16, 2001 (FBIS 

LAP20010916000021). 

51 Mario Daniel Montoya, “War on Terrorism Reaches Paraguay’s Triple Border,” Jane’s Intelligence Review 13, 

no. 12 (December 2001): 12; and Daniel Santoro, Clarín, September 16, 2001, 8–9, as translated for FBIS, 

“Argentine Intelligence Services' 1999 Report on Usamah Bin-Ladin's Agents in Triborder Area Viewed,” 

September 16, 2001 (FBIS LAP20010916000021). 
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A 

 

process.52 Individuals rounded up but later released included operatives of Hamas and Hizballah, 

as well as a suspected Iranian intelligence agent. In order to escape the SIDE investigation, the 

top alleged Hizballah and al Qaeda agents involved—Hezballah’s Assad Ahmad Barakat and the 

Muslim Brotherhood’s or Al-Gama’a al-Islamiyya’s Mohamed Ali Aboul-Ezz Al-Mahdi Ibrahim 

Soliman—reportedly left Ciudad del Este and Foz do Iguaçu, but both were later arrested.53

The SIDE also reported a significant shift in the Muslim terrorist groups in the TBA after 

1999.54 Pro-Iranian Shi’ite terrorist organizations, such as the Islamic Jihad and the Lebanese 

Hizballah faction, who had normally worked separately from the orthodox Sunnites and followed 

instructions from Iran, had begun to cooperate and maintain contact.55 This shift appeared to 

follow factional infighting among moderate and radical Hizballah adherents in the TBA and 

perhaps suggested that al Qaeda had taken advantage of the tensions to recruit new acolytes.56

As some of the influence of the Iranians and Hizballah on the various Islamic groups in the TB

faded, the smaller groups, according to the SIDE, began supporting bin Laden by collecting 

funds, indoctrinating others, giving refuge to fugitives, and offering basic military training, such 

as how to build homemade bombs.57 The SIDE’s reports reportedly were received with 

skepticism by the U.S. Central Intelligence Agency (CIA) and Israel’s Mossad.58 

One of the smaller Shi’ite extremist groups operating in the TBA is Al-Muqawamah alIslamiyah, or Islamic Resistance. The shadowy Al-Muqawamah appears to be a principal proIran section of Hizballah whose members live normal lives in sleeper cells but become 

52 Special Correspondents Vladimir Jara Vera and Dany Ortiz, ABC Color [Asunción; Internet version; major daily, 

opposed to the González Macchi administration; owner Aldo Zuccolillo is an influential Oviedo Supporter of former 

General Oviedo], December 23, 1999, as translated for FBIS, “Police Conduct Operation to Intimidate Islamic 

Extremists,”,December 23, 1999 (FBIS ID: FTS19991223001521). 

53 Jara Vera and Dany Ortiz, ABC Color. 54 Tânia Monteiro, DPA, EFE, and Agence France Presse, “Tríplice fronteira tinha agentes sauditas, diz "Clarín" 

[TriBorder has Saudi agents, Clarín says], Estadão Web site, September 17, 2001. 55Daniel Santoro, Clarín [Internet version], July 18, 1999, as translated for FBIS, “Bin Laden's Followers in 

Triborder Area Probed,” July 19, 1999 (FBIS, WA1907180899). 

56 Comp. A. William Samii, “Competition Among South American Hizballah Resumes,” Iran Report [RFE/RL] 3, 

no. 27 ( July 17, 2000), citing ABC Color, July 12, 2000; Iran Report [RFE/RL], January 10, 2000; and 

“Competition Among South American Hizballah,” RFE/RL, February 6, 2002, translating ABC Color, January 5, 

2002, http://www.rferl.org/iran-report/2000/01/2-100100.html. 

57 Daniel Santoro, Clarín, September 16, 2001, 8–9, as translated for FBIS, “Argentine Intelligence Services' 1999 

Report on Usamah Bin-Ladin's Agents in Triborder Area Viewed,” September 16, 2001 (FBIS 

LAP20010916000021). 

58 Santoro. 
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Salah Abdul Karim Yassine 

under arrest in Uruguay 

Source: Cromos [Bogotá], 

September 24, 2001

combatants when mobilized.59 In early 2000, Brazilian and Paraguayan experts obtained 

photographs of Arab extremists taken at the Al-Mukawama training camp (see Fayad, Sobhi 

Mahmoud, Appendix), possibly located at a farm outside Foz do Iguaçu.60 The men in the photos 

included several businessmen. They were photographed beside an Iranian flag and a flag from alMuqawamah, a shadowy pro-Iran wing of Hizballah. Another photograph is said to show a 

Hizballah leader reading a letter from Imad Mounigh, presumably wanted Hizballah activist 

Imad Mughniyah.61 Argentine intelligence officials reportedly believe that Hizballah runs 

weekend training camps on farms in the remote jungle terrain near Foz do Iguaçu, where young 

adults are recruited and given weapons training and children are indoctrinated in Hizballah 

ideology.62

In late 2000, at least one known TBA-based terrorist 

was involved in a plot to attack the U.S. and Israeli embassies 

in Asunción along with 30 other Islamic terrorists, who would 

carry out diversionary attacks elsewhere in the city in order to 

distract security forces.63 On November 28, 2000, Paraguayan 

authorities arrested Salah Abdul Karim Yassine, a Palestinian 

and suspected Hamas explosives expert who had entered the 

country using false documents and was living in Ciudad del 

Este.64 Yassine was being investigated for his suspected 

affiliation with an Egyptian terrorist organization.65 It was 

found that he was involved in the plot, and he was sentenced 

 

59 Sami G. Hajjar, Hizballah: Terrorism, National Liberation, or Menace? Carlisle, Pennsylvania: Strategic Studies 

Institute, U.S. Army War College, August 2002, http://216.239.57.100/search?q=cache:l1y-vVhCqYJ:www.carlisle.army.mil/ssi/pubs/2002/hizbala/hizbala.pdf+al-Muqawamah&hl=en&ie=UTF-8. 

60 ABC Color [Internet version-www], January 16, 2002, as translated for FBIS, “Paraguay: Court Investigates 

Hizballah Base Photos” (FBIS, LAP20020116000091). 

61 London Bureau Roundup of Terrorism Issues/Developments in the Mideast/Islamic World and the Aegean 

derived from sources monitored by FBIS, “Latin America: Islamic Fundamentalists in Colombia, Paraguay,” 

January 10, 2002 (FBIS GMP20020109000400). 

62 Jeffrey Goldberg, “In the Party of God,” The New Yorker 79, no. 32 (October 28, 2002). 63 Bartolomé, 11, citing “Un presunto jefe de grupo terrorista árabe fue detenido” [A presumed head of an Arab 

terrorist group was detained], Noticias, November 30, 2000. 64 Patterns of Global Terrorism, 2000, Office of the Coordinator for Counterterrorism, April 30, 2001; Nelson Fredy 

Padilla, “Los hombres de Osama bin Laden en Colombia” [The Men of Osama bin Laden in Colombia] Cromos, No. 

4, 364, September 24, 2001; and Pedro Doria, “Terrorismo aqui no lado” (Terrorism Here Next Door), 

www.No.com.br, November 30, 2000. 

65 Bartolomé, 11. 
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19

to a four-year prison term on charges of possessing false documents and entering the country 

illegally. 

Intelligence sources say this mosque in Ciudad 

del Este is a revolving door for extremists. 

Source: CNN.com, November 8, 2001 

Despite increased surveillance by security forces in the region, the TBA is probably still 

used by Islamic terrorist groups as a fund-raising center and as a base for plotting, coordinating, 

or otherwise supporting terrorist attacks against U.S. and Israeli targets in the Americas. Al 

Qaeda operatives in the TBA reportedly were connected to a foiled al Qaeda plot to 

simultaneously attack the U.S. embassies in Montevideo, Uruguay, and Quito, Ecuador, in April 

2001.66 On October 10, 2001, a group of ten terrorists identified as belonging to a Lebanese 

Hizballah cell was reportedly caught in Mexico 

City on its way to assassinate President Vicente 

Fox and carry out a terrorist attack in the 

Mexican Senate.67 The terrorists reportedly 

reached Mexico from the TBA, following a 

training session. The description of one of the 

instructors resembled Imad Mughniyah, who, 

working from his bases in Iran and Hizballahcontrolled areas of Lebanon, reportedly directs 

the activities of Islamic terrorists in South 

America, including the TBA, in coordination 

with al Qaeda.68

U.S. authorities expressed concern in 

late 2001 over the possibility that lax immigration procedures in various Latin American 

countries have allowed terrorist “sleepers” to adopt new identities and to infiltrate into the United 

 

66 Jose Meirelles Passos, "The Shadow of Bin Ladin in Latin America,” O Globo [Rio de Janeiro; Internet versionwww], October 29, 2001, as translated for FBIS, “Brazil: Daily Notes US Views Triborder as Al-Qa'idah Center for 

L.A.,” October 29, 2001 (FBIS LAP20011029000036). 

67 DEBKAfile Exclusive, “New Direction in Search for Anthrax Culprit” [Jerusalem; DEBKAfile www], November 

11, 2001, as transcribed by FBIS, “DEBKA Sources Say Iraqi Nuclear Devices Ready for Arming, View Bin Ladin 

Threat,” November 11, 2001 (FBIS Document ID: MP20011111000147). 

68 Mike Boettcher, “South America’s ‘Tri-border’ Back on Terrorism Radar,” CNN, November 8, 2002, citing 

“coalition intelligence sources,” http://www.cnn.com/2002/WORLD/americas/11/07/terror.triborder/. For 

discussions of al Qaeda-Hizballah links, see Yael Shahar, ICT Researcher, “Al-Qa'ida Links to Iranian Security 

Services,” Herzliyya International Policy Institute for Counterterrorism [Tel Aviv; Internet version-www], January 

20, 2003; and Lenny Ben-David, “Sunni and Shiite Terrorist Networks: Competition or Collusion?” Jerusalem Issue 

Brief, Jerusalem Center for Public Affairs [Jerusalem; Internet version-www], December 18, 2002, as transcribed by 

FBIS, “Israeli Expert Says International Terror Breaches Secular-Religious Divide,” December 18, 2002 (FBIS 

Document ID: GMP20021225000066).
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States, especially from Argentina. By 2001, investigators had come to believe that numerous 

Islamic terrorist “sleeper cells” had been established in Ciudad del Este and Foz do Iguaçu, as 

well as Uruguay’s Chuy since the 1990s.69 Based on an examination of telephone records, 

Argentine investigators in 2002 found “evidence of coordination between the TBA and sleeper 

cells in Buenos Aires.” Two main centers of activity were cited: the principal mosque in Foz do 

Iguaçu and a travel agency there.70

Paraguay’s Vice Interior Minister Mario Agustin Sapriza affirmed on May 3, 2001, that 

the TBA serves as a base of operations for dormant Islamic extremist cells linked to international 

terrorism.71 Sapriza explained that Hizballah, Hamas, and other terrorist organizations use this 

region to plan their actions, to obtain supplies, and to live for a certain period of time before 

launching new attacks in other countries. 

Argentina and Brazil have been less forthcoming in acknowledging the existence of 

sleeper cells in the TBA. Brazil’s Justice Minister José Gregori said in October 2001 that he had 

no “conclusive information” on al Qaeda cells in Brazil.72 However, Judge Walter Fanganiello 

Maierovitch, a money-laundering expert affiliated with the Giovanni Falconi Brazilian Criminal 

Sciences Institute, expressed an opposite viewpoint regarding al Qaeda in making the following 

points in a September 2001 O Globo interview:73

 al Qaeda is establishing a base in the Arab community near Ciudad del Este. 

 bin Laden is attempting to establish a presence in the TBA because al Qaeda’s 

terrorist activities are linked with the trafficking of arms, drugs, and uranium, as well 

as money laundering, in association with the Russian and Chinese mafias. 

 bin Laden’s goal is to use religious entities as fronts for training terrorists and provide 

a hiding place for Islamic fugitives. 

69 Bartolomé, 10, citing “Divergencias nas relações Brasília-Washington” (Differences in relations between Brasilia 

and Washington], Zero Hora, September 19, 2001; and La Nación [Buenos Aires], October 3, 2001, as translated for 

FBIS, “National Border Guard Commander: Tri-Border Area Hotbed of Sleeper Cells,” October 3, 2001 (FBIS 

Docoument ID: LAP20011003000015). 

70 Larry Rohter, “South America Region Under Watch for Signs of Terrorists,” New York Times, December 15, 

2002, 1A, 32. 

71 ABC Color [Internet version-www], May 4, 2001, as translated for FBIS, “Paraguay: Vice Interior Minister 

Confirms Presence of ‘Dormant Islamic Terrorist Cells’” (FBIS Document ID: LAP20010505000002). 

72 José Meirelles Passos, "The Shadow of Bin Ladin in Latin America,” O Globo [Internet version-www], October 

29, 2001, as translated for FBIS, “Brazil: Daily Notes US Views Triborder as Al-Qa'idah Center for L.A.,” October 

29, 2001 (FBIS Document ID: LAP20011029000036). 

73Germano Oliveira, O Globo, September 19, 2001, as translated for FBIS, “Brazil’s Former Drug Czar: Bin-Ladin 

Establishing Al-Qa’idah Cell on Triborder,” September 19, 2001 (FBIS Document ID: LAP200109119000051). 
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 bin Laden is recruiting members of the Hizballah group that bombed the Jewish 

community center (AMIA) in Buenos Aires in 1994. 

Mohamad Ali Aboul-Ezz Al-Mahdi Ibrahim Soliman

being arrested on April 15, 2002, in Foz do Iguaçu 

Source: ABC Color, July 8, 2002. 

In early 2002, further suggesting al Qaeda’s presence in the TBA, the Paraguayan press 

reported that al Qaeda and other Islamic terrorist groups had established training camps and were 

talking of holding a secret terrorist 

summit meeting in the TBA.74 In 

early February, Paraguayan and 

foreign security forces as well as 

Brazilian, Argentine, Israeli, and U.S. 

agents searched the TBA, especially 

Ciudad del Este and Foz do Iguaçu, 

for five Afghan citizens who 

allegedly belong to the Taliban and 

are linked to al Qaeda, either as 

supporters or members.75 Each of the 

individuals allegedly was carrying 

three or four sets of different identity 

documents. Adding to concerns that 

Osama bin Laden's operatives were 

among those operating in the TBA, a 

map of the TBA was recovered from 

an al Qaeda safehouse in Kabul, 

Afghanistan in 2002.76

One individual suspected of 

being linked to Osama bin Laden's al 

Qaeda is Egyptian citizen Al-Mahdi 

Ibrahim Soliman, who was arrested on April 15, 2002, in Foz do Iguaçu, where he had been 

 

74 Larry Rohter, “South America Region Under Watch for Signs of Terrorists,” New York Times, December 15, 

2002, 1A, 32 

75ABC Color Web site, February 5, 2002, as cited by “International Security Forces Search for Five Afghan 

Fugitives in Paraguay,” BBC Monitoring Service [UK], February 5, 2002. 76 Larry Rohter, “South America Region Under Watch for Signs of Terrorists,” New York Times, December 15, 

2002, 1A, 32 
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living for seven years.77 He was arrested under charges filed by the Egyptian government that he 

is a member of a terrorist faction, namely Al-Gama’a al-Islamiyya, that carried out deadly 

attacks in several countries. Soliman earlier had been arrested in Foz do Iguaçu in 1999 on 

charges of dealing in contraband merchandise.78

In April 2002, Paraguayan reporters linked Assad Ahmad Barakat to Osama bin Laden by 

pointing out that Barakat was the owner of the Mondial (World) Engineering and Construction 

company, with offices in Ciudad del Este and Beirut. This company was suspected of having 

made contributions to al Qaeda, using money obtained from real estate fraud.79 Barakat was 

allegedly using the company to collect funds for al Qaeda by selling apartments in Beirut.80 For 

example, unidentified intelligence sources cited an authorization by Barakat, dated February 14, 

2002, in Foz do Iguaçu ordering the transfer of an apartment for US$120,000 in Lebanon.81 

Other unspecified front businesses created by Barakat are reportedly designed to channel funds 

to Osama bin Laden, under the pretext of charitable contributions to orphanages. Journalist 

Sebastian Junger, citing unidentified Argentine intelligence sources, reported in late 2000 that 

Ramzi bin al-Shibh, the al Qaeda leader who was arrested in Pakistan in 2002, “has known, 

confirmed contacts with a Lebanese businessman working in Ciudad del Este, Paraguay, and in 

Foz do Iguaçu, Brazil.”82 Whether Ramzi bin al-Shibh, who is in U.S. custody, has identified this 

businessman as Assad Ahmad Barakat is not known. 

In July 2002, the Paraguayan police arrested a pair of Lebanese men, Ali Nizar Darhoug, 

owner of two shops in Ciudad del Este, and his nephew, Muhammad Daoud Yassine, who were 

said to be raising funds for al Qaeda. Ali Nizar Darhoug’s name was reportedly found in an 

address book belonging to Abu Zubaydah, one of the highest-ranking al Qaeda officials to be 

77 Mauri Konig, “Egípcio preso em Foz do Iguaçu” [Egyptian Arrested in Foz do Iguaçu], O Estado de São Paulo, 

April 16, 2002, http://www.estado.estadao.com.br/editorias/2002/04/16/int002.html; and Miriam Karam, São Paulo 

Valor [financial daily, published jointly by the Folha and Globo media conglomerates; Internet version-www], May 

20, 2002, as translated for FBIS, “Brazil: Federal Police Denies Presence of Terrorist Cells in Foz do Iguaçu,” (FBIS 

Document ID: LAP20020520000040). 

78 AJB, “Terrorismo: Egípcio é capturado pela PF” [Terrorism: Egyptian Is Captured by PF], Correiro Braziliense

[Brasília], April 16, 2002, http://www2.correioweb.com.br/cw/EDICAO_20020416/pri_ult_160402_259.htm. 79 Bartolomé, 16, citing “Triple frontera: Empresa sería de Al-Qaeda” [Triborder: Company is linked to al Qaeda], 

Ámbito Financiero, April 30, 2002, 14. 80 “Barakat Continues To Collect For Hizballah,” Última Hora [Asunción], May 1, 2002, as translated by FBIS, 

“Highlights: Paraguay Press,” May 1, 2002 (FBIS Document ID: LAP20020501000022). 

81 “Barakat Continues To Collect For Hizballah,” Última Hora [Asunción], May 1, 2002. 82 Sebastian Junger, “Terrorism's New Geography,” Vanity Fair, no. 508 (December 2002): 196. 
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captured by the United States.83 Darhoug was wiring as much as US$80,000 each month to 

banks in the United States, the Middle East, and Europe.84

Imad Mughniyah, who 

reportedly has undergone 

radical plastic surgery.

Source: FBI and ABC Color, 

November 27, 2002. 

A spike in reports of al Qaeda in the TBA took place in October 2002. Argentina 

bolstered security measures in the region after several reports from Israel's intelligence service, 

the Mossad, warned of the presence of al Qaeda and Hizballah cells in Ciudad del Este.85 In late 

October 2002, Argentine intelligence informed the United States of an al Qaeda-Hizballah 

meeting that was held in the TBA. A CNN report of November 8, citing “coalition intelligence 

sources,” also disclosed that a “terrorist summit to plan attacks 

against U.S. and Israeli targets in the Western hemisphere” had 

taken place in Ciudad del Este and the surrounding area, and that 

the terrorists attending the meetings were representatives of 

Hizballah and organizations sympathetic to the al Qaeda 

network.86 CNN’s Middle East intelligence sources also 

indicated a new terrorist effort aimed at U.S. and Israeli interests 

and coordinated by Imad Mughniyah. CNN reported that 

Mughniyah, working from his bases in Iran and Hizballahcontrolled areas of Lebanon, was directing the activities of 

terrorists in South America and planning to hit U.S. and Israeli 

targets if the United States attacked Iraq, or if Israel was drawn 

into the conflict. The Paraguayan government denied the CNN 

report.87 Argentine intelligence sources reportedly also rejected the CNN report that the meeting 

was held in the TBA, claiming instead that it was held in another Latin American location.88

 

83 Jeffrey Goldberg, “In the Party of God,” The New Yorker 79, no. 32 (October 28, 2002). 84 Goldberg; and Larry Rohter, “South America Region Under Watch for Signs of Terrorists,” New York Times, 

December 15, 2002, 1A, 32 

85 Clarín [Buenos Aires; Internet version-www], October 19, 2002, as translated by FBIS, “Argentina: Newspapers 

Publish Contradictory Reports On Possible Attacks In Tri-Border Area,” October 19, 2002 (FBIS Document ID: 

LAP20021019000022). 

86 Mike Boettcher, with Ingrid Arnesen, “South America's 'Tri-border' Back on Terrorism Radar,” CNN, November 

8, 2002, http://www.cnn.com/2002/WORLD/americas/11/07/terror.triborder/. 

87 “Cabinet Members Refute TV Report and Deny Existence of Terrorist Activities,” Vanguardia [Ciudad del Este], 

November 9, 2002, as translated for FBIS, “Highlights: Brazil - Paraguay Triborder Press 4-15 Nov 02,” November 

21, 2002 (FBIS Document ID: LAP20021121000006). 

88 La Nación [Buenos Aires], November 8, 2002, 3, as translated by FBIS, “Argentine Intelligence Services Dismiss 

Report on Terrorist Powwow as Inaccurate,” November 8, 2002 (FBIS Document ID: LAP20021108000038). 
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The potential for TBA-based terrorists acquiring powerful explosives was illustrated by 

an incident reported on June 4, 2003, when Alto Paraná Police recovered all nine boxes of 

dynamite stolen from a quarry in Hernandarias, a town neighboring Ciudad del Este, over the 

previous weekend. Police observed members of a well-known gang formed by Brazilian and 

Paraguayan criminals hanging around the neighborhood where four individuals were arrested. 

Given the destructive potential of the material, which was powerful enough to destroy the 

Friendship Bridge, police believed that the explosives could have been sold to terrorists.89

Terrorist Fund-Raising in the TBA

Narcotics Trafficking 

A topic in itself, narcotics trafficking in the TBA, as it relates to the Lebanese Mafia, can 

only be briefly summarized here. It is clearly a major activity of the Islamic terrorist groups and 

organized crime syndicates operating in the region. With lax border controls and more than 100 

hidden airstrips in the region, the TBA has long been popular with contraband smugglers, 

gunrunners, and drug traffickers. A large number of small airplanes take off from clandestine 

airstrips in Paraguayan territory and enter Brazilian air space. Many of them also cross 

Argentina’s Misiones Province. The TBA is reportedly a conduit for the smuggling of some 

drugs through Argentina, Brazil, and Paraguay, which serve as transit countries for Andean 

cocaine (see Fig. 2, Drug-Trafficking Routes in the Tri-Border Area (TBA), Appendix).90 One 

route on the Bolivia-Paraguay-Brazil corridor goes through Ciudad del Este and Foz do Iguaçu to 

the ports of Paranaguá, Santos, and Rio de Janeiro on the Atlantic coast of Brazil.91

Despite the significant smuggling activity in the region, the TBA’s importance as a drugsmuggling conduit may have declined in recent years as a result of increased surveillance by 

security forces of the three TBA countries. The great majority of the cocaine smuggled out of 

Paraguay leaves the country through border towns to the north of the TBA (Pedro Juan Caballero 

89 “Police Recover Explosives, Robbers Arrested,” Vanguardia [Ciudad del Este], June 4, 2003, as translated by 

FBIS, Tri-Border Media Highlights, June 4, 2003 (FBIS Document ID: LAP20030604000111). 

90 U.S. Department of State, International Narcotics Control Strategy Report –2002. Washington, DC: Bureau for 

International Narcotics and Law Enforcement Affairs, March 2003, http://www.state.gov/g/inl/rls/nrcrpt/2002/html/ 

17952pf.htm. Paraguay is a transit country for between 40 and 60 metric tons of Colombian, Bolivian and Peruvian 

cocaine that traverses its territory destined for Argentina, Brazil, the United States, Europe, and Africa, according to 

the International Narcotics Control Strategy Report –2002, http://www.state.gov/g/inl/rls/nrcrpt/2002/html/ 

17944.htm. 

91 “Brasil,” http://www.ogd.org/rapport/gb/RP12_4_BRESIL.html. 
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and Capitán Bado) and to the south of the TBA (Posadas). Apparently for this reason, drugrelated border arrests at Puerto Iguazú have declined since 2000.92 Capitán Bado is a center for 

the production of marijuana and distribution of cocaine. The marijuana is transported to Brazil 

by land; most of the cocaine is flown in clandestine flights aboard small aircraft.93 Posadas is just 

across the Río Paraná from Encarnación, which has a large Arab population and is known as a 

main contraband center. 

Assad Ahmad Barakat under 

house arrest in Foz do Iguaçu

Source: ABC Color, December 

20, 2002. 

Despite the TBA’s relatively limited role as a drug-smuggling conduit, there is no 

question that narcotics trafficking remains a major activity in the region, and the Hizballah 

network and the Lebanese Mafia in general are heavily involved in it. Lebanese citizen Ali Assi 

was captured at Beirut’s airport with a 10-kilo shipment of cocaine in his two suitcases in May 

2002. Assi had recently taken charge of running a coffee shop in the Islamic Welfare Center in 

Ciudad del Este.94 Assi is the father-in-law of Ali Hassan 

Abdallah (also known as Ali Asan Abadia and “Alito”), who 

was, together with Assad Barakat, one of the principal 

coordinators of a Hizballah financial network in the TBA. Ali 

Hassan Abdallah had also been a trade partner in Ciudad del Este 

of convicted Hizballah figure Sobhi Mahmoud Fayad.95 In May 

2002, Ali Hassan Abdallah was considered a fugitive. By early 

March 2003, he had been expelled from Angola and was 

believed to be ordering electronic funds transfers (EFTs) to 

Islamic extremist groups in the Middle East through his nephew, 

Rayan Hussein Abdallah, in Ciudad del Este.96

 

92 Mendel, citing Gendarmería National, Escuadrón 13 'Iguazú': Estadísticas del funcionamiento del escuadrón 13 

'Iguazu'. Puerto de Iguazú, Argentina: Gendarmería National, September 2001. 93 Clarinha Glock, “Brazil-Paraguay: A Full Plate for Journalists,” Inter American Press Association, July 19, 2001, 

http://www.impunidad.com/atrisk/brasil_paraguay7_19_01E.html. 94 ABC Color [Internet version-www], May 28, 2002, as translated for FBIS, “Paraguay: Daily Reports More 

Evidence of Barakat's Contributions to Hizballah,” May 28, 2002 (FBIS Document ID: LAP20020528000073). 

95 Vanguardia [Ciudad del Este; Internet version-www], May 23, 2002, “Paraguay: Triborder Daily Says US Has 

Not Shown Evidence Against Alleged Terrorist,” May 23, 2002 (FBIS Document ID: LAP20020523000084); and 

“Paraguay: Lebanese Merchant Sought in Paraguay Expelled from Angola,” BBC Monitoring Americas – Political 

[London], March 14, 2003, citing ABC Color Website, March 14, 2003. 96 ABC Color [Internet version-www], March 14, 2003, citing "high-ranking" local police intelligence sources, in 

collaboration with their counterparts in Lebanon and the TBA, as translated by FBIS, “Paraguay Press Highlights,” 

March 14, 2003 (FBIS Document ID: LAP20030314000106); and ABC Color, March 13, 2003, as translated by 

FBIS, “Angola Ousts Lebanese Fugitive Linked to Hizballah From Paraguay,” March 13, 2003 (FBIS Document ID: 

LAP20030313000120). 
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l 

f 

ts. 

 

Hizballah and the Lebanese Mafia continue to use Foz do Iguaçu and Ciudad del Este as 

transit points for smuggling Colombian cocaine. The arrest of an alleged Lebanese Mafia 

ringleader in São Paulo in January 2003 exposed an operation that was moving between 400 and 

1,000 kilos of Colombian cocaine per month via Foz do Iguaçu, where it was then shipped to São 

Paulo.97 A prominent Lebanese businessman, Bassam Naboulsi, who resides in the TBA and is a 

cousin of Assad Ahmad Barakat, was arrested on January 29, 2003, in São Paulo, Brazil. Bassam 

Naboulsi was accused of ties with a group of drug traffickers, one of whose members, also 

residing in Ciudad del Este, was arrested in Beirut the week before.98 Bassam Naboulsi’s 

brother, Hassan Naboulsi, owns Hassan Internacional, located in Ciudad del Este’s Page 

shopping gallery. The operation led to the arrest of 14 men belonging to what the PF (Federa

Police) refers to as the “Barakat clan,” among them Akram Farhat, who is the brother-in-law o

well-known Ciudad del Este businessman Samir Jebai. PF authorities believe that this group, led

by Assad Barakat from within the Brasília prison, could be shipping cocaine to Middle Eastern 

and European marke

On May 10, 2003, Hassan Abdallah Dayoub, a Lebanese merchant who lives in Ciudad 

del Este, was arrested at Asunción’s Silvio Pettirossi Airport, while in possession of 2.3 kilos of 

cocaine hidden in an electric piano. High-ranking police sources connected with the investigation 

of Dayoub reportedly believe that his arrest constitutes overwhelming proof that Barakat’s 

Hizballah clan has a “wing of narcotraffickers.”99 This is because Dayoub is a cousin of Barakat. 

Investigators believe that Barakat himself hired Dayoub as a “mule” to market the drug in 

Damascus, Syria. Once in the Argentine capital, Dayoub intended to transfer to an Iberia flight to 

Madrid, whence he would proceed on to his final destination of Damascus. 

Other Fund-Raising Activities 

In addition to the estimated US$60 to US$100 million per year that it receives from Iran, 

Hizballah reportedly has also relied extensively on funding from the Shi'ite Lebanese Diaspora in 

97 Marcelo Godoy, O Estado de São Paulo [Internet Version-www], January 24, 2003, as translated by FBIS, 

“Brazil: Lebanese Mafia Members in São Paulo Arrested, Drugs Seized,” January 24, 2003 (FBIS Document ID: 

LAP20030124000070). 

98 “Brazilian Police Arrest Lebanese Citizen,” ABC Color [Internet version-www], January 30, 2003, as translated 

for FBIS, January 30, 2003 (FBIS Document ID: LAP20030130000073). 

99 ABC Color [Internet version-www], May 12, 2003, as translated by FBIS, “Paraguayan Police Make Arrest , 

Seize Cocaine From Tri-border Hizballah Head's Cousin,” May 12, 2003 (FBIS Document ID: 

LAP20030512000065). 
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West Africa, the United States, and most importantly the TBA.100 Islamic money laundering in 

the TBA is concealed by the common practice of the local Arab community of remitting funds to 

relatives in the Middle East. Some of these remittances are suspected of being directed to Arab 

terrorist organizations, particularly Hizballah.101 In late 2002, Argentine officials linked 

Lebanese terrorists in the TBA with money laundering, counterfeiting of U.S. dollars, and other 

illicit financial activities. As evidence, they cited “thousands of U.S. dollars bearing stamps from 

Lebanese currency exchange banks, tens of thousands of dollars in phony bills, and receipts from 

wire transfers made between the tri-border area and the Middle East.”102

Argentina’s Ramón Mestre, director of the Permanent Work Group (Grupo de Trabajo 

Permanente—GTP), founded to establish a coordinated common policy against terrorism in the 

countries that make up Mercosur (Common Market of the South), said in early December 2001 

that the TBA had given “logistical support to terrorist organizations by providing money to 

groups that operate in other parts of the world.” He said that activities such as the illegal traffic 

of immigrants and drug trafficking in the region “are elements that are in some way linked to 

terrorism....”103

Brazilian authorities have estimated that more than US$6 billion a year in illegal funds is 

laundered in the TBA. Every evening, a dozen armored trucks loaded with laundered money 

leave Ciudad del Este for Foz do Iguaçu, the Brazilian town on the opposite side of the border. 

Paraguay’s Finance Ministry issued an order in January 2003 to suspend sending of dollars 

abroad, but a reporter found that it was apparently not being applied to armored vans or trucks 

leaving the TBA. One van known to be was carrying reais and dollars was observed crossing the 

Friendship Bridge into Brazil on January 20, 2003.104

During the 1999-2001 period, Islamic extremist groups, specifically Hizballah and 

Hamas, received a total of between US$50 million and US$500 million from Arab residents of 

100 Blanca Madani, “Hezbollah's Global Finance Network: The Triple Frontier,” Middle East Intelligence Bulletin [a 

monthly publication of the United States Committee for a Free Lebanon] 4, no. 1 (January 2002). 

101 Bartolomé, 9. 102 Mike Boettcher, with Ingrid Arnesen, “South America's 'Tri-border' Back on Terrorism Radar,” CNN, November 

8, 2002, http://www.cnn.com/2002/WORLD/americas/11/07/terror.triborder/. 

103 El País [Montevideo], December 1, 2001, translated in “Uruguay Press Highlights,” December 3, 2001 (FBIS 

Document ID: LAP20011203000074). 

104 “Paraguay: Lack of Control System on Border with Brazil Allows Currency Flight,” BBC Monitoring Americas 

– Political [London], January 23, 2003, 1, citing ABC Color Web site, January 22, 2003. 
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Foz do Iguaçu through Paraguayan financial institutions.105 An investigation begun in September 

2001 also determined that a group of 42 Arabs in Ciudad del Este remitted abroad, mostly to 

Lebanon, approximately US$50 million, apparently during the 1997-2001 period. It is believed 

that these funds were derived from arms trafficking and other illicit activities.106 

Argentine police and regional security organizations in general have described the Page 

shopping center, located in Ciudad del Este, as the regional command post for Hizballah. They 

have also linked Barakat to a Brazilian mosque that the police also described as a central 

Hizballah meeting place.107 On September 12, 2001, a Paraguayan SWAT team raided Assad 

Ahmad Barakat’s closet-sized shop, Casa Apollo, in this arcade. Barakat, who was away on 

business, escaped arrest. The police confiscated more than 60 hours of videotapes and CDROMs that show military marches and attacks with explosives in various parts of the world.108

The confiscated material also included professional training courses for suicide bombers. The 

SWAT team also seized boxes containing financial statements totaling US$250,000 in monthly 

transfers to the Middle East and descriptions of at least 30 recent attacks in Israel and the Israelioccupied territories.109 The four principal individuals involved in the money remittance 

operations that were uncovered in September 2001 were Assad Ahmad Barakat and three of his 

principal Hizballah lieutenants in the Casa Apollo shop—Sobhi Mahmoud Fayad, Mazen Ali 

Saleh, and Salhed Mahmoud Fayad (Sobhi’s brother).110 Paraguayan prosecutor Carlos Cálcena 

noted that Barakat and Saleh sent money to international terrorist bank accounts in various 

countries. Specifically, they sent half a million dollars to Canada, Chile, and the United States 

(New York), and banks drafts of US$524,000 to Lebanon. Paraguayan Police found a letter from 

the Hizballah commander congratulating Barakat for financing activities in the Middle East.111

105 Roberto Cosso, “Extremistas receberam US$50 mi de Foz do Iguaçu” (Extremists Received US$50 million from 

Foz do Iguaçu), Folha de S. Paulo, December 3, 2001. 106 Bartolomé, 9, citing “Arabes envían US$50 milliones al exterior” [Arabs Send US$50 Million Abroad], October 

3, 2001. 

107 Jose de Cordoba, “Is Jungle Junction a Terrorist Hideaway?—In Nexus of Latin Nations Is Casbah...and More, 

Say the Local Police,” Wall Street Journal, November 28, 2001, A10. 108 José Maschio, “Paraguayan Court Evidence Cited on Hizballah Link at Triborder,” Folha de São Paulo [Internet 

version-www], November 26, 2001 (FBIS LAP20011126000074); and Stan Lehman, “Wanted by Paraguay, 

Hezbollah Supporter Is Free in Brazilian Town Across the Border,” AP, December 12, 2001. 109 Anthony Faiola, “U.S. Terrorist Search Reaches Paraguay; Black Market Border Hub Called Key Finance Center 

for Middle East Extremists,” Washington Post, October 13, 2001, A21. 110 Godoy, O Estado de São Paulo. 111 Ricardo Galhardo Enviado, “Paraguai pede a prisão de libanês no Brasil” [Paraguay Sentences a Lebanese in 

Brazil to Prison], O Globo, November 6, 2001. 
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d 

il 

 

Argentine police also claimed that Barakat was involved in distributing US$60 million in 

counterfeit U.S. dollars printed in Colombia.112

On October 2, 2001, Mazen Ali Saleh and Salhed Mahmoud Fayad, both in their 20s, 

were arrested in Ciudad del Este, in possession of documents indicating regular remittances of 

between US$25,000 and US$50,000 to suspected Muslim radicals. Both were linked to Assad 

Ahmad Barakat.

113

 The following day, Paraguayan police raided Casa Apollo for the second 

time in three weeks and this time arrested Barakat. Nevertheless, he escaped from prison and fle

to Brazil, where, as a Brazilian citizen, he was not considered to be a security threat, at least unt

June 22, 2002, when he was arrested at his home in Foz do Iguaçu and imprisoned in Brasília. 

Barakat’s business and Hizballah partner, Salman Reda, who fled jail on the same day in October 

2001 as Barakat, was charged in Argentina with transporting explosives used against the Israeli 

Embassy in Buenos Aires in 1992.114

Sobhi Mahmoud Fayad was arrested in Ciudad del Este in late October 2001, after the 

prosecutor’s office found documents at Barakat’s shop indicating that Fayad had transferred 

large sums of money to banks in Lebanon and Canada.115 Brazilian security agencies claimed 

that the financial aid offered in 2000 by groups in the TBA to Islamic and Middle Eastern 

terrorist organizations, such as Hizballah, Hamas, and the Islamic Jihad, totaled US$261 

million.116 Intelligence reports sent by Brazil to Paraguayan authorities between late 1999 and 

early 2000 reportedly mention three Hizballah leaders with whom Barakat allegedly met during 

trips to Lebanon that were at least annual.117

In late 2001, the Paraguayan intelligence services, which were collecting information on 

the activities of Lebanese citizens living in the TBA, reportedly found more evidence on how 

Barakat collected money for Hizballah. According to the evidence, he used blackmail and even 

112 Cordoba, Wall Street Journal. 113 “Government Keeps Watchful Eye on Paraguay’s Arab Community,” October 13, 2001, EFE News Services 

(FBIS Rec. No. OEF2C4F9D99922F0). 

114 Roberto Godoy, O Estado de São Paulo [São Paulo; Internet version-www], November 12, 2001, as translated 

for FBIS, “Brazil: Foreign Intelligence Agents Spying on Triborder Mosques,” November 12, 2001 (FBIS 

Document ID: LAP20011112000016). 

115 Kevin G. Hall, “Alleged Fund-Raiser for Hezbollah Arrested in Paraguay,” Night Ridder/Tribune News Service, 

November 1, 2002, K7344. 

116 Riyadh Alam-al-Din, "Washington Begins the War on Hizballah in the Border Triangle," Al-Watan al-Arabi

[Paris], December 21, 2001, 18–19, as translated for FBIS, “Report Says US Antiterror Campaign To Target 

Hizballah Network in S. America” (FBIS Document ID: GMP20011221000179). 117 Roberto Cosso, “Brazil: $50 Million Remitted to Terrorist Groups from Triborder Area,” Folha de São Paulo

[Internet version-www], December 3, 2001, as translated by FBIS, December 3, 2001 (FBIS Document ID: 

LAP20011203000110. 
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death threats to force other Lebanese citizens to contribute to the Muslim fundamentalist 

group.118 In 2001 a prosecutor in Ciudad del Este named Basilisa Vázquez Román investigated a 

US$100 million transfer from two Ciudad del Este bank branches to Lebanon. Vázquez Román 

told Brazilian media that 10 Lebanese citizens who own businesses in Ciudad del Este but live in 

Foz do Iguaçu sent the money through banks in Miami and New York to Lebanese banks.119

In addition to activities such as money laundering and drug trafficking, Barakat collected 

money for Hizballah by selling huge quantities of pirated software smuggled into the TBA from 

Hong Kong. At the end of 2001, Paraguayan agents confiscated, in the Chaco (a semi-arid region 

of Bolivia and Paraguay), a shipment of 5,000 pirated Nintendo CDs valued at US$160,000. The 

seizure uncovered a new route for pirated video games used by Barakat: one part of the shipment 

arrived by sea and another by air in the Chilean port city of Iquique, where Barakat has several 

businesses. From there, the merchandise was brought by land to the lower Chaco region, and sent 

to Barakat’s shop, Casa Apollo, in Ciudad del Este.120

Another raid on October 31, 2002, in Ciudad del Este, found 4,600 falsified CDs and 80 

copying machines capable of cloning up to 20,000 CDs per day in a clandestine lab operated by a 

Lebanese citizen known as “Samir.”121 The lab was located in the same building where 

Paraguayan authorities arrested Ali Khalil Mehri (see Mehri, Ali Khalil, Appendix) in his 

apartment in February 2000. Mehri was charged with piracy of computer programs and CDs and 

with selling millions of dollars of counterfeit software and funneling the proceeds to Hizballah. 

118 “Barakat Resorted to Blackmail To Get Money,” Última Hora [Asunción, an independent, centrist daily, 

occasionally critical of the government, strongly anti-Oviedo], December 6, 2001, as translated for FBIS, “Report: 

Media on Efforts to Combat Terrorist Financial Activity in Triborder Area,” December 10, 2001 (FBIS Document 

ID: LAP20011210000096). 

119 ABC Color, December 5, 2001, as translated for FBIS, “FBIS Report: Media on Efforts to Combat Terrorist 

Financial Activity in Triborder Area,” December 10, 2001 (FBIS Document ID: LAP20011210000096). 120 This incident is reported in ABC Color [Internet version-www], May 27, 2002, as translated for FBIS, “Paraguay: 

Authorities Uncover New Route Used by Hizballah Leader Bakarat,” May 27, 2002 FBIS Document ID: 

LAP20020527000062). 

121 The Ciudad del Este Chamber of Commerce [http://www.pamcham.com.py/mem-cde.html] lists Samir Ali Jaber 

as the owner of Centro de Pioner Import Export, an electronics business located in the Hijazi Shopping. Center [tel: 

(595) 61 512-321 511-085 502-212; Fax: (595) 512321; e-mail: pioneer@newnet.com.py. However, confirmation 

that the arrested “Samir” and Samir Ali Jaber are one and the same individual is lacking. Also see “Arab Merchant 

Sells ‘Incinerated’ CD’s,” Vanguardia [Ciudad del Este], February 6, 2003, as translated for FBIS, “Highlights 

From the Tri-Border Press for the Week 3-7 February,” February 11, 2003 (FBIS Document ID: 

LAP20030211000124); and “Allegedly Incinerated CD's Sold in CDE,” Vanguardia [Ciudad del Este], January 31, 

2003, as translated for FBIS, “Tri-Border Press for the Week of 23-31 January,” Tri-Border Press Highlights, 

February 4, 2003 (FBIS Document ID: LAP20030204000134). 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

31

 

Barakat’s fund-raising activities even reportedly included complicated swindling schemes 

together with Ali Hussein Abdallah (“Ali Tawil”). The two would use a new modus operandi in 

which modest imports of goods from Asia were established over time.122 Once confidence was 

gradually gained with the importers, stings were done to the detriment of the wholesale 

merchants, who were cheated out of containers of merchandise valued at multimillion dollar 

sums. 

TBA-Related Violence Against Local Officials 

The governments of the three TBA countries and local TBA officials often emphasize 

that terrorism is not a problem in the region. For example, during the Third American 

Conference Against Terrorism, which met in El Salvador on January 22-24, 2003, 

representatives from Argentina and Brazil emphasized that no terrorist activity or dormant cells 

had been detected in the TBA.123 TBA-based Islamic terrorist groups are not known to engage in 

acts of international terrorism within the TBA, which lacks high-profile targets other than foreign 

tourists visiting Iguaçu Falls. 

However, unidentified groups have been carrying out unclaimed mafia- or Colombianstyle attacks against local officials interfering in their fund-raising activities or against business 

people refusing to pay a “war tax,” which is used in financing terrorist operations in various parts 

of the world. Many businessmen in the TBA reportedly pay what amounts to a war tax to the 

armed Arab groups in the region.124 Others pay extortion to mafia groups. A number of 

businessmen who have refused to pay have been murdered. In one case, Armando Kassen, a 

Lebanese citizen who was president of the Paraguayan Arab Chamber of Commerce, fled to 

Beirut after being convicted of murdering a Ciudad del Este businessman, Ussein Mohamed 

Taiyen, who was president of the Ciudad del Este Chamber of Commerce.125 On November 2, 

2001, Hizballah leaders in the TBA, reportedly concerned not only about losing members and 

122 “Barakat Held in Same Prison as “Beira Mar” Drug Smuggler,” ABC Color, June 24, 2002, as translated by 

FBIS, “Paraguay Press Highlights,” June 24, 2002 (FBIS Document ID: LAP20020624000088). 

123 Horacio Verbitsky, Pagina/12 [Buenos Aires; Internet version-www], January 26, 2003, as translated for FBIS, 

“Argentine Bill To Empower Military To Fight Domestic, Foreign Terrorism Viewed,” January 26, 2003 (FBIS 

Document ID: LAP20030126000047). 

124 “Brazil: Report on Islamic Terrorism in Iguazu Triangle,” al-Watan al-'Arabi [Paris], January 9, 1998, 22–24, as 

cited by Estado de São Paulo. 125 “Mastermind of Taiyen's Murder Residing in Beirut,” Vanguardia [Ciudad del Este], November 11, 2002, as 

translated for FBIS, “Highlights: Brazil - Paraguay Triborder Press 4-15 Nov 02,” November 21, 2002 (FBIS 

Document ID: LAP20021121000006). 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

32

 

influence to al Qaeda, but also about pressure being increasingly applied on them by security 

forces in the region, issued a fatwa authorizing the use of physical violence against traitors or 

enemies of the jihad.126

More recently, on October 21, 2002, local mafia organizations involved with smuggling 

and piracy activities in the TBA sent a clear message of their power beyond the region to 

Uruguayan Customs Director Víctor Lissidini.127 The TBA Mafia made telephone threats to 

Lissidini before he was shot at in his car by four armed gunmen on two motorcycles, in reprisal 

for the confiscation of a batch of counterfeit merchandise bound for Ciudad del Este.128 The 

constant seizure of pirate merchandise by authorities in Uruguay apparently provoked the attack. 

Prior to the attack on his car, mafia operating out of Ciudad del Este and involved with 

smuggling and pirating CDs and possibly financing Islamic terrorist groups made cellular phone 

threats to Lissidini and his subordinates. The callers specifically demanded that 2 million 

confiscated blank CDs belonging to the Piscis Import-Export Company located in Ciudad del 

Este be released.129 In another example, on February 24, 2003, two men riding a motorcycle in 

downtown Foz do Iguaçu shot and seriously wounded the president of the Foz do Iguaçu City 

Council.130 It was unclear whether the perpetrators were linked to a particular ethnic group. 

Clandestine Terrorist Communications in the TBA 

There have been open-source indications that the Islamic terrorist network in the TBA 

has maintained telephone communications with operatives worldwide, including in the United 

States. The FBI reportedly traced several telephone calls between the United States and at least 

one of the TBA cities immediately following the September 11, 2001 terrorist attacks. Whether 

126 Útima Hora, November 5, 2001, as translated for FBIS, “FBIS Report: Media on Efforts to Combat Terrorist 

Financial Activity in Triborder Area,” December 10, 2001 (FBISDocoument ID: LAP20011210000096). 

127 “Ciudad Del Este Linked To Customs Director Attack,” Uruguay Radio Parque [Ciudad del Este], November 26, 

2002, as translated for FBIS, “Brazil-Paraguay Triborder Press Highlights: November 25–29, 2002, December 3, 

2002 (FBIS Document ID: LAP20021203000105). 

128 “Justicia investiga atentado” [Justice Investigates Attack], El País [Montevideo], November 21, 2002; and 

“Atentado a la colombiana contra vehículo de Lissidini” [Colombian-Style Attack Against the Car of Lissidini], La 

República en La Red, November 21, 2002, 12. 129 “Threats to Lissidini Possibly Linked to Terrorism,” La República [Montevideo; unofficial newspaper of 

Uruguay's largest political party, the leftist Broad Front; Internet version-www), November 21, 2002, as translated 

by FBIS, November 21, 2002 (FBIS Document ID: LAP20021121000104). 

130 “Foz City Council President Shot in Attack,” Itapiru Radio “Segunda Entrega de Noticias” newscast [Ciudad del 

Este], February 24, 2003, as translated for FBIS, “Tri-Border Radio Highlights 24 Feb 03,” Radio Parque [Ciudad 

del Este], February 24, 2003 (FBIS Document ID: LAP20030226000042). 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

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Islamic terrorists in the TBA played any role in the September 11 attacks in the United States is 

not known. Some al Qaeda operatives in the TBA may have known in advance about the 

September 11 attacks and discussed the plot in a mosque in Foz do Iguaçu. At least this is the 

contention of a Moroccan student, Gueddan Abdel Fatah, 27, who was arrested in early 

September 2001 in Brazil. Fatah maintains that he overheard Islamic extremists discussing the 

September 11 al Qaeda attacks against New York and Washington at a mosque in Foz do Iguaçu 

a week before the attacks took place. Brazilian press reports indicate that he contacted an 

attorney visiting his prison on September 5, 2001, and asked them to “urgently” deliver a letter to 

Brazilian, U.S., and Israeli authorities to warn them about an impending attack with “two 

explosions” that could take place in the United States.131

In 2001-02, Islamic terrorist groups reportedly were using the TBA as part of a 

clandestine communications network using a system known as PABX, which is designed to 

evade eavesdropping on telephone conversations by spy satellites by connecting various 

telephone networks. Calls from Saudi Arabia to Brazil, or from Brazil to Pakistan, for example, 

could be made without raising suspicions. In 2000 the Brazilian Police reportedly detected at 

least six clandestine communication bases near Foz do Iguaçu that were being used for making 

and receiving telephone calls to and from the Middle East and Afghanistan.132 Before the 

September 11 attacks in the United States, Brazilian investigators were suspicious of what was 

thought to be merely illegal schemes to reduce the price of telephone calls. After September 11, 

however, suspicions shifted to possible terrorist links because the illegal calls went to countries 

like Afghanistan, Pakistan, and Lebanon. 

Concerned about what it considered to be the action of Islamic extremist cells in the 

TBA, Brazil’s PF began to operate under cover in the region. Within weeks, the PF discovered 

various clandestine telephone exchanges suspected of links with Islamic extremism.133 In 2002, 

131 John Daly, “The Suspects: The Latin American connection,” Jane’s Terrorism & Security Monitor, October 1, 

2001. 

132 Mario Daniel Montoya, “War on Terrorism Reaches Paraguay’s Triple Border,” Jane’s Intelligence Review 13, 

no. 12 (December 2001): 13. 

133 Expedito Filho and Sílvio Ferreira, with Patrícia Cerqueira, “Rede de clandestinidade” [Clandestine Network], 

OnlineÉpoca Editora Globo], No. 179, October 22, 2001; João Naves de Oliveira, “Central telefônica leva três à 

prisão em MS” (Telephone Exchange Takes Three to Prison in MS), Estado.com.br, October 12, 2001; and “Árabes 

teriam financiado centrais telefônicas piratas no PR” (Arabs Had Financed Pirated Telephone Exchanges in PR), 

Estadao.com.br, terra.com.br, October 11, 2001. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

34

 

the Brazilian police closed a dozen telephone switching operations in Foz do Iguaçu and in other 

nearby cities that could have been used to evade U.S. satellites monitoring telephone traffic.134

While living in Foz do Iguaçu in 1999-2001, Lebanese businessman Afif Najib Eid 

contracted operators of the equipment for clandestine telephone switching operations.135 Eid, 

who owns an electronic products store in Ciudad del Este, migrated from Lebanon to Foz do 

Iguaçu in 1989. Phone records indicate that much of the traffic involved countries such as 

Afghanistan, Pakistan, and Saudi Arabia.136 In late 2001, police in Foz do Iguaçu arrested at least 

one of the clandestine operators, a Lebanese named Muhamed Hassan Atwi and a Brazilian 

named Paulo César Caramori. Atwi was suspected of operating the illegal telephone services in 

Paraná State and another in Rio de Janeiro. In the apartment used by the two men, police found a 

computer and false passports (see Hassan, El Hadi Haha Mohamad).137

TBA-Linked Islamic Terrorist Activities Elsewhere in the Southern Cone

The TBA’s Islamic extremist and organized crime networks cannot be examined in 

isolation because they are linked to wider networks in the Latin American region and the world 

in general. Moreover, Islamic extremists who had been based in the TBA have been spreading 

out and establishing new support networks, apparently in places also popular with organized 

crime groups. In late 2002, unidentified TBA intelligence officials commented about two trends 

regarding the movements of Islamic extremists who had been based in the TBA.138 It was noted 

that these extremists were dispersing to smaller towns within the region. For example, they had 

been seen in towns such Uruguaiana, a Brazilian town on the border with Argentina south of 

Ciudad del Este; Cascavel in Brazil’s Ceará State; and Pedro Juan Caballero in Paraguay, 

renowned for its potent marijuana crops and scarcity of police.139 The TBA’s Islamic extremists, 

like mafia members and corrupt officials, also are being attracted to the money-laundering 

centers along the 1,290-kilometer-long Brazil-Paraguay border. These include, in Brazil, Ponta 

134 Larry Rohter, “South America Region Under Watch for Signs of Terrorists,” New York Times, December 15, 

2002, 1A, 32. 

135 “O terror por aqui” (The terror at Home), OnLine Epoca, O Globo.com, No. 179, October 22, 2001. 136 Larry Rohter, “South America Region Under Watch for Signs of Terrorists,” New York Times, December 15, 

2002, 1A, 32. 

137 Rohter, New York Times. 138 Larry Rohter, “South America Region Under Watch for Signs of Terrorists,” New York Times, December 15, 

2002, 1A, 32. 

139 Rohter, New York Times. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

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Porã and Coronel Sapucaia in Mato Grosso do Sul State, as well as Cascavel; and, in Paraguay, 

Pedro Juan Caballero and Capitán Bado.140

Intelligence officials also noted that Islamic extremists were branching out into nearby 

countries with established Arab or Muslim communities, such as Iquique, Chile; Guayaquil, 

Ecuador; and Maracaibo, Venezuela. There are also indications that Islamic extremists are also 

moving to São Paulo. As a result of increased security measures implemented in the TBA in the 

1999-2002 period, a so-called “second tri-border area” was reportedly developing in the region 

between Brazil, Bolivia, and Peru.141

Chuy, Uruguay, and Chuí, Brazil

A month after the bomb attack against the AMIA building in Buenos Aires in July 1994, 

Brazilian government suspicion began focusing on the city of Chuí in the southern part of Brazil, 

at the border with Uruguay. Chuí is the other half of Chuy, which is on the Uruguayan side. It is 

easy to reach Buenos Aires from Chuí by sea, thereby avoiding border controls. The city has a 

total of about 1,500 Arab residents. 

In about 1994, a Hizballah network reportedly was initially detected using the Chuí zone 

as a point of distribution of military weapons such as M-16 and AR-15, grenades, and rocket 

launchers.142 These groups undoubtedly are linked to those in the TBA. More recently, in 2001, 

Uruguayan investigations uncovered a cocaine trafficking operation in Chuy that was linked to 

140 Clarinha Glock, “Brazil-Paraguay: A Full Plate for Journalists,” July 19, 2001, Inter American Press Association 

[http://www.impunidad.com/atrisk/brasil_paraguay7_19_01E.html], citing PF (Federal Police) reports; and Pedro 

Oviedo, “En la Triple Frontera se lavan doce mil millones de dólares al año del narcotráfico, según un informe 

official” [In the Triple Border US$12 billion Is Laundered Per Year From Narcotics Trafficking, According to An 

Official Report], www.MisionesOnLine.net, no. 745, July 8, 2001, http://misionesonline.net/paginas/action.lasso?-

database=noticias3&-layout=web&-response=noticia.html&id=11349&autorizado=si&-search, citing Dr. Guido 

Rauber Lavado de Dinero: Triple Frontera—Work Paper No 1, Prevención de Adicciones y Control de Drogas 

[Subsecretary of Drug Control and Prevention of Addictions], Ministry of Public Health of Misiones Province, 

Argentina, updated version of December 31, 2000 (original date, August 2, 1999). 141 Marcio Aith, Folha de São Paulo [São Paulo; Internet version-www], November 8, 2002, as translated for FBIS, 

“Argentine Intelligence Chief Says Terrorism Seeking New 'Tri-border' Area,” November 8, 2002 (FBIS Document 

ID: LAP20021108000025), citing Miguel Angel Toma, chief of Argentina’s Secretariat for State Intelligence 

(Secretaría de Información del Estado—SIDE), in response to a telephone interview question. 142 Brazilian Officials Warn Uruguay About Islamic Groups at Border,” September 1, 1994, 16 (JPRS-TOT-94-036-

L). 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

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the Arab and Lebanese Mafias. A Brazilian Federal Police document reportedly states that, “The 

money obtained from the sale of the product would be used to finance international terrorism.”143

The Chuí connection to the TBA came into clearer focus in 2001, when a Lebanese 

named Al-Sa'id Ali Hasan Mukhlis (also spelled Mokhles) was identified as having contacts with 

Saudi Arabian members of a group of Osama bin Laden militants in the TBA (see Mukhlis, El 

Sa’id Hassan Ali Mohamed (al-Gama’a al-Islamiyya), Appendix). The mayor of the Brazilian 

border town of Chuí, Mohammed Kasim (also spelled Kassem) Jomaa (“Mohamed Yoma”), 

allegedly helped al Said Hassan Hussein Mukhlis’ family after Mukhlis was arrested in Chuí on 

February 27, 1999, following a call by the CIA to detain him on charges of having participated in 

the Luxor terrorist attack.144 Mayor Jomaa has been described as the presumed chief of the 

emerging “Arab Mafia,” an organization involved in arms and drug trafficking, money 

laundering, and exploitation of undocumented workers.145

Iquique, Chile 

Islamic terrorist ties are believed to exist between the TBA and Iquique in Chile.146

Iquique is an attractive location for Islamic money launderers and smugglers operating in the 

TBA. The attraction is partly explained by the fact that Chile has become the fastest-growing hub 

in South America after Brazil for international narcotics transshipments and money-laundering 

enterprises.147 In addition, as pressure from security authorities has increased in the TBA, a 

number of Islamic militants reportedly have moved to Iquique. 

On November 8, 2001, the Chilean government confirmed that it was investigating an 

alleged Arab financial network with terrorist links that may be engaging in money laundering in 

Iquique, Chile.148 It involved Assad Ahmad Barakat and his fellow countryman Kalil Saleh, who 

143 Sérgo Gobetti, “PF investiga ligação de prefeito con Bin Laden” (PF Investigates Mayor’s Links with bin 

Laden”), Oestadao.com.br, September 12, 2001. 

144 John Daly, “The Suspects: The Latin American connection,” Jane’s Terrorism & Security Monitor, October 1, 

2001. 

145 Enrique Medeot, “El alcalde brasileño que jura no ser amigo de Bin Laden” (The Brazilian Mayor Who Swears 

That He Isn’t A Friend of bin Laden), Clarín.com, September 16, 2001; and New York Times, September 27, 2001 146Fernando Tejeda and Javier Méndez, “Nexo entre la Triple Frontera e Iquique” [Nexus between the Triple 

Frontier and Iquique], El Mercurio [Santiago], October 13, 2001, http://www.emol.com/noticias/detalle/ 

detalle_diario.asp?idnoticia=0113102001001A0050001. 

147 “New Drug Gangs Spreading in Colombia,” The Global Intelligence Report (Stratfor), April 3, 2002, citing El 

Tiempo. 148 Estrategía [a Santiago financial daily, Internet version-www], November 9, 2001, as translated for FBIS, “Chile 

Confirms Alleged Terrorist-Linked Financial Network Under Investigation,” November 9, 2001 (FBIS Document 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

37

established two import and export firms in Iquique in early June 2001. Investigators confirmed 

that the money allegedly laundered in Iquique came from Ciudad del Este, and that Barakat’s 

businesses were being used as fronts. The amount laundered was estimated to be several million 

dollars. 

OTHER ORGANIZED CRIME ACTIVITIES IN THE TBA

Sacoleiros (bag carriers) carry contraband, 

such as cigarettes and fake watches, across 

the Friendship International Bridge. 

Source: Página/12.com.ar, October 30, 2001. 

As suggested in the earlier discussion of TBA-related violence against local officials, 

Islamic terrorist group activities in the TBA and organized crime activities in the region often 

cannot be distinguished clearly. In the case of Hizballah, for example, the distinction between 

Hizballah and the Lebanese Mafia is not at all clear based on the limited amount of material 

covered in this study. If Hizballah and the Lebanese Mafia are not interconnected, then they 

probably at least cooperate closely. In addition to unclaimed acts of occasional violence against 

business people and local officials, the Islamic terrorist groups and organized crime groups in the 

region engage in illicit activities such as drug and arms trafficking, money laundering, and 

product piracy. Instead of always pursuing these 

activities separately, however, the Islamic 

terrorist groups and organized crime groups in the 

TBA may collaborate whenever collaboration 

better serves their mutual interests. Examples of 

this reported collaboration in the TBA include 

Hizballah’s ties with groups such as the Hong 

Kong Mafia and the Argentine “Local 

Connection,” al Qaeda’s ties with the Chechen 

and Chinese mafias, and the Egyptian al-Gama’a 

al-Islamiyya’s ties with the Chinese Mafia. 

In addition to Islamic terrorist groups and organized crime groups, a third type of group is 

found in the TBA: corrupt government or security force officials. Corruption at all levels of 

 

ID: LAP20011109000089); “Chilean Police Investigate Terrorist Financial Network,” Santiago Times, January 8, 

2002; and Héctor Rojas and Pablo Vergara, La Tercera de la Hora [Santiago; a conservative, pro-business, topcirculation daily, Internet version-www], November 8, 2001, as translated for FBIS, “Chilian Police Examine Link 

to Alleged Triborder Hizballah Financial Network,” November 8, 2001 (FBIS Document ID: 

LAP20011108000085). 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

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government allows the Islamic terrorist and organized crime groups to operate in the TBA and 

elsewhere in the TBA countries with considerable impunity (see TBA-Related Governmental 

Corruption). 

Indigenous Organized Crime Groups

Argentina 

Organized crime in Argentina reportedly is in an incipient stage and is regional rather 

than international in scope, thriving on the socioeconomic and political conditions prevalent in 

the country.149 Furthermore, the only form of organized crime in Argentina that is linked to 

international cartels is said to be drug trafficking, although the narcotraffickers also traffic in 

children and women; smuggle and market stolen cars; and engage in tax evasion, embezzlement, 

fraud, insider trading, and financial swindles.150 The TBA is of particular concern to the 

Argentine government in this regard because it serves as a gateway for organized crime to 

migrate south into the rest of the country. 

The Islamic fundamentalists in the TBA reportedly are closely linked to a growing mafia 

in Argentina that provided important assistance in the 1992 bombing of the Israeli Embassy in 

Buenos Aires and the 1994 bombing of a Jewish community center (AMIA) in that capital. As 

the economic and political crisis in Argentina continued in 2002, a criminal group known as 

“Local Connection,” made up of corrupt politicians and former members of the military regime, 

was reportedly prospering.151 As a result of its unique organizational relationship between 

common criminals and public figures, the Local Connection, unlike other Argentine gangs, has 

enjoyed impunity. It reportedly controls much of what are now major industries in Argentina, 

including arms and drug trafficking, kidnappings, and Argentina’s flourishing industry of 

dismantling stolen cars for spare parts. The Local Connection is organized like the Italian Mafia 

in small units, or families, linked to a boss, generally a corrupt police official or someone who 

served in the military regime. Its members are linked to the fundamentalist Islamic movements 

149 Hugo Antolin Almiron, “Organized Crime: A Perspective from Argentina.” Chapter 14 in Jay S. Albanese, Dilip 

K. Das, and Arvind Verma, eds., Organized Crime: World Perspectives (Upper Saddle River, New Jersey: Prentice 

Hall, 2003), 320. 

150 Almiron, 329. 151 This paragraph is based entirely on Carlos Wagner, special envoy in Buenos Aires, Zero Hora [Porto Alegre], 

November 10, 2002, as translated by FBIS, “Brazil: Argentine Crime Group “Local Connection” Said To Have Ties 

to Terrorists in Tri-Border,” November 10, 2002 (FBIS Document ID: LAP20021111000047). 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

39

 

that are active in the TBA. The Connection bosses use code names when contacting the 

fundamentalists in Foz de Iguaçu and Ciudad del Este. 

In late 2001, a change of strategy in arms trafficking reportedly took place amid the 

political and economic crisis that overtook Argentina.152 Until then, the Local Connection was 

involved only in big arms deals, such as providing military equipment to groups fighting civil 

wars, but in late 2001 it began to sell contraband. Since then, Argentina reportedly has been 

taking the place of Paraguay in smuggling weapons into Brazil, even arms used exclusively by 

the Argentine armed forces. 

Paraguay

Families that began smuggling activities in the TBA, particularly the Morel family, have 

developed ties with international mafias and have acquired increasing political power and 

influence in other regions of Paraguay. The Morel clan began a war with the organization of Luiz 

Fernando da Costa (“Fernandinho Beira-Mar”), when he moved into the Paraguayan border 

region with Brazil after escaping from prison in March 1997. The two Morel brothers were killed 

in January 2001, and the clan’s patriarch was killed in a Brazilian jail a week later, reportedly at 

the orders of Beira Mar.153 The Paraguayan drug families have branched out into lucrative 

activities such as arms trafficking, mainly to supply organized crime groups in Brazilian cities. 

Elvio Ramón Cantero Aguero, based in Pedro Juan Caballero, heads one criminal organization 

operating in the Ciudad del Este area.154

Brazilian and U.S. officials generally consider former General Lino César Oviedo to be 

head of the so-called Paraguay Cartel. He reportedly has amassed at least US$1 billion, including 

numerous properties in the TBA.155 At the time of his arrest in June 2000, Oviedo was using Foz 

do Iguaçu and Ciudad del Este as a base of operations for laundering money. 

152 Wagner, “Local Connection.” 153 Mike Ceaser, “Libre comercio de drogas” [Free Trade of Drugs], Noticiasaliadas.org, November 15, 2002, 

http://www.lapress.org/Summ.asp?lanCode=2&couCode=19. 

154 “Tri-Border Press Highlights,” December 2-6, 2002, as translated for FBIS, December 12, 2002 (FBIS Document 

ID: LAP20021212000099); Cesar Palacios and Oscar Florentín, Noticias [Asunción], December 6, 2002, as 

translated for FBIS, “Paraguay: Police Confiscate Arsenal from Gangster's Home,” December 6, 2002 (FBIS 

Document ID: LAP20021206000030). 

155 This paragraph is based entirely on “El Caso Lino Oviedo y su conexión con la Argentina” [The Lino Oviedo 

Case and Its Connection with Argentina], Página12 [Buenos Aires], 2001, citing an Argentine Chamber of Deputies 

report on money laundering, http://www.pagina12.com.ar/2001/suple/carrio/cap11.pdf. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

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Non-Indigenous Organized Crime Groups 

Crime syndicates from China, Colombia, Corsica, Ghana, Italy, Ivory Coast, Japan, 

Korea, Lebanon (see Islamic Terrorist Group Activities in the TBA), Mexico, Nigeria, Russia, 

and Taiwan are known to have operated in the TBA. A number of these groups are reportedly 

associated with corrupt Paraguayan business executives, politicians, and military officers tied to 

the ruling Colorado Party.156 They even reportedly control some news media directors.157 The 

influence in the TBA of non-indigenous organized crime networks reportedly is strengthening. 

These groups are active in Paraguay and along the drug-trafficking route from Colombia to the 

United States and Europe. Most of these clandestine operations reportedly take place in Ciudad 

del Este, which is considered a regional center for drug trafficking and arms smuggling. The 

transactions mostly involve bartering drugs for weapons from Colombian armed rebel groups.158

The Colombian, Italian, and Nigerian mafias have been singled out as the main 

transnational mafias operating in Brazil, but without headquarters in that country.159 Brazil’s 

Federal Police reported in late 1999 that the Nigerian Mafia operates in various Brazilian cities, 

including Foz do Iguaçu.160 According to Uruguayan authorities, these and other principal 

organized crime groups, including the Japanese yazuka (the Japanese word for gangsters) all 

have a presence in Ciudad del Este, where they have an established criminal structure that is 

linked to international terrorism.161 However, if the Italian and Nigerian mafias are active in the 

TBA there does not appear to be much news media reporting on their activities in the region. 

The Chinese 

The cultural and social demographics of Ciudad del Este make it an ideal city for the 

operations of Chinese-speaking criminal groups. In the 1990s, Chinese mafias such as Fuk 

156 Jack Sweeney, “DEA Boosts Its Role in Paraguay,” Washington Times, August 21, 2001. 157 “Dicen que directores de medios están vinculados con la mafia” [Some Media Directors Are Said To Be Linked 

to the Mafia], ABC Color [Paraguay], April 3, 2002, http://www.una.py/sitios/abc. 158 Riyadh Alam-al-Din, "Washington Begins the War on Hizballah in the Border Triangle," Al-Watan al-Arabi

[Paris], December 21, 2001, 18–19, as translated for FBIS, “Report Says US Antiterror Campaign To Target 

Hizballah Network in S. America” (FBIS Document ID: GMP20011221000179). 159 Ruy Gomes Silva, Effective Measures to Combat Transnational Organized Crime in Criminal Justice Processes, 

December 2001, 165. 

160 O Estado de Sao Paulo [Internet version], November 23, 1999, as translated by FBIS, “Federal Police Links 

Local Companies With Nigerian Mafia,” November 23, 1999 (FBIS Document ID: FTS19991123001608). 

161 “Ciudad del Este: Centro internacional de mafias, a una hora de vuelo de Uruguay” [Ciudad del Este: 

International Mafia Center, A One-Hour Flight from Uruguay], La Onda Digital, September 25, 2001, 

http://www.uruguay.com/laonda/LaOnda/Entrevistas/Diputado%20Alberto%20Scavarelli.htm. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

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Ching, Big Circle Boys, Flying Dragons, and Tai Chen, mostly from mainland China, established 

a presence in Ciudad del Este in order to profit from the city’s Asian imports.162 They are 

considered by authorities to be especially dangerous because they are young groups that do not 

follow traditional rules, such as staying in their own world and not bothering authorities or 

diplomats.163

Some of these Chinese mafias are called Triads; they specialize in providing “protection” 

to local Chinese business people and in imposing “taxes” on the containers imported by the 

Chinese businesses from Asia. When the mafia directly imports goods from Asia, the Chinese 

business community is obligated to purchase that merchandise, or suffer the consequences of not 

doing so.164 As of 2000, at least six Chinese Triads existed in the TBA and were vying for the 

7,000 Chinese businesses in Ciudad del Este, from whom they collect up to US$30,000 a month 

by exporting “protection” money.165 These groups reportedly originated in Hong Kong, 

Mainland China, and Taiwan.166

These groups can be summarized as follows: 

 The members of the "Fuk Ching" (also spelled "Fuchien" or “Fu Chin”) Triad came 

from China during the Stroessner regime.167 They are headed by A. Sahi o Sain 

("Mayo") or Feng Cheng Cui. In 2000 this was the most powerful group and 

consisted of 30 assassins of between 20 and 30 years of age, who also were operating 

in Foz do Iguaçu.168 Fuk Ching monopolizes the umbrella market in the TBA.169

 "Pac Lun Fu" dominates electronics contraband and athletic items in the TBA. It is 

supported by Brazilian and Paraguayan delinquents who specialize in extorting 

“protection” money. Anyone who refuses to pay is likely to be murdered. 

162 Rotella. 163 Rotella. 164 Bartolomé, 7, citing XIV Seminario de Fronteras: Los Desafios a la Seguridad y Delitos del Siglo XXI, Escuela 

Superior de Gendarmería, Buenos Aires, 1996, 13–16. 

165 Tripartitite Command of the Three Borders, Base de Datos SER en el 2000 [Regional Strategic Sercurity 

Database in 2000], http://www.ser2000.org/protect/docs-sobresalientes/triplef.htm. 

166Rotella, citing Paraguayan police archives. 167 For background, see James O. Finckenauer, “Chinese Transnational Organized Crime: The Fuk Ching,” 

(undated) National Institute of Justice International, U.S. Department of Justice, http://www.ojp.usdoj.gov/nij/ 

international/ctoc.html, citing Chin, Ko-lin, Chinatown Gangs (Oxford: Oxford University Press, 1996). 168 Tripartitite Command. 169 “Taiwanese Mafia Boss Arrested,” Vanguardia [Ciudad del Este], November 28, 2002, as translated for FBIS, 

“Brazil-Paraguay Triborder Press Highlights: November 25–29, 2002,” December 3, 2002 (FBIS Document ID: 

LAP20021203000105). 
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 The "Tai Chen Saninh” Group originated in Hong Kong. It has been fighting to 

displace the other Triads in the TBA.170 A Tai Chen boss in Ciudad del Este was shot 

to death in 1998 after attempting to extort US$200,000 from a Taiwanese immigrant 

building an industrial park in the city.171

 The "Continental" Group has been seeking to control the wall-clock market in the 

TBA. 

 Along with the Chinese Triads and the Japanese yakuza, the Big Circle Boys is one of 

the most prominent types of groups involved in Asian-based transnational crime.172

Big Circle Boys (Dai Huen Jai, or BCB) is a loosely affiliated group of gangs 

operating independently and cooperating only when necessary. Although not a Triad, 

the BCB’s operations are considered to be nearly as sophisticated as those of the 

Triads. BCB members are active in drug trafficking, migrant smuggling and largescale credit card forgery and fraud. BCB is believed to be working with a variety of 

transnational crime syndicates, including the Russian/Eastern European Mafia, and 

outlaw motorcycle gangs.173

 The Flying Dragons appears to be an affiliate of the same overall organization as New 

York’s Flying Dragons, a vicious Chinese street gang, which is the enforcement 

sector of the Hip Sing Triad, a Fukienese Triad.174

Although the Chinese Mafia in the TBA is characterized by internecine rivalries, it is 

known to collaborate with the Islamic terrorist groups in the region. At least two organizations—

the Sung-I and Ming families—have engaged in illegal operations with the Egyptian al-Gama’a 

al-Islamiyya.175 The Sung-I family, which is based in the Paraguayan town of Hernandárias, 

used three photography and electronic businesses located in Ciudad del Este as fronts for its 

170 Tripartitite Command. 171 Rotella. 172 Canadian Security Intelligence Service (CSIS), “Transnational Criminal Activity,” November 1998, 

http://www.fas.org/irp/threat/back10e.htm. 

173 For additional information, see Criminal Intelligence Service Canada (CSIS), “Asian-Based Organized Crime,” 

1998, http://www.cisc.gc.ca/AnnualReport1998/Cisc1998en/asian98.htm. 

174 Amy O'Neill Richard, “International Trafficking in Women to the United States: A Contemporary Manifestation 

of Slavery and Organized Crime,” An Intelligence Monograph of the Director of Central Intelligence (DCI) 

Exceptional Intelligence Analyst Program, Center for the Study of Intelligence, Central Intelligence Agency, April 

2000, U.S. Department of State Web site, http://usinfo.state.gov/topical/global/traffic/report/homepage. 

htm#contents, based on interview with INS, New York, May 1999. 

175 Bartolomé, 8; and ABC Color, February 24, 2003, as translated by FBIS, “Chinese Mafia Linked to Islamic 

Fundamentalists,” in “Paraguay Press Highlights,” February 25, 2003 (FBIS Document ID: LAP20030225000094). 
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ding 

 the 

 

activities. In December 2000, Sung-I sold a shipment of munitions to the Islamic Group, sen

it to Egypt by ship as “medical equipment.” The Cameroon-flagged vessel was intercepted in

Cypriot port of Limasol. The Ming family managed Islamic Group funds from Ciudad del Este in 

the financial circuit that includes Guyana and the Cayman Islands.176An example of 

collaboration between the Chinese Mafia and Islamic terrorist groups in the TBA is the 

distribution chain for counterfeit manufacture of mass-market items, such as toys, running from 

Hong Kong to Hizballah extremists.177

The Chinese community in Ciudad del Este has such a dynamic trade in illicit Asian 

contraband that the Taiwanese Chinatrust Bank established its only Latin American branch in the 

city.178 The significance of the Chinese Mafia threat in the TBA appeared to be confirmed by the 

formal demand made in 2001 by a group of 15 Taiwanese industrialists who are members of 

Taiwan’s Ministry of Economic Affairs. The industrialists conditioned their proposal for 

establishing their industries in the Eastern Industrial Park of Ciudad del Este on the eradication 

of the Chinese Mafia in the TBA by local authorities.179

Reportedly, the Hong Kong Mafia engages in large-scale trafficking in pirated products 

from mainland China to Ciudad del Este and maintains strong ties with the pro-Iranian Hizballah 

in the TBA.180 Ayrton Nascimiento Vicente, who was chief of Brazil’s TBA Command, an 

organization created by the governments of Argentina, Brazil, and Paraguay to control the zone, 

confirmed that Chinese and Korean mafias have been identified in the TBA, including in Foz do 

Iguaçu and Ciudad del Este.181

176 Bartolomé, 8, citing Roberto Godoy, “Tríplice Fronteira é vigiada há 20 anos,” O Estado de São Paulo, 

November 11, 2001. 

177 ABC Color (Internet version-www), November 22, 2002, as translated for FBIS, “Hong Kong Mafia Linked to 

Hizballah in Tri-Border Region” (FBIS Document ID: LAP20021122000047). 

178 Bartolomé, 7, citing “The Bank in the Future of South America,” Taipei Today 18, no. 2 (March–April 1999). 179 Bartolomé, 8, citing “Empresarios taiwaneses piden erradicación de la mafia china,” Noticias, November 18, 

2001. 

180 ABC Color [Internet version-www], November 22, 2002, as translated for FBIS, “Paraguay: 'Strong Ties' Seen 

Between Hong Kong Mafia, Tri-border Based Hizballah,” November 22, 2002 (FBIS Document ID: 

LAP20021122000059). 

181 Bartolomé, 5, citing “Afirman que es imposible la vigilancia en la Triple Frontera” [Affirmation That Vigilance 

in the Triborder Region Is Impossible], La Nación [Buenos Aires], April 2, 2000; and Aloisio Milani, “Máfia 

chinesa extorque e executa em São Paulo” [Chinese Mafia Extorts and Executes in São Paulo], Jornal-laboratório da 

Faculdade de Comunicação Social Cásper Líbero, no. 28 (December 2001), http://biondi.fcl.com.br/facasper/ 

jornalismo/esquinas/noticia.cfm?secao=4&codigo=87] 
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Erika Pai (right) handcuffed to

Roberto Shih’s son Victor Shih

Source: ABC Color, December 

13, 2002. 

As a result of the Chinese groups’ ability to bribe Paraguayan judges, they have been able 

to operate with impunity, according to the consul general of Taiwan in Ciudad del Este.182 In 

2001 the Paraguayan government made an effort to neutralize the activities of the Chinese 

mafias, but only minor successes were reported. In July 2001, authorities in Ciudad del Este 

arrested Chinese citizen Wu Wen Huan, one of the mafia capos in the TBA. Local Chinese 

business people denounced him for his extortion tactics. Between 1997 and 2000, Wu Wen 

Huan’s company, Floresta SA, had registered more than 600 untaxed imports.183 And that 

October, Paraguayan police arrested Cheng Tin Tsang, one of the new Chinese Mafia capos in 

the TBA, along with two other Asian criminal suspects. The three were residing in Foz do Iguaçu 

and using North American and European passports to avoid 

being detained as Asians.184

Another alleged chief of Chinese organized crime in the 

TBA, a young woman named Chia Hui (“Erica”) Pai, was 

arrested in late 2002. According to ABC Color, Chia Hui was 

accused of being the mastermind in the torture and attempted 

murder of Chinese businessman Guillermo Lin, who survived 

being shot in the head and thrown into the Río Paraná.185 Lin 

later pressed charges and testified against his alleged torturers, among them Shih Soung Mou 

(“Roberto Shih”).186 People connected to the Chinese Mafia in Ciudad del Este reportedly paid 

US$12,000 to obtain the release of Chia Hui on bail.187

Instead of having their operations disrupted by these occasional arrests, the Chinese 

Mafia groups appear to be using the TBA as a base for expanding their thriving businesses into 

Argentina and Brazil. An investigation by Argentina’s National Gendarmerie (Gendarmería 

Nacional), a paramilitary force, found that members of the Chinese mafias enter Argentine 

 

182 Bartolomé, 16, citing “Mafia, amparada por la justicia” [Mafia protected by justice], ABC Color, September 28, 

2001. 

183 Bartolomé, 7–8, citing “Procesarán por evasion a supuesto capomafioso,” ABC, September 17, 2001; “Trial 

Begins for 'Mafia Boss' Chinese Citizen,” ABC Color, November 29, 2002, as translated for FBIS (FBIS Document 

ID: LAP20021129000064); and “Taiwanese Mafia Boss Arrested,” Vanguardia [Ciudad del Este], November 28, 

2002, as translated for FBIS, “Brazil-Paraguay Triborder Press Highlights: November 25–29, 2002,” December 3, 

2002 (FBIS Document ID: LAP20021203000105). 

184 Bartolomé, 8, citing “Detienen a chinos e indagan possible nexo con la mafia,” Noticias, October 26, 2001. 185 “Captured Chinese Mafia Boss To Be Freed,” ABC Color, December 13, 2002, as translated by FBIS, 

“Highlights: Paraguay Press,” December 13, 2002, (FBIS Document ID: LAP20021213000113). 186 Ibid. 187 Ibid. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

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territory with tourist visas issued by the Paraguayan consulates of the TBA’s Puerto Iguazú or 

nearby Eldorado (an Argentine town in the department adjacent to Iguazú Department). The 

objective of these Chinese criminals is to establish themselves in the duty-free zone of 

Argentina’s San Luis Province.188

The Colombians 

Although the Colombian drug cartels are known to have been operating in Brazil and 

Paraguay for years, information on their activities in the TBA is not readily available in news 

media. In the case of Colombia’s principal guerrilla organization, the Revolutionary Armed 

Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia—FARC), there appears to 

be a direct connection between the TBA’s function as a drug-trafficking outlet and the FARC. 

The FARC derives much of its operating funds from drug-related activities and is known to do 

business with the Brazilian, Colombian, and Russian mafias. Little substantive information on 

FARC activities in the TBA has been reported in news media, but links between crime 

syndicates in Ciudad del Este and the FARC reportedly date at least from the mid-1990s, when 

General Oviedo protected Brazilian drug trafficker Luiz Fernando Da Costa (“Fernandinho Beira 

Mar”). Da Costa was captured in southern Colombia in April 2001 in the company of FARC 

rebels.189

The FARC’s guerrilla elite actually has a haven located not far from the TBA. Of three 

known FARC havens in Brazil, the biggest of them is located in the small city of Guaíra in the 

southern part of Brazil’s Paraná State at the Paraguay border, only 100 miles (161 kilometers) 

north of Foz do Iguaçu (see Figure 1, The FARC’s Havens in Brazil). It is located on a 6,000-

hectare ranch belonging to businessman Ahmad Mohamad, a Lebanese naturalized in Paraguay 

and arrested by Brazil’s Federal Police in September 2002.190

188 Bartolomé, 8, citing “Investigan a la mafia china en Misiones,” La Nación [Buenos Aires], October 24, 1999. 189 Strafor Global Intelligence Update, “Paraguay Drug Trade and U.S. American Facilities, Personnel at Greater 

Risk,” August 14, 2001, http://www.mapinc.org/drugnews/v01/n1499/a06.html. 

190 Roberto Godoy, “As Farc usam Brasil para abrigar elite da guerrilha” [FARC uses Brazil to shelter the guerrilla 

elite], O Estado de São Paulo [Internet version: Estadao.com.br], March 1, 2003, http://www.estado.estadao.com.br/ 

editorias/2003/03/01/pol024.html. 
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The Russians 

Figure 1. Map showing the locations of three of the 

FARC’s Brazilian havens in Miranda, Mato Grosso 

do Sul State; the city of Boa Vista, Roraima State; 

and the city of Guaíra, Paraná State. 

Source: Estadao.com.br, March 1, 3002 

In about 1996, members of the Russian 

Mafia reportedly began exploring Paraguay, as 

they did Colombia, Argentina, and Brazil.191

Russian Mafia groups reportedly were seeking out 

contacts with the mafia of countries belonging to 

the Southern Cone Common Market (Mercosur), 

principally those operating from the drugtrafficking zones of Pedro Juan Caballero-Ponta 

Porã and Ciudad del Este-Foz do Iguaçu on the 

Paraguay-Brazil border. The intention of the 

Russians reportedly would be to ally themselves 

with the capos of the South American mafias in 

order to maximize the distribution of cocaine in 

Europe. They began by seeking to oust the 

Brazilian and Nigerian cartels based in border 

towns such as Pedro Juan Caballero.192 However, 

if the Russian Mafia has a growing presence in 

the region and is working with bin Laden in an attempt to establish an al Qaeda presence in the 

TBA, as claimed by Judge Walter Fanganiello Maierovitch in 2001, this is not evident from the 

very limited news media reports on the subject.193

According to political scientist Bruce Michael Bagley, the Russian Mafia presence in 

Argentina, specifically Chechen gangs, has been linked primarily to the use of Argentina as a 

transit country for Andean cocaine shipments to Europe, arms trafficking to Brazil and 

Colombia, and money laundering. Bagley notes that Argentine intelligence sources have detected 

contacts between Chechen separatist groups and Islamic terrorists in the TBA and suspect 

Chechen use of these networks for arms-smuggling purposes. 

 

191 “Paraguay es uno de los países explorados por mafia rusa” [Paraguay is one of the countries explored by the 

Russian mafia], ABC Color, October 16, 1997. 192 “Temen que mafia rusa ofrezca armas a cambio de cocaína en la frontera” [Fear that the Russian mafia offers 

arms in exchange for cocaine at the border], ABC Color, November 3, 1997; and Guaracy Mingardi, “Money and 

the International Drug Trade in São Paulo,” International Social Science Journal, no. 169 (September 2001): 383. 193 Germano Oliveira. 
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TBA-Related Governmental Corruption 

Argentina 

The convergence of interests among corrupt government officials and members of 

organized crime and terrorist groups operating in the TBA is illustrated by the revelations in July 

2002 made by a witness in the case of the July 1994 bombing of the AMIA in Buenos Aires. The 

witness, Abdolghassem Mesbahi, a former Iranian intelligence officer, testified to Argentine 

investigators that the Iranian government organized and carried out the attack and then paid thenpresident Carlos Saúl Menem US$10 million to cover it up.194 The charges against Menem have 

never been substantiated, and he vigorously denies them. However, Menem acknowledged that 

he has had a bank account in Switzerland since 1986.195 As president, Menem, whose parents 

migrated to Argentina from Syria, appointed a Syrian army colonel to be customs overseer at 

Buenos Aires’s Ezeiza International Airport, which has been described as “a major hub for 

smuggling in South America.”196

Brazil 

A 1,198-page report by the Drug Traffic Investigating Commission of Brazil’s Congress 

released in November 2000 accuses 827 individuals—including two federal deputies 

(congressmen), two former state governors, 15 state deputies, and scores of mayors, judges, 

police officers, lawyers, and even officials from the neighboring countries of Bolivia, Paraguay, 

and Suriname—of organized crimes ranging from drug trafficking to arms trafficking to tax 

evasion.197 The report concluded that drug-related corruption is so widespread that it is 

impossible to clean up in the short term without calling in the military and restructuring and 

rearming the country's police. Another Brazilian congressional report released in mid-2002 on 

194 “Slow-Motion Justice in Argentina,” New York Times, March 11, 2003, A24; and Larry Rohter, “Iran Blew Up 

Jewish Center In Argentina, Defector Says,” New York Times, July 22 2002, A1, A6. 195 Larry Rohter, “World Briefing Americas: Menem Acknowledges Swiss Account,” New York Times, July 25, 

2002, 9. 

196 Martin Edwin Andersen, “Al-Qaeda Across the Americas,” Insight on the News 17, no. 44 (November 26, 2001): 

20–21. 

197 Andrew Downie, “Corruption's Roots Deep and Wide-reaching in Brazil,” Christian Science Monitor, December 

14, 2000; “Investigation Shows Pervasive Impact of Drug Trade in Brazil,” America's Insider 1, no. 9 (December 8, 

2000): 6. 
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the nationwide surge in highway robberies of truck cargo called for the indictment of 100 

politicians, police, and entrepreneurs allegedly involved in the theft of cargo198 As a moneylaundering center, Foz do Iguaçu plays an important role in this widespread corruption (see 

Money Laundering, Foz do Iguaçu). 

Mato Grosso mafia figure João Arcanjo Ribeiro 

Source: Istoé OnLine, no. 1740 (February 5, 

2003)

Mato Grosso mafia figure João Arcanjo Ribeiro, with US$50 million in Swiss banks and 

a hotel in Miami valued at US$50 million, was sought by the PF and Interpol in more than 100 

countries on charges of heading a ring linked 

to arms trafficking and diamonds, money 

laundering, and a series of assassinations.199

He has also been linked to the TBA-based CC5 accounts scheme and to money-launderer 

Alberto Yussef.200 Arcanjo Ribeiro was 

captured in Montevideo, Uruguay, in early 

April 2003, and subsequently was seeking to 

avoid extradition to Brazil. 

Paraguay 

Corruption, an old tradition in Paraguay, has reached all the way up to the presidency. 

The former regime of Alfredo Stroessner was reportedly involved in drug trafficking.201 More 

recently, President Raúl Cubas was forced to resign as a result of a drug-related scandal. It was 

widely believed in Paraguay that Cubas had a hand in the assassination of his political rival, Vice 

President Luis María Argãna, who was gunned down on the streets of the capital, Asunción, on 

March 23, 1999, by hired assassins in camouflage gear.202 In October 2000, José Tomas 

 

198 Raymond Colitt, “Brazil Tracks Down the Real Culprits Behind Surge in Highway Robberies,” Financial Times

[London], May 2, 2002, 10. 

199 Source: Istoé OnLine, no. 1740 (February 5, 2003). 200 Amaury Ribeiro Jr. e Sônia Filgueiras – Foz do Iguaçu (PR), “Ralo da impunidade” [Used-Up Impunity], Istoé

OnLine, February 2, 2003. 

201 See, for example, Kai Bird and Max Holland, “Paraguay: the Stroessner Connection,” The Nation 241 (tober 26, 

1985), 401. 

202Tim McGirk, “Assassination!,” Time International 153, no. 13 (April 5, 1999): 34, http://www.time.com/time/ 

magazine/intl/article/0,9171,1107990405-23175,00.html; “Paraguai: Estava no Brasil: General Oviedo é preso em 

Foz do Iguaçu” [Paraguay: He was in Brazil: General Oviedo Is Captured in Foz do Iguaçu], Veja, no. 1,654 (June 

21, 2000), http://veja.abril.com.br/210600/p_055a.html; “Paraguay Vice-President's Killers Jailed,” BBC News, 

October 25, 2000, http://news.bbc.co.uk/1/hi/world/americas/989401.stm; “Brasil amenaza extraditar a Lino 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

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Centurion was sentenced to seven years in prison for corruption during his tenure as chief of the 

counternarcotics secretariat.203

Governmental, political, and diplomatic corruption in Paraguay and the TBA allows 

individuals associated with organized crime and terrorist groups to bribe judges, purchase entry 

visas, and engage in any number of other criminal activities that might overlap with legitimate 

economic activities. An investigation conducted by Paraguayan authorities found that an average 

of 570 foreigners annually enter the country through the Ciudad del Este Airport using irregular 

documents, after paying bribes averaging US$5,000.204

Reports of this criminal enterprise began surfacing in mid-1998, when Squadron 51 of 

Argentina’s National Gendarmerie (Gendarmería Nacional) detained a Paraguayan woman in 

Chaco Province in possession of 13 false passports (seven Lebanese and six South Korean). She 

was also carrying an official Paraguayan “This visa was issued by judicial order” seal and visas 

applications.205 Argentine and Paraguayan authorities determined that the interim Paraguayan 

consul in Salta, Juana Maidana de Villagra, belonged to an illicit group specializing in illegal 

documents. In six months, this consul issued more than 500 illegal visas, collecting US$900 for 

each.206 She received a two-year prison sentence. 

In early November 2001, Paraguay’s judge Carlos Cálcena charged that some of 

Paraguay’s consulates had been converted into veritable offices for falsifying documents.207 That 

year, the Directorate of Legal Affairs in Paraguay’s Ministry of Foreign Affairs also identified as 

“vulnerable” the consulates in Santa Cruz, Bolivia; Salta, Eldorado, and Buenos Aires, 

Argentina; Iquique, Chile; and São Paulo, Foz do Iguaçu, Ponta Porã, and Curitiba, Brazil.208

Oviedo” [Brazil Threatens to Extradite Lino Oviedo], Clarín [Buenos Aires], July 16, 2002, http://www.clarin.com/ 

ultimo_momento/notas/2002/07/16/m-416641.htm; and “Oviedo Denies Ties To Brazilian Drug Smuggler,” Avance

[Ciudad del Este; Internet version-www], June 26, 2002, as translated for FBIS, “Paraguay Press Highlights,” June 

26, 2002 (FBIS Document ID: LAP20020626000113). 

203 “Paraguay: Political Rights and Civil Liberties,” Freedom in the World, 2001–2002, Freedom House, 2002, 

http://freedomhouse.org/research/freeworld/2002/countryratings/paraguay2.htm. 204 Bartolomé, 18, citing “Comando terroristas se refugian en la Triple Frontera” [Terrorist commandos seek haven 

in theTriborder Area], El País, November 9, 2001. 205 Bartolomé, 17, citing “Apresan con pasaportes a una mujer” [Woman apprehended with passports], La Nación

[Buenos Aires], June 24, 1998; and “Investigan si hay una red que tramita pasaportes a libaneses” [Existence of a 

network trafficking in Lebanese passports being investigated], La Nación, June 25, 1998. 206 Bartolomé, 17, “Ordenan la captura de otros 17 árabes” [Another 17 Arabs ordered captured], Noticias, 

September 27, 2001. 

207 Bartolomé, 17–18, citing “Comandos terroristas se refugian en la Triple Frontera” [Terrorist commandos find 

safehaven in Triborder Area], El País, November 9, 2001. 208 Bartolomé, 18, citing “La frontera es el punto clave” [The border is the key point], Noticias, October 7, 2001. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

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Post-September 11, 2001 investigations carried out in the TBA found that numerous 

Lebanese citizens residing in Ciudad del Este had entered Paraguay with illicit visas. The most 

well-known case was that of Assad Ahmad Barakat, who was able to enter Paraguay in 1989 

using a visa obtained from the Paraguayan Consulate in Panama, which was not authorized to 

issue visas.209 Until he was arrested and recalled on September 26, 2001, the Paraguayan consul 

in Miami, Carlos Weiss, had allegedly sold more than 300 passports, visas, and shipping 

documents to individuals heading to the TBA since June 1999. His customers for visas or 

passports included about 20 Lebanese, three of whom were on the FBI terrorist watch list, but 

who had never been in the United States, and terrorist suspects from Egypt and Syria, all of 

whom were planning to move to Ciudad del Este.210

Money Laundering 

TBA in General 

Ciudad del Este as seen from the Río 

Paraná 

Source: CNN, November 8, 2002

Although the extent of narcotics trafficking in the 

TBA is unclear, criminal elements in Ciudad del Este and 

Foz do Iguaçu specialize in the laundering of drug 

money. As of 2000-01, the amount of money being 

laundered in the TBA reportedly was averaging US$12 

billion per year, but estimates of the amount of money 

laundering in the TBA vary widely and cannot be 

considered reliable (see Table 1).211 Foz do Iguaçu 

appears to be the principal money-laundering center, 

followed by Ciudad del Este. In any case, the amounts laundered in the TBA probably are in the 

billions of dollars per year. Until about 2000, the most popular financial mechanism for 

laundering money in the TBA appeared to be the CC-5 account, which is an account that belongs 

 

209 Bartolomé, 17. 210 Mendel, citing Bill Rogers, “Arabs Accuse Paraguay Police of Extortion,” Voice of America (VOA.com), 

http://www.voanews.com (accessed October 18, 2001); and Larry Rohter, “Terrorists Are Sought in Latin 

Smugglers’ Haven,” New York Times, September 27, 2001, http://www.nytimes.com; and Bartolomé, 17, citing 

“Fiscala imputa a Weiss por la concesión irregular de visas” [Judge reprimands Weiss for the irregular issuance of 

visas], ABC Color, September 27, 2001. 211 Oviedo, citing Dr. Guido Rauber Lavado de Dinero: Triple Frontera —Work Paper No 1, Prevención de 

Adicciones y Control de Drogas [Subsecretary of Drug Control and Prevention of Addictions], Ministry of Public 

Health of Misiones Province, Argentina, updated version of December 31, 2000 (original date, August 2, 1999). 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

51

to someone residing outside the country.212 It is often opened with false identity documents, 

making investigations difficult (see TBA-Related Governmental Corruption, Brazil). By 2000 

the TBA mafiosi—better known as dollar exchangers—reportedly were laundering billions of 

dollars through new mechanisms that had superceded the CC-5 accounts.213

Table 1. Amounts of Money Reported Laundered in the Tri-Border Area (TBA), 1992–

2001 (in US dollars) 

Period Amount TBA Location of Activity 

2000–2001 $12 billion per year214 TBA in general 

2000 $25 billion215 TBA in general 

2000 $5 billion annual average216 Ciudad del Este 

1998–99 $12 billion total217 Foz do Iguaçu 

1996–97 $18 billion total218 Foz do Iguaçu 

1992–98 $70 billion total219 Foz do Iguaçu 

1992–98 $30 billion total220 Foz do Iguaçu 

 

212 The CC-5 account is a special account created by the Central Bank of Brazil, supposedly for foreigners, in order 

to allow Paraguayan money to be more cheaply and quickly converted to dollars and deposited on the same day in 

local Brazilian banks. 

213 Pedro Pablo Peñaloza, “Brasil prepara ‘el mayor juicio del mundo’” [Brazil Prepares the World’s Greatest Trial], 

talcualdigital.com, ABC Color, August 8, 2001, http://www.talcualdigital.com/ediciones/2001/08/08/p22s2.htm. 214 Pedro Oviedo, “En la Triple Frontera se lavan doce mil millones de dólares al año del narcotráfico, según un 

informe official” [In the Triple Border US$12 billion Is Laundered Per Year From Narcotics Trafficking, According 

to An Official Report], www.MisionesOnLine.net, no. 745, July 8, 2001, http://misionesonline.net/paginas/ 

action.lasso?-database=noticias3&-layout=web&-response=noticia.html&id=11349&autorizado=si&-search, citing 

Dr. Guido Rauber Lavado de Dinero: Triple Frontera —Work Paper No 1, Prevención de Adicciones y Control de 

Drogas [Subsecretary of Drug Control and Prevention of Addictions], Ministry of Public Health of Misiones 

Province, Argentina, updated version of December 31, 2000 (original date, August 2, 1999). 

215 Pedro Pablo Peñaloza, “Brasil prepara ‘el mayor juicio del mundo’” [Brazil Prepares the World’s Greatest Trial], 

talcualdigital.com, ABC Color, August 8, 2001, http://www.talcualdigital.com/ediciones/2001/08/08/p22s2.htm. 216 “Paraguay: Lack of Control System on Border with Brazil Allows Currency Flight,” BBC Monitoring Americas 

– Political [London], January 23, 2003, 1, citing ABC Color Web site, January 22, 2003. 217 Policarpo Junior, “Tem famosos no meio: Polícia apura um bilionário esquema de remessa ilegal de dinheiro ao 

exterior e já tem nomes de gente graúda” [They Have Famous People Among Them: Police Expedite a Billion-Real 

Scheme for Remitting Illegal Money Abroad and Already Have the Names of Big-Shots], Veja on-line, no. 1,755 

(June 12, 2002), http://veja.abril.com.br/120602/p_046.html. 

218 Amaury Ribeiro Jr. and Sonia Filgueiras, “Sieve of Impunity,” Istoé [Internet version-www], February 5, 2003, 

as translated for FBIS, “Brazil: Federal Police, FBI Unveil $30 Billion Money Laundering Scheme,” February 5, 

2003 (FBIS Document ID: LAP20030203000075). 

219 This paragraph is based entirely on Oviedo, citing Dr. Guido Rauber Lavado de Dinero: Triple Frontera —Work 

Paper No 1, Prevención de Adicciones y Control de Drogas [Subsecretary of Drug Control and Prevention of 

Addictions], Ministry of Public Health of Misiones Province, Argentina, updated version of December 31, 2000 

(original date, August 2, 1999). 

220 Marcelo Aguiar, with Mauri König, “Cascata de Dólares” [Cascade of Dollars], Dinheiro na Web [SãoPaulo], 

April 6, 2001, http://www.terra.com.br/dinheironaweb/189/financas/189_cascata_dolares.htm. 220 “Quadrilha lava R$ 30 bilhões em dois anos” [Gang Launders 30 Billion Reais in Two Years], Correiro 

Braziliense [Brasília], November 16, 2000, http://www2.correioweb.com.br/cw/2000-11-16/mat_17077.htm. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

52

In comparison with Ciudad del Este and Foz do Iguaçu, Puerto Iguazú is not known as a 

major money-laundering center. Instead, the third most important money-laundering center in the 

TBA appears to be the popular tourist destination known as Iguaçu Falls, which has many 

foreign exchange bureaus. After receiving large deposits from various parts of Brazil, the 

exchange shops of Iguaçu Falls forward the money to nonresident CC-5 accounts in Paraguay. In 

mid-2001, Brazil’s Public Prosecutor's Office, specifically the Organized Crime and Special 

Investigation Division of the Federal Police (Polícia Federal—PF), was investigating 212 cases 

involving capital flight from Iguaçu Falls totaling more than US$100 million.221

Ciudad del Este 

Iguaçu Falls

Source: Correiro Braziliense, 

October 30, 2002. 

In the assessment of the U.S. Department of State, Paraguay is a principal moneylaundering center. Money laundering in the country is facilitated by the fact that the multi-billion 

dollar contraband re-export trade is centered in Ciudad del 

Este, which is outside the government’s regulatory scope.222

There are no controls on the amount of currency that can be 

brought into or out of the country, and there are no crossborder reporting requirements. Little in the way of personal 

background information is required to open a bank account or 

to make financial transactions in Paraguay; therefore, there is a 

high incidence of money-laundering activities. Narcotics 

trafficking generates an estimated 40 percent of money laundering in Paraguay. 

Carlos Altemburger, chief of Paraguay’s antiterrorist unit, acknowledged in September 

2002 that terrorists use the TBA to finance their operations by remitting large amounts of dollars 

from Ciudad del Este to the Middle East.223 A minimum of US$5 billion, equivalent to 50 

percent of Paraguay’s gross domestic product, is reportedly laundered annually in Paraguay, 

practically all of it in Ciudad del Este.224 Money laundering is facilitated in Ciudad del Este by 

the existence of more than 20 illegal foreign-exchange shops (Casas de Cambio, which are 

 

221 Clarinha Glock, “Brazil-Paraguay: A Full Plate for Journalists,” Inter American Press Association, July 19, 2001, 

http://www.impunidad.com/atrisk/brasil_paraguay7_19_01E.html. 222 This paragraph is based in part on U.S. Department of State, ISCSR-2002. 223 “Entrevista: tráfico en la "triple frontera" [Interview: Traffic in the “Triple Border], BBCMundo.com, September 

3, 2002, http://news.bbc.co.uk/hi/spanish/specials/2001_-_11_de_septiembre_2002/newsid_2234000/2234706.stm. 

224 Oviedo. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

53

concentrated near the Friendship Bridge).225 At least half of them have no name, other than a 

sign “foreign exchange.” The shops trade only dollars, reais, and guaranies. An estimated 50 

percent of all banking transactions registered in Ciudad del Este belong to the category of illicit 

transactions, in violation of Law 1025.226 US$3 billion is reportedly laundered annually in 

Ciudad del Este from five principal sources: contraband, fraud, assaults, tax evasion, and 

trafficking of drugs and weapons.227

Foz do Iguaçu

The exchange-evasion model used by Brazilian money 

launderers in the TBA consists of making deposits in 

exchange houses in Foz do Iguaçu, from where they are 

distributed into CC-5-type accounts in exchange houses in 

Ciudad del Este.228 Foz do Iguaçu reportedly had 13 

exchange houses in late 2000, after 20 were closed on March 

31, 2000, for operating illegally and engaging in laundering 

Alberto Yussef, one of Brazil’s 

major dealers, laundered money 

for “Fernandinho Beira-Mar” 

and was involved in the CC-5 

Accounts Scheme. 

Source: Istoé OnLine, no. 1740 

(February 5, 2003). 

activiti

rcent 

r 

ered his 

money

 

es. 

A Foz do Iguaçu prosecutor affirmed in early June 

1999 that a mafia operates in Foz do Iguaçu, where 40 pe

of the local companies are fronts created only to launde

money and to send it abroad.229 Brazil’s PF found that 

Brazilian industrialist Sílvio Roberto Anspach, one of the 

biggest money launderers in Brazil’s history, cent

-laundering activities in Foz do Iguaçu.230

The TBA and its CC-5 accounts played a central role in a major money-laundering 

scheme uncovered by Brazilian and U.S. investigators in 2000 and involving many Brazilian 

225 “Paraguay: Lack of Control System on Border with Brazil Allows Currency Flight,” BBC Monitoring Americas 

– Political [London], January 23, 2003, 1, citing ABC Color Web site, January 22, 2003. 226 Bartolomé, 9. 227 Bartolomé, 9, citing Camarasa and a statement made in 2000 by the head of Holland’s ABN’s bank branch in 

Ciudad del Este. 

228 Bartolomé, 9. 229 Mario Osava, “Ciudades de América Latina/Brasil: Lavado y fuga de capitales en la frontera con Paraguay” 

[Cities of Latin America/Brazil: Laundering and Flight of Capital on the Border with Paraguay], Inter-Press Service, 

June 6, 1999, http://ips.org/Spanish/mundial/indices/Correo/cor0606051.htm. 230 “Quadrilha lava,” Correiro Braziliense. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

54

çu 

o 

nt more than US$12 billion to the same 

accoun

ad 

ians, 

through the Brazilian dollar dealers, US$30 billion to 

Switzer

r methods opened 

 total of 12 billion reais. 

ive banks in Foz do Iguaçu, the money was remitted abroad through CC-5 

osited in 137 accounts, all 

 

government officials. In early 2002, a Brazilian police chief and two experts in Foz do Igua

money laundering traveled to the United States to investigate the Banestado bank.231 At the end 

of the investigation, they had uncovered 135 accounts controlled by 12 Brazilian dealers wh

between 1996 and 1997 had remitted US$18 billion that were deposited into tax havens by 

means of 35,000 accounts. In the operation, known as the CC-5 accounts scheme, the 

investigators learned that the same account holders had se

ts in 1998 and 1999.232

One can easily use the CC-5 account to launder money by opening an account in Ciud

del Este in the name of a fictitious person and having the amount transferred back to Brazil. 

During the 1996-99 period, the scheme mounted by Banestado helped hundreds of politic

traffickers, and smugglers to send, 

land and other tax havens. 

The Foz do Iguaçu CC-5 accounts scheme had six steps, as follows:233

 The individuals who wanted to send money abroad using irregula

contact with a group of 12 money exchangers in Foz do Iguaçu; 

 The 12 money exchangers, all of whom own exchange houses based in Paraguay, 

opened accounts in five banks in Foz do Iguaçu, depositing a

The accounts were opened using about 2,000 phony names. 

 From the f

accounts; 

 In the Banestado branch in New York, the money was dep

in the name of companies registered in off-shore havens; 

231 Amaury Ribeiro Jr. and Sonia Filgueiras, “Sieve of Impunity,” Istoé [Internet version-www], February 5, 2003, 

as translated for FBIS, “Brazil: Federal Police, FBI Unveil $30 Billion Money Laundering Scheme,” February 5, 

2003 (FBIS Document ID: LAP20030203000075). 

232 Policarpo Junior, “Tem famosos no meio: Polícia apura um bilionário esquema de remessa ilegal de dinheiro ao 

exterior e já tem nomes de gente graúda” [They Have Famous People Among Them: Police Expedite a Billion-Real 

Scheme for Remitting Illegal Money Abroad and Already Have the Names of Big-Shots], Veja on-line, no. 1,755 

(June 12, 2002), http://veja.abril.com.br/120602/p_046.html. 

233 Policarpo Junior, “Tem famosos no meio: Polícia apura um bilionário esquema de remessa ilegal de dinheiro ao 

exterior e já tem nomes de gente graúda” [They Have Famous People Among Them: Police Expedite a Billion-Real 

Scheme for Remitting Illegal Money Abroad and Already Have the Names of Big-Shots], Veja on-line, no. 1,755 

(June 12, 2002), http://veja.abril.com.br/120602/p_046.html. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

55

ounts 

00 

nvolved in the scheme, the ultimate objective is to trace some US$15 billion that left 

razil through CC-5 accounts in Foz do Iguaçu. Brazil’s Office of the Attorney General 

d in the so-called Foz do Iguaçu CC-5 accounts 

Other 

 and 

rs 

$50,000 

00.236

Accord

 After closing the 137 accounts in New York, the money was remitted to the acc

of 35,000 final beneficiaries, most of them held by juridical people, also located in 

off-shore havens. 

In early 2003, approximately 200 police inquiries into CC-5 accounts were frozen 

awaiting a decision as to who is competent to continue the investigations.234 Of a total of about

700 police inquiries concerning money laundering, illegal remittances, and tax evasion, 5

cases remained within the jurisdiction of Foz do Iguaçu. Although the investigations focus on 

who are i

B

estimates that more than 3,000 people are involve

scheme. 

Organized Crime Activities in the TBA

Automobile Smuggling 

Smuggling stolen cars is a booming business. Cars are stolen in Brazil and Argentina

taken to Paraguay, and then to Bolivia and beyond. In mid-2001, an Argentine security official 

stated that an average of 6,000 automobiles are illegally taken out of Argentina every year, and 

for the most part are sent to Bolivia and Paraguay, specifically Ciudad del Este.235 The ca

arrive in Ciudad del Este no more than 15 hours after being stolen in Buenos Aires. The business 

in stolen cars, most of which are luxury models, is facilitated not only by lax border controls but 

also by Paraguayan legislation. Private contracts are accepted as valid instruments under 

Paraguayan law and can be legalized through a letter-writing procedure, without any requirement

for prior documentation. As a result, one can purchase a stolen Mercedes Benz worth US

for only US$10,000 in Ciudad del Este, or a BMW valued at US$40,000 for only US$7,0

ing to Paraguayan authorities, more than half of the 450,000 vehicles registered annually 

 

234 “Investigation on CC-5 Accounts Paralyzed,” Cascavel Hoje [Foz do Iguaçu], February 5, 2003, as translated for

FBIS, “Highlights From the Tri-Border Press for the Week 3-7 February,” February 11, 2003 (FBIS Document ID: 

124). 

6 

LAP20030211000

235 Bartolomé, 6. 236 Bartolomé, 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

56

in Paraguay were acquired illegally. In addition, automobile theft in Brazil is under the 

jurisdiction of the State Police, which apparently is not very effective in countering it.237

The TBA’s two principal centers of reception of stolen vehicles and smuggled goods are 

Iguaçu Falls on the Brazilian side and Ciudad del 

Figure 2. Tri-Border Area and Key Roads Leading to It from Major Cities 

Este. They are also a corridor for trafficking in 

rugs and arms. Some of the illicit cargo passes along an illegally opened road crossing the 

uazú National Park, known as Rodavía del Colono.238 The Asunción-Paranaguá Highway, 

ably used by smugglers (see Figure 2, Tri-Border Area 

and Key Roads Leading to It from Major Cities). 

 

d

Ig

which passes near the falls, is also presum

237 Silva, 163. 238 Clarinha Glock, “Brazil-Paraguay: A Full Plate for Journalists,” Inter American Press Association, July 19, 2001, 

http://www.impunidad.com/atrisk/brasil_paraguay7_19_01E.html. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

57

designe

Brazilian officials have reported that the power behind the black market is organized 

crime and international terrorism. The Arab community in the TBA has been tied to the black 

market trade in pirated goods, particularly CDs. In a series of probes, Paraguayan prosecutors 

have al

for 

it CDs 

IIPA identified Paraguay as the Latin American country causing the most serious problems 

Counterfeiting and Piracy of Products 

Argentina and Brazil 

Argentina and Brazil are on the Priority Watch List of the copyright-oriented 

International Intellectual Property Alliance (IIPA) as a result of intellectual property (IP) 

infringements.239 Both countries have had repeated problems with copyright protection and 

enforcement. Street vendors selling fake products and pirated copies of goods ranging from

r-label sneakers to auto parts have long been a part of life in Brazil in particular. More

than half of the business software and music CD market in Brazil is pirated, and as much as 40

percent of the cigarettes consumed in Brazil come from the black market. Industry experts also

estimate that one-fifth of the drugs on pharmacy shelves is produced illegally.240 Many of the 

products being sold in Brazil are known to come into the country from the porous TBA.241

leged that pirated CDs were a main funding source for Islamic extremist groups, such as

Hizballah and Hamas (see Hizballah Fund-Raising in the TBA, Software Piracy, below).242

Paraguay 

Paraguay, with a thriving industry of pirated products, limited government support for 

enforcement, an obstructionist judiciary, and ineffective customs, is considered a nightmare 

copyright and trademark owners. The International Anti-Counterfeiting Coalition (IACC) 

identified Paraguay as a priority foreign country in 1998. Since then, imports of counterfe

and CD-ROMs from Hong Kong, Macau, Thailand, and Malaysia have only increased, making 

Ciudad del Este the pre-eminent route into Latin America for counterfeits. In February 2000, the 

 

239 James Nurton, “Goodbye to A Difficult Year: The World's Leading IP Practices,” Managing Intellectual 

Property [London], June 2002, 56–70; IIPA 2002 “Special 301” Recommendations, http://www.tetratel.com/ 

02_Feb14_PIRACY%20LOSSES.pdf. 

hicago Tribune, “Pirated Goods Cripple Brazil's Economy, But Solutions Seen as Weak,” 

custom/downloads/20 240 Patrice M. Jones, C

Knight Ridder Tribune News Service, November 4, 2002, 1. 

241 Patrice M. Jones. 242 Patrice M. Jones. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

58

roducts from Asia and also produces pirated products, 

with or 0-02, the 

s. 

f these 

stimated 

US$22

ally 

 the 

main sm h 

 to 

rd Argentina and Brazil from Ciudad del Este 

crosses lake 

relating to intellectual property (IP) infringements.243 It became the only country to rank with 

China as an IP violator.244 Paraguay earned this status because it serves as a major transshipment point for pirated visual media p

ganized crime elements controlling aspects of production and distribution. In 200

pirates' strategy changed, with increasing imports of blank recordable CDs and local burner

The IIPA estimates that 104 million recordable CDs were imported in 2001 alone. Many o

discs turn up as pirated music in Brazil. 

Total losses from product piracy in Paraguay in 2002 amounted to an e

3.2 million.245 This figure reflects a nearly twofold increase since 1996, when U.S. 

companies lost US$117.1 million in 1996 in piracy of products in Paraguay. Much of this 

criminal activity has been linked to organized criminals based in Korea, Lebanon, Libya, and 

Taiwan, and the local press has uncovered numerous examples of corruption. 

A significant part of the contraband in Ciudad del Este originates in Asia, especi

Hong Kong, Taiwan, and Malaysia. These pirated products carry first-line brand names of U.S. 

or Japanese companies. Three levels of falsification are used depending on the hierarchy of the 

brand name concerned. For example, the same videocassette recorder can be purchased in 

Ciudad del Este under the names Panasonic, Sony, or Aiwa.246 Most of the contraband 

merchandise leaves Ciudad del Este along the same air, ground, or water routes that were used to

enter the city, that is, through Argentine and Brazilian territory. In the case of Brazil, one of

uggling routes is along the illegally opened Rodavía del Colono, which cuts throug

Iguazú National Park. Brazilian authorities have noted the existence of about 100 clandestine 

airstrips in Paraguay adjacent to the border that are used for contraband and other smuggling

Argentina and Brazil. An estimated US$1.5 billion worth of goods are moved annually.247

Contraband transported by boat towa

 the Rio Paraná and Itaipú Reservoir, which is the 1,350 square-kilometer artificial

 

243 James Nurton, “Goodbye to A Difficult Year: The World's Leading IP Practices.” 244 IIPA 2002 “Special 301” Recommendations, http://www.tetratel.com/custom/downloads/ 

rade Losses Due to Copyright Piracy, 

olomé, 6, citing Jorge Camarasa, “Declina la capital del contrabando,” La Nación [Buenos Aires], April 2, 

d Regional Cooperation Among Governments and Gangs 

al Communities Programme, 1998. 

2002_Feb14_PIRACY%20LOSSES.pdf. 

245 STR 2002 “Special 301” Decisions and IIPA Estimated US T

http://www.iipa.com/pdf/2002_Jul11_Americas_LOSSES.pdf. 

246 Bart

2000. 

247 Bartolomé, 6, citing Global Crime: International an

Alike, Transnation
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

59

ds. 

Althou

nd 

ompanies had lost an estimated US$600 million as a 

sult of counterfeiting and contraband in Ciudad del Este of Brazilian cigarettes.250

ing and commercialization of contraband merchandise in Ciudad del Este is 

facilita r 

ter 

al 

According to a survey done by the British consulting firm mi2g, a company that serves 

de 

networ

on the Brazil-Paraguay border created by the Itaipú Dam. The contraband across the Paraná 

consists of general merchandise, whereas the contraband transported across the lake consists of 

stolen automobiles, drugs, and weapons.248

Many Brazilian tourists visit Ciudad del Este to purchase cheap consumer goo

gh an estimated 90 percent of the products sold in Ciudad del Este, such as CDs and 

videos, are counterfeit, their cheap prices make them popular. Contraband and counterfeiting of 

products in the TBA is centered on about a dozen categories, including electronic equipment, 

music CDs, videos, computers, athletic shoes, soft drinks, games, jewelry, textiles, perfume, a

cigarettes.249 By 1999, São Paulo tobacco c

re

The pirat

ted by Paraguayan legislation, which permits the patenting in the National Brand Registe

of international brand names that are not based in the country.251 For example, a former minis

of industry and commerce patented “aspirin” under his own name and sued the multination

Bayer company when it used the word.252

Internet Crime 

large banks and insurance companies by monitoring the actions of hackers on the worldwi

k of computers, in November 2002 Brazil became the world’s largest "exporter" of 

Internet crimes, including identity theft, credit card fraud, violations of intellectual property 

(piracy), and the invasion of sites for political protests.253 Foz do Iguaçu is regarded by Brazilian 

authorities as one of the main centers of Brazilian Internet crime.254

 

248 Bartolomé, 6. 249 Bartolomé, 5. 250 Bartolomé, 5, citing “Brasil, inquieto por el contrabando” [Brazil: Concerned About Contraband], La Nación

[Buenos Aires], March 4, 2000. 

251 Bartolomé, 6, citing Jorge Camarasa, “Declina la capital del contrabando,” La Nación [Buenos Aires], April 2, 

2000. 

252 Bartolomé, 6, citing Jorge Camarasa. 253 Marcelos Starobinas, Text Folha de São Paulo [São Paulo; Internet version-www; a center-left daily, critical of 

government in general; top-circulation newspaper], November 20, 2002, as translated for FBIS, “Study Reveals That 

Brazil is World Leader in Internet Crimes,” November 20, 2002 (FBIS Document ID: LAP20021120000057). 

254 International Intellectual Property Alliance, 2003 Special 301 Report: Brazil, 2003, 62, http://www.iipa.com/ 

rbc/2003/2003SPEC301BRAZIL.pdf. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

60

etter 

 the Paraguayan National Police, Argentina’s National Gendarmerie or border patrol, 

Coast G

te. 

ong the three 

ountries to intensify their fight against terrorism, smuggling, money laundering and drug 

ite this joint force, efforts by the TBA governments to counter organized crime and 

terroris

te 

COMBATING ORGANIZED CRIME AND TERRORIST GROUPS IN THE TBA 

The general security forces of Argentina, Brazil, and Paraguay have all been involved in

efforts to counter the use of the TBA by organized crime and terrorist groups. On May 31, 1996,

the three TBA nations established a “Tripartite Command of the Tri-Border” in an effort to b

control commerce and the large transient international population. The command draws on 

members of

uard (Prefectura Naval), and Federal Police units, as well as representatives from the 

SIDE, the Argentine Consul's Office in Foz do Iguaçu, the National Aeronautical Police, and the 

Misiones Provincial Police; and the PF (Brazilian Federal Police), Mountain Infantry Battalion 

no. 34, the State Intelligence Department, and the Brazilian Consul's Office in Ciudad del Es

In 1998 the Tripartite Command was augmented with a security agreement am

c

trafficking.255

Desp

t groups in the TBA have been hindered by institutional problems of corruption, 

inadequate funding and investigative capabilities, poor training, lack of motivation, inadequa

penal codes, and so forth. These factors, which are summarized below, help to explain how 

organized crime and terrorist groups have operated so profitably in the TBA. 

Security Forces 

Argentina 

Argentina’s principal law enforcement agency is the Argentine Federal Police, which is 

under the jurisdiction of the Ministry of Interior and is involved in countering drugs.256 The 

mission of the Argentine National Gendarmerie includes combating drug trafficking, organized 

 

255 Mendel, citing Gendarmería Nacional, Escuadrón 13 'Iguazú': Estadísticas del funcionamiento del Escuadrón 13 

y and 

stitute for Countern/zgate2.prod. 

'Iguazú.' (Puerto de Iguazú, Argentina: Gendarmería Nacional, September, 2001); and "Argentina, Paragua

Brazil Sign Border Agreement," Press Summary, March 27, 1998, International Policy In

Terrorism, Interdisciplinary Center Herzlia, http://www.ict.org.il; and RLG’s Eureka World Law Index, 

http://eureka.rlg.org/cgi-bi

256 Scott D. Tollefson, “National Security,” Chapter 5 in Rex A. Hudson, ed., Argentina: A Country Study

(Washington, DC: Library of Congress, Federal Research Division, 1999), unpublished. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

61

lay a key 

ied 

r 

 with 

tempor

he 

IF), 

stry of Justice and Human Rights, began operating in June 2002 as an additional 

interagency unit to prevent, control, and fight illegal asset laundering activities related to drug 

and arms trafficking.263 The establishment of the UIF and the strengthening of anti-money-

 prevent and combat money laundering 

y, in the assessment of the U.S. Department of State.264 Despite these measures, 

crime, and terrorism.257 The SIDE (Secretariat for State Intelligence) also appears to p

role in countering terrorist activities. Traditionally, the fight against organized crime is carr

out by a special operations unit within the security police and the Judicial Police.258 The latte

operates under the authority of the court prosecutor in each province.259

As a highly bureaucratic organization within the executive branch of government,

the exception of the Judicial Police, Argentina’s police system, including the special unit, is 

generally inefficient, and its investigative function is relegated to second place, after 

maintenance of public order.260 Lacking, in addition, any special incentives, the police are 

ineffective in combating organized crime. Even the relatively autonomous but inadequately 

trained Judicial Police have been unsuccessful in the fight against organized crime. 

Occasional combined forces operations in the TBA appear to have caused only a 

ary inconvenience for organized crime. For example, in February 2000, Argentina’s 

Secretariat of Internal Security sent 1,000 police officers and four boats of the Naval Prefecture 

to the TBA to combat contraband.261 The next month, the Argentine Air Force conducted a 

surveillance operation that confirmed, within only three days, at least 15 illegal airstrips in t

northern Argentine provinces of Misiones and Corrientes. In addition, about 30 unidentified 

flights mostly coming from Paraguay were detected.262 Apparently, none were intercepted. 

A 28-member Financial Intelligence Unit (Unidad de Información Financiera—U

under the Mini

laundering mechanisms better positioned Argentina to

more effectivel

 257 The Argentine National Gendarmerie Web site, http://www.gendarmeria.gov.ar/ingles/texto/ing2.htm. 258 Antolin Almiron, 320. 259 Kozameh, Ernesto Nicolás, Julio O. Trajtenberg, C.P. Nicolás Kozameh Jr., and Ezequiel Trajtenberg. Guide 

the Argentine Executive, Legislative and Judicial System, July 15, 2001, http://www.llrx.com/features/argentina.htm. 260 This paragraph is based in part on Antolin Almiron, 322–27. 261 Bartolomé, 7. 262 Bartolomé, 7. 263 “Ley 25246 Creación de la Unidad de Información Financiera” [Law 25246, Creation of the Financial 

Information Unit], Boletín Oficial [Buenos Aires], May 10, 2000, 264

to 

http://www.imolin.org/argtlaw2.htm. 

 U.S. Department of State, International Narcotics Control Strategy Report –2002 (INCSR-2002). Washington, 

DC: Bureau for International Narcotics and Law Enforcement Affairs, March 2003 (U.S. Department of State, 

ISCSR-2002), http://www.state.gov/g/inl/rls/nrcrpt/2002/html/17952pf.htm. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

62

howeve

ve 

stitucional—

Correp ut 

ons to commit 

ffenses through an organization. With the exception of laws related to drug matters, 

na does not have special laws to fight against organized crime.270

r, the Central Bank reportedly has been totally ineffective in prosecuting money 

laundering.265

Corruption is a serious problem at all levels of the Argentine Police.266 Police are poorly 

paid, with a starting salary of around US$400 (400 pesos) a month rising to about US$2,000 

(2,000 pesos) a month for a captain. For the past 20 years, the Argentine police reportedly ha

been involved in organized crime. For example, the white van used in the AMIA attack was 

traced to Police Commissioner Juan José Ribelli, who had long been suspected of using his 

position to traffic in stolen automobiles to Paraguay.267 In 2002, a lawyer at the Center for the 

Prevention of Police Repression (Coordinadora Contra la Represión Policial e In

i), stated that “in the last decade, there has not been any major illegal business witho

police participation, from prostitution to gambling, robbery, or kidnapping.”268

The inadequacy of Argentina’s penal code for combating organized crime seems 

typical of the three TBA countries. Argentina’s Penal Code has not defined organized 

crime legally; its penal law is, in fact, “typical,” meaning that criminal behavior must be 

exactly defined in the Penal Code.269 Judicial and legal analogy in penal matters is 

forbidden. The Penal Code lacks the necessary doctrine of “illicit association,” which 

defines organized crime, such as a conspiracy by three or more pers

o

Argenti

 265 Pedro Oviedo, “En la Triple Frontera se lavan doce mil millones de dólares al año del narcotráfico, según un 

informe official” [In the Triple Border US$12 billion Is Laundered Per Year From Narcotics Trafficking, According 

et version-www], February 24, 2003, as 

IS, “Argentina: Daily Calls for Full Support of Agency Created to Fight Money Laundering,” 

wha/8278.htm. 

to An Official Report],www.MisionesOnLine.net, no. 745 (July 8, 2001), http://misionesonline.net/paginas/ 

action.lasso?-database=noticias3&-layout=web&-response=noticia.html&id=11349&autorizado=si&-search; and 

“The Fight Against Money Laundering,” La Nación [Buenos Aires; Intern

translated for FB

February 24, 2003 (FBIS Document ID: LAP20030224000052),. 

266 This discussion is based in part on U.S. Department of State, “Argentina,” Country Reports on Human Rights 

Practices – 2001 (Washington, DC: Bureau of Democracy, Human Rights, and Labor, U.S. Department of State, 

March 4, 2002), http://www.state.gov/g/drl/rls/hrrpt/2001/

267 Junger, 199. 268 “Delinquent; Politics in Argentina (Argentina's Crime Wave),” The Economist [London], October 5, 2002. 269 This paragraph is based in part on Hugo Antolin Almiron, “Organized Crime: A Perspective from Argentina.” 

Chapter 14 in Jay S. Albanese, Dilip K. Das, and Arvind Verma, eds., Organized Crime: World Perspectives (Upper 

Saddle River, New Jersey: Prentice Hall, 2003), 318–19. 

270 Antolin Almiron, 327. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

63

ontrast 

es, the Armed Forces has operated in Foz do 

Iguaçu 

be a 

er 

l’s police forces in fighting organized 

crime a

Brazilian government to address its serious problems. 

 

Brazil 

Public security in Brazil is largely the responsibility of state governments. In c

with its Argentine counterpart, Brazil’s PF (Federal Police) force is very small and primarily 

investigative.271 It plays only a minor role in routine law enforcement. Its purpose is to 

investigate criminal offenses of an interstate or international nature; to prevent and suppress

illicit traffic in narcotics and related drugs; to perform the functions of a coast guard 

(enforcement only), air police, and border patrol; and to perform the functions of the judicial

police.272 A task force made up of the Civil and Military Police, the PF, the Federal Highway 

Police, the Municipal Guard, and, in some cas

since April 2001.273 The frequency of money laundering around the region of Foz de 

Iguaçu is of concern to the Brazilian government because of the TBA’s high occurrences of 

intellectual property violations and illicit commerce, and because the TBA is believed to 

haven for smuggling and arms trafficking.274

Although some Brazilian police forces are known to be highly professional, a Decemb

2000 Argentine report indicates that a supposed connection has been established between the 

Civil Police of Foz do Iguaçu and a narcotics network that operates in the Brazilian and 

Paraguayan parts of the TBA. The chief of Civil Police of Foz do Iguaçu, who has been 

suspended, was involved.275 The effectiveness of Brazi

nd terrorist groups in the TBA is hindered by a general lack of respect for human rights

(which makes much of the population fear the police at least as much as most Brazilians fear the 

criminals), widespread corruption and involvement in crime, and a general failure of the 

 

 Practices – 2001 (Washington, DC: Bureau 

erates; 

 for 

ublic 

99). 

271 This discussion is based in part on Scott D. Tollefson, “National Security,” Chapter 5 in Rex A. Hudson, ed., 

Brazil: A Country Study (Washington, DC: Library of Congress, Federal Research Division, 1998), 400–402; and 

U.S. Department of State, “Brazil,” Country Reports on Human Rights

of Democracy, Human Rights, and Labor, U.S. Department of State, March 4, 2002), http://www.state.gov/g/drl/rls/

hrrpt/2001/wha/8305.htm. 

272 Silva, 169. 273 Miriam Karam, São Paulo Valor [financial daily, published jointly by the Folha and Globo media conglom

Internet version-www], May 20, 2002, as translated for FBIS, “Brazil: Federal Police Denies Presence of Terrorist 

Cells in Foz do Iguaçu” (FBIS Document ID: LAP20020520000040). 

274 U.S. Department of State, International Narcotics Control Strategy Report –2002 (Washington, DC: Bureau

International Narcotics and Law Enforcement Affairs, March 2003), http://www.state.gov/g/inl/rls/ 

nrcrpt/2002/html/17952pf.htm. 

275 Oviedo, citing Dr. Guido Rauber Lavado de Dinero: Triple Frontera —Work Paper No 1, Prevención de 

Adicciones y Control de Drogas [Subsecretary of Drug Control and Prevention of Addictions], Ministry of P

Health of Misiones Province, Argentina, updated version of December 31, 2000 (original date, August 2, 19
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

64

The Brazilian government’s attitude toward the existence of a terrorist problem in the

TBA is also a factor. The government has insisted that there is no evidence of terrorist financin

in the area, and it has been generally dismissive of reports of terrorists operati

Special policemen on patrol in Ciudad 

del Este 

Source: New York Times, September 

27, 2001. 

g 

ng in the area.276

Neverth

er with 

t 

l the Rio 

ir 

F 

d 

eless, Article 4 of Decree 3,755, issued on February 19, 2001, blocks all funds from

being sent from Brazil to Osama bin Laden or to companies, associations, or people linked to 

him. At least three of the decree’s articles refer to the Arab terrorist threat.277

In March 1998, Brazil’s Congress adopted a law authorizing the shooting down of 

intercepted airplanes that fail to obey signals of the intercepting pilots who patrol the bord

Paraguay, but the measure has yet to be implemented. In May 2001, in an effort to interdic

contraband, the PF established an air base in Foz do Iguaçu, from where its aircraft patro

Paraná and the Itaipú Reservoir.278 On August 22, 2002, in an effort to strengthen border 

controls, the PF began suppressing illegal activities in

the TBA’s Friendship Bridge area, specifically along 

the Paraná.279 The operation was aimed at preventing 

smugglers and traffickers from using the river for the

operations after customs officers increased the traffic 

control on the head of the bridge. Joaquim Mesquita, 

chief of the Foz do Iguaçu PF, reported that the main P

drug enforcement actions in 2002 in the TBA included 

the confiscation of 12.7 tons of marijuana and of 30 

kilograms of cocaine mostly coming from Bolivia an

 

6

 For example, see “Brazil: Minister Denies Existence of Terrorist Cell in Triborder Area,” BBC Monitoring 

mericas—Political [London], November 9, 2002, citing text of report by Edson Luiz published by Brazil’s 

Agencia Estado, November 9, 2002; Carmen Gentile, UPI, “Brazil Denies Terror Groups in Region,” The 

or Claims; Ambassador Says ‘Tri-border Area' Is Well Policed,” The Daily Star

: 

0022). 

2, 2002 (FBIS Document ID: LAP20020902000038). 

27

A

Washington Times, November 11, 2002, http://www.washingtontimes.com; Hala Kilani and Cilina Nasser, “Brazil 

Dismisses US-Israeli Terr

[Independent Beirut paper; Internet version-www], February 14, 2003, as transcribed for FBIS, “Brazilian 

Ambassador to Lebanon Denies Terrorist Activities in Tri-Border Area,” February 14, 2003 (FBIS Document ID

GMP2003021400

277 Edson Luiz, “Brasil bloqueou bens de Bin Laden antes dos EUA” [Brazil Blocks bin Laden Funds Before the 

USA], Oestadao.com, Setembro 24, 2001, http://www.estadao.com.br /agestado/noticias/2001/set/24/305.htm. 278 Bartolomé, 7. 279 “Brazilian Federal Police (PF) Launches Gigantic Operation—Ciudad del Este,” Vanguardia [Ciudad del Este], 

August 26, 2002, as translated for FBIS, “Highlights: Brazil - Paraguay Triborder Press 26-30 Aug 02,” Tri-Border 

Press Highlights, September 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

65

 Undoubtedly, those seizures constitute only a small fraction of the drug traffic. In 

late 200

nts 

t an effective force, and it is suspected of corruption.282 A 

genera

sm in 

BA 

álisis Financiera—UAF).284 The 

establis

Colombia.280

2, Brazilian authorities reinforced security controls in the Friendship Bridge area by 

installing two 360-degree panoramic vision surveillance posts (POVs) and by posting 70 age

to the area.281

Paraguay 

Information on capabilities of the 200-member Paraguayan police force in Ciudad del

Este is lacking, but it is clearly no

l lack of confidence in the local police may be reflected by the fact that the city’s 6,000

shops, 36 banks, and 15 money exchanges all have their private guards. By October 2001, as 

authorities in Paraguay increased surveillance of the country's Arab immigrants, there were 

charges that police were extorting large sums of money from some merchants in the TBA in 

return for not detaining them.283

At the national level, the Secretariat for Prevention and Investigation of Terrori

Paraguay (Secretaría de Prevención e Investigación del Terrorismo de Paraguay—Seprinte) has 

been in the forefront of operations and arrests carried out in the Paraguayan sector of the T

since the September 11, 2001 attacks in the United States. This relatively small antiterrorist 

organization is a department of the police and works with anti-money-laundering agencies, 

including the Financial Analysis Unit (Unidad de An

hment of the UAF under the Attorney General’s office in July 2002 was expected by the 

U.S. Department of State to enhance cooperation at the working level and to improve the 

Attorney General’s ability to investigate money laundering and terrorist financing.285 The UAF, 

 

280 “Federal Police's Annual Report,” A Gazeta do Iguacu [Foz do Iguaçu], January 24, 2003, as translated for FBIS, 

“Tri-Border Press for the Week of 23-31 January,” Tri-Border Press Highlights, February 4, 2003 (FBIS Document 

ID: LAP20030204000134). 

281 “Surveillance System on Friendship Bridge,” A Gazeta do Iguaçu, November 6, 2002, as translated for FBIS, 

“Highlights: Brazil - Paraguay Triborder Press 4-15 Nov 02,” November 21, 2002 (FBIS Document ID: 

n Paraguay, Smugglers' Paradise,” World 

rabs Accuse Paraguay Police Of Extortion,” Middle East News Online [Durham, North Carolina], 

 Constant, Asunción (Tel.: (+595) 21 452 411/412; Fax: (+595) 21 

LAP20021121000006). 282 This paragraph is based in information from Ricardo Grinbaum, “I

Press Review 43, no.1 (January 1996): 25–26 (reprinted from Veja). 283 Bill Rogers, “A

October 4, 2001. 

284 Location: Juan E. O’Leary 165, esq Benjamín

451 635; E-Mail: seprelad@conexion.com.py). 

285 This paragraph is based in part on U.S. Department of State, ISCSR-2002. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

66

nce 

te 

raft Antiterrorist Law that was introduced in the Chamber of Deputies in 

002 and remains under consideration, the Paraguayan government currently has no specific 

ing.288 Paraguay has adopted provisions to cover 

conduc

ough 

tion 

The TB

rior 

Minister Mario Agustin Sapriza pointed out on May 3, 2001, that the Immigrations Department 

which is recognized by the U.S. government and the Egmont Group as a financial intellige

unit, has purview only over financial institutions.286

In addition to establishing the UAF, the Paraguayan government has carried out limited 

efforts to combat terrorist financing. Nevertheless, Paraguay has limited resources to investiga

and prosecute money-laundering cases. Investigations are carried out by a small financial crimes

investigative unit, the Unit for Investigating Financial Data (Unidad de Investigación de Datos 

Financieros—UIDF). Because there are only about 200 prosecutors nationwide for a population 

of 5.5 million, money-laundering investigations in Paraguay are assigned to a single prosecutor. 

Furthermore, government corruption is an ongoing problem related to Paraguay’s money 

laundering and money-laundering investigations.287

Other than the d

2

laws criminalizing terrorism or terrorist financ

t that would be considered terrorist acts, but most of these acts do not carry a sentence of 

more than five years, nor are they considered predicate offenses for money laundering. Alth

some existing legislation allows for counterterrorist police operations, the lack of any legisla

specifically targeting terrorist activities has greatly impeded the efforts of the Paraguayan 

Antiterrorist Police. Paraguay also lacks the investigative capabilities to track the terrorists’ 

financial transactions. 

A’s Immigration Control Problem 

The TBA is known for its lax immigration controls. It is common knowledge that anyone 

in the region can easily obtain a false passport, birth certificate, driver’s license, and other 

documents through corrupt officials. Relatively few members of the Asian, Arab, and other 

ethnic communities in the TBA are believed to be legally registered. Paraguay’s Vice Inte

 

286 This paragraph is based in part on U.S. Department of State, ISCSR-2002. 287 This paragraph is based in part on U.S. Department of State, ISCSR-2002. 288 “Paraguay: US Official Says Tri-border Area Source of Islamic Terrorism Funding,” 

BBC Monitoring Americas – Political [London], May 25, 2002, citing ABC Color Web site, May 23, 2002. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

67

y 

ncarnación in which 17 Arabs were arrested, all of whom had false identity 

docume e 

t plots 

rtant figure in the Arab community of Foz do 

uaçu and Ciudad del Este and believed to be a bin Laden follower and a member of an 

on.293

inistry of Interior called 

Brazil's immigration control system for the TBA a problem. Argentina places its emphasis on 

immigr

r inside its territory. In 2002, Brazilian authorities established controls on the 

 

is where most difficulties are found in preventing the TBA from being used by Islamic 

extremists.289

Arrests in Ciudad del Este in 2001 showed how typical it is for suspected Islamic 

extremists in the TBA to be without valid identity documents. One individual arrested in May b

Paraguay’s Federal Police at the Ciudad del Este Airport had 17 fake Lebanese passports in his 

possession.290 On September 21, Paraguayan police carried out two operations in Ciudad del 

Este and nearby E

nts and had no entry documents registered by the Department of Immigration.291 Th

FBI identified three of arrested individuals as having close ties to Hamas and the Lebanese AlKaffir group. Reportedly, they collected funds for these terrorist groups to support terroris

against the United States.292 Another who escaped the police round-up in Encarnación is the 

Egyptian Khaled Ta Qe El Din, who is an impo

Ig

Egyptian terrorist organizati

In early October 2001, high-level sources in Argentina’s M

294

ation control at the border crossings, while Brazil's control operations are located 

somewhat deepe

roads several kilometers from Foz do Iguaçu. 

 289 ABC Color [Internet version-www], May 4, 2001, as translated for FBIS, “Paraguay: Vice Interior Minister 

irms Presence of ‘Dormant Islamic Terrorist Cells’” (FBIS Document ID: LAP20010505000002). 

ario Daniel Montoya, “War on Terrorism Reaches Paraguay’s Triple Border,” Jane’s Intelligence Review 13, 

Conf 290 M

no. 12 (December 2001): 13; and “Policiais viajam em vôos internos argentinos” [Police fly on internal Argentine 

flights], Oestado.com.br, September 19, 2001, http://www.estadao.com.br/agestado/noticias/2001/set/19/207.htm. 

291 James Mack, Deputy Assistant for International Narcotics and Law Enforcement Affairs, “Providing Support to 

Counternarcotics and Other Anti-Crime Efforts,” Testimony Before the House Committee on International Relations 

Subcommittee on the Western Hemisphere, Washington, DC, October 10, 2001, http://www.state.gov/g/inl/rls/rm/ 

2001/sep_oct/6215.htm; and Bartolomé, 14, citing “Juez confirmó la prisión de los 13 árabes” [Judge Confirms 

Prison for the 13 Arabs], Noticias, September 25, 2001. According to the list released to the press, the 11 who were 

charged included: Mohamed Jassin, Yehya Hamed Kaddoura, Abdel Nasser Waked, Assen Mohammed Waked, 

Yazzed Khalil Abu El Hawa, Rateb Ahmad Ayoub, Samir Nazih Jbara, Jehya Fallez Hussein, Hassan Abdalah 

Halawi, Kassen Mohamed Fawaz, and Sufián Asfour Mahamad Asfour. 

292 Bartolomé, 15, citing “Paraguay lanza operativo contra el terrorismo” [Paraguay launches operation against 

terrorism], El Nuevo Herald [Miami], September 23, 2001. 293 Bartolomé, 15, citing “Egipcio está sendo investigado pela PF” [Egyptian is being investigated by PF], O Estado 

de São Paulo, September 24, 2001. 294 La Nación [Buenos Aires], October 3, 2001, as translated for FBIS, “National Border Guard Commander: TriBorder Area Hotbed of Sleeper Cells,” October 3, 2001 (FBIS Document ID: LAP20011003000015). 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

68

Th

od 

co

 and 

presence in the TBA; 

 of 

 this review; 

, 

es; 

or community leaders who may be opposing 

al organizations and the Islamic jihad against the United States and U.S. 

allies; 

illions of dollars in profits from narcotics and 

arms trafficking, product piracy, and other illicit activities in the TBA; 

of the Islamic terrorist groups in the TBA have 

y 

Th

CONCLUDING POINTS 

e TBA as a Haven and Base for Islamic Terrorist Groups 

This assessment of open sources pertaining to the TBA during the 1999-June 2003 peri

ncludes that: 

 various Islamic terrorist groups, including the Egyptian Al-Jihad (Islamic Jihad)

Al-Gama’a al-Islamiyya (Islamic Group), Hamas, Hizballah, and al Qaeda, probably

have a 

 Hizballah and al Qaeda are probably cooperating in the region, but definitive proof

this collaboration, in the form of a specific document, did not surface in

 Islamic terrorist groups are using the TBA for purposes of safe haven, fund-raising

money laundering, recruitment, training, plotting, and other terrorist-related activiti

 terrorism within the TBA by Islamic terrorist groups has been limited to selective, 

mafia-like assassinations of business 

their interests; 

 the Islamic fundamentalist groups’ activities in the TBA are in support of their 

internation

 Hizballah has reaped hundreds of m

 a substantial number of members 

probably moved out of the region since late 2001 to other areas of South America, 

such as Chile, Uruguay, and Venezuela, where they may be under less pressure b

security forces than in the TBA; and 

 if TBA-based Hizballah and al Qaeda operatives are plotting any anti-U.S. terrorist 

attacks, their most likely targets would be U.S. embassies and consulates in South 

America. 

e TBA as a Center for Organized Crime 

This assessment also concludes that: 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

69

on to 

ollar profits by 

 groups, the organized 

d 

countries; 

 this informal alliance appears to be primarily oriented toward reaping multi-millionrate in the TBA and are attempting to expand their 

ups in the region, especially with al Qaeda; 

guayan mafia groups are also actively 

fforts to Counter Organized Crime and Terrorism in the TBA 

This assessment also concludes that: 

 widespread corruption at all levels of government and police in the three TBA 

countries is facilitating the activities of the Islamic terrorist groups and organized 

crime in the TBA; 

 the capabilities of the security and investigative forces in the TBA are inadequate for 

ridding the region of the Islamic terrorist groups, organized crime mafias, and corrupt 

officials who do business with them; and 

 laws for combating terrorist fund-raising, money laundering, organized crime 

activities in general, and official corruption are also inadequate. 

 the TBA is highly popular with other organized crime groups, which use the regi

launder billions of dollars every year and to earn multi-million-d

engaging in narcotics and arms trafficking and other illicit activities; 

 an informal tripartite alliance exists among the Islamic terrorist

crime mafias, and the many corrupt government or police officials in the TBA an

elsewhere in the TBA 

dollar profits from illicit activities; 

 various Chinese Mafia groups ope

activities into Argentina and elsewhere; 

 the Chinese and Russian (Chechen) mafias reportedly are collaborating with the 

Islamic terrorist gro

 the Hong Kong Mafia, which has close relations with the Hizballah network in the 

TBA, is particularly active in the product-piracy business; and 

 indigenous Argentine, Brazilian, and Para

involved in the TBA. 

E
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

71

APPENDIX 

Alleged Operatives of Islamic Fundamentalist Groups in the TBA 

Barakat, Assad Ahmad Mohamad (Hizballah)

Assad Barakat awaiting 

extradition to Paraguay 

Source: ABC Color, June 9, 

2003 

Assad Mohamed Barakat, 37, is generally identified as Hizballah’s military (i.e., terrorist) 

operations chief in the TBA, as well as its chief fund-raising officer in the Southern Cone. The 

U.S. Department of State has also reportedly identified him as connected to the al-Gama’a alIslamiyya (Egyptian Islamic Group).295 He is also believed to be heavily involved in Hizballah 

funding operations in the region. Following the September 11, 

2001, terrorist attacks in the United States, an international 

arrest warrant was issued for his arrest, and as a result Barakat 

fled the TBA in October 2001. He was indicted in Paraguay on 

charges of association for criminal purposes, abetment of 

crime, and tax evasion.296 Brazilian authorities arrested Barakat 

in Foz do Iguaçu on June 22, 2002, and imprisoned him in 

Brasília, where he has been awaiting a decision from the 

Federal Supreme Court on an extradition request from 

Paraguay.297 In mid-December 2002, the plenum of the 

Brazilian Federal Supreme Court ruled to extradite Barakat to 

Paraguay.298

 

295 “Barakat To Be Extradited: Slippery Barakat Caught by Federal Police Hands,” Última Hora, June 24, 2002, as 

translated by FBIS, “Highlights: Paraguay Press,” June 24, 2002, (FBIS Document ID: LAP20020624000088). 

296 “Another Serious Charge Pending Against Barakat,” Vanguardia [Ciudad del Este; Internet version-www], June 

26, 2002, as translated for FBIS, “Paraguay Press Highlights,” June 26, 2002 (FBIS Document ID: 

LAP20020626000113); and Héctor Rojas and Pablo Vergara, La Tercera de la Hora [Santiago; a conservative, probusiness, top-circulation daily, Internet version-www], November 8, 2001, as translated for FBIS, “Chilean Police 

Examine Link to Alleged Triborder Hizballah Financial Network,” November 8, 2001 (FBIS Document ID: 

LAP20011108000085). 

297 Jose Maschio, reporting on telephone interview between Assad Ahmad Barakat and Agencia Folha on November 

18, 2002, from his prison cell in Brasilía, Folha de São Paulo (Internet version-www), November 19, 2002, as 

translated for FBIS, “Brazil: Barakat Denies Involvement in Terrorism; Views 'Economic Plot' Against Him” (FBIS 

Document ID: LAP20021119000039). 

298 “Brazilian Federal Supreme Court Rule To Extradite Barakat,” ABC Color [Internet version-www], December 

20, 2002, as translated for FBIS, December 20, 2002 (FBIS Document ID: LAP20021220000015). 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

72

Barakat at home in Foz do 

Iguaçu 

Source: Istoé August 11, 2001

A Lebanese by birth, Barakat left civil-war-torn Lebanon at age 17 and emigrated to 

Paraguay with his father. After a few years as a street peddler, he opened Apollo Import-Export, 

a stall in the Page shopping gallery in Ciudad del Este. Since then, he reportedly has accumulated 

numerous companies, including the Mondial (World) Engineering and Construction company, 

with offices in Ciudad del Este and Beirut, as well as numerous 

properties. Ahmad is the brother of priest Akraam Ahmad 

Barakat, who reportedly is also a high-ranking leader of Iran's 

Hizballah.299

Barakat’s Paraguayan passport reportedly indicates that 

he was last in the United States in April 2000. His visa was 

revoked after his name appeared on the U.S. Department of 

State’s list of “suspected terrorists.” Barakat has acknowledged 

owning businesses in Chile and the United States (Miami and 

New York).300

Fayad, Sobhi Mahmoud (Hizballah)

Sobhi Mahmoud Fayad, who claims to be a Lebanese businessman but is widely reported 

to be a key Hizballah operative, was arrested at the Page shopping gallery in Ciudad del Este on 

November 8, 2001, on charges of being an alleged member of an organization that remits funds 

to the Islamic Middle East armed struggle.301 Documents found at the Apollo shop owned by 

Assad Ahmad Barakat allegedly incriminate Sobhi Fayad. On the basis of the documents, it was 

alleged that Sobhi Fayad, who had not paid taxes since 1992, was sending large sums of money 

to banks in Lebanon almost daily. He remained under arrest in the Special Operations Police 

Force unit in Asunción, together with his brother Salhed Fayad, until he was released on bail in 

early October 2002. On November 21, 2002, Sobhi Mahmoud Fayad submitted to public trial for 

 

299 Special Correspondents Vladimir Jara Vera and Dany Ortiz, ABC Color [Internet version], December 23, 1999, 

as translated for FBIS, “Police Conduct Operation to Intimdate Islamic Extremists,” December 23, 1999 (FBIS 

Document ID: FTS19991223001521). 

300 La Tercera de la Hora [Internet version-www], November 14, 2001, as translated for FBIS, “Hizballah-Linked 

Businessman Acknowledges Having Businesses in Chile, US,” November 14, 2001 (FBIS Document ID: 

LAP20011114000075200). 

301 ABC Color [Web site], November 9, 2001, as cited by “Paraguay: Lebanese Man with Alleged Hezbollah Links 

Arrested in Ciudad del Este,” BBC Monitoring, November 9, 2001. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

73

tax evasion. He was indicted for running a business without accounting books, using falsified 

public documents, and tax evasion in 1998 and 1999.302

Alleged Hizballah leader Sobhi 

Mahmoud Fayad (right) talks 

with Iman Tareb Khasraji at an 

Al-Mukawama base in Brazil. 

Source: ABC Color [Asunción]; 

cropped image; January 16, 2002. 

Paraguayan authorities reportedly believe that Sobhi Fayad, along with Barakat and 

fugitive Ali Hassan Abdallah, are the coordinators of a Hizballah financial network in the TBA. 

In addition, Fayad is a brother of an important Hizballah member in Lebanon. Authorities regard 

Fayad as one of the main Hizballah chiefs assigned to the TBA.303 Police found in his possession 

documents for funds sent to Canada and Lebanon. Fayad’s 

influence within the Lebanese community in the TBA was 

emphasized by reports that he was seen in the company of the 

new Lebanese ambassador in Paraguay, Hicham Hamdam, who 

presented his credential in Asunción in October 2001, on 

various occasions when the diplomat attended local activities. 

A letter that Fayad received from Lebanon allegedly proves 

that in 2000 alone he sent more than US$3.5 million to the 

“Martyr” Social Beneficent Organization, which is linked to the 

Hizballah and which looks after children whose parents died at 

the service of the Hizballah and who are considered martyrs.304

Investigators confirmed the presence of Fayad at an AlMukawama operations center. According to Interior Ministry 

sources, he appears in one of the surveillance photos chatting 

with Iman Tareb Khasraji (on left in photo) in early November 

2001.305

Fayad initially became a fugitive in October 1998.306

Paraguayan authorities had arrested him in 1998, while he was 

 

302ABC Color [Internet version-www], November 22, 2002, as translated for FBIS (FBIS Document ID: 

LAP20021122000047). 

303 Libanês preso no Paraguai é "peso pesado" do Hezbollah, diz polícia” (Lebanese Imprisoned in Paraguay Is a 

Hizballah Heavyweight, Police Say), estadao.com.br [Website of O Estado de São Paulo], November 9, 2001. 304 Roberto Cosso, “Extremistas receberam US$50 mi de Foz do Iguaçu” (Extremists Received US$50 million from 

Foz do Iguaçu), Folha de S. Paulo, December 3, 2001; and ABC Color [Internet version-www], May 28, 2002, as 

translated for FBIS, “Paraguay: Daily Reports More Evidence of Barakat's Contributions to Hizballah,” May 28, 

2002 (FBIS Document ID: LAP20020528000073). 

305 ABC Color [Internet Version-www], January 16, 2002, as translated for FBIS, “Paraguay: Court Investigates 

Hizballah Base Photos” (FBIS, LAP20020116000091). 

306 Bartolomé, 15. 
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observing the U.S. Embassy in Asunción, either before or after requesting an appointment in the 

facility. He was later released after cooperating with authorities.307 In October 1999, Fayad was 

again arrested in front of the U.S. Embassy in Asunción, after having requested a visa. On that 

occasion, he was questioned on the basis of the suspicions of U.S. officials, but he was later 

again released for lack of evidence against him. 

Mehri, Ali Khalil (Hizballah) 

Aftermath of the bombing of the ArgentineIsraeli Mutual Association (AMIA), Buenos 

Aires, July 18, 1994 

Source: www.terra.com, AP

The relationship between the TBA underworld and Middle East terrorism became clearer 

in February 2000, when Paraguayan authorities arrested Ali Khalil Mehri, 32, a newly 

naturalized Paraguayan citizen born in Lebanon. Considered one of the principal Hizballah fundraisers in the TBA, Mehri was arrested during a 

police raid of his apartment at the Panorama II 

building in Ciudad del Este on February 25, 2000. 

Shortly thereafter, he escaped and has eluded 

Interpol’s attempt to capture him.308 At the time 

that Mehri disappeared, Argentine authorities 

were interested in questioning him in connection 

with the two unsolved bombings of Israeli targets 

in Buenos Aires in the early 1990s—that of the 

Israeli Embassy on March 17, 1992, and a Jewish 

community center (AMIA) on July 18, 1994.309

Reportedly, Merhi had access codes to restricted Web sites that promote international 

terrorism, and when they raided his apartment, police found software that he allegedly was 

distributing to raise money for Al-Muqawamah.310 The software features film footage of terrorist 

attacks and interviews with suicide bombers before they died. It also provides a bank account 

number in Lebanon, where money could be sent to support Al-Muqawamah. In a certified 

 

307 “Libanês preso no Paraguai.” 308 ABC Color, November 5, 2001, as translated for FBIS, “Barchini's Calls Under Scrutiny, New Antiterrorist 

Officials,” November 5, 2001 (FBIS Document ID: LAP20011105000019). 

309 Kevin G. Hall, “Officials Link Pirated Goods in Paraguay to Terrorism: Money Sent on to Hezbollah,” San 

Diego Union –Tribune, April 15, 2001, A19. 310 Hall, San Diego Union –Tribune. 
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translation of the CD's Arabic contents, an unidentified radical leader exhorts listeners to strike at 

the United States and Israel.311 

Other documents seized during the raid included fund-raising forms for a group in the 

Middle East named Al-Shahid, ostensibly dedicated to “the protection of families of martyrs and 

prisoners,” as well as documents of money transfers to Canada, Chile, Lebanon, and the United 

States of more than US$700,000.312 British intelligence subsequently identified Mehri as a 

potential al Qaeda financier.313 Paraguayan authorities charged Mehri with piracy of computer 

programs and CDs and with selling millions of dollars of counterfeit software and funneling the 

proceeds to Hizballah. Apparently aided by his large campaign contributions to powerful 

members of Paraguay’s ruling Colorado Party, Mehri escaped from prison in June 2000 and fled 

to Syria.314 In late September 2001, he was located in Syria, and Paraguay asked Interpol to 

arrest him, but he managed to escape.315

Mukhlis, El Said Hassan Ali Mohamed (al-Gama’a al-Islamiyya)

Argentina’s Secretariat for State Intelligence (SIDE) has investigated the Egyptian AlSa'id Ali Hasan Mukhlis (also spelled Mokhles), 31, who has been identified as having contacts 

with Saudi Arabian members of a group of Osama bin Laden militants in the TBA. Mukhlis, an 

Egyptian who had trained in Afghanistan and lived in Saudi Arabia and was a member of the 

Islamic fundamentalist group al-Gama’a al-Islamiyya, was suspected of participating in the 

massacre of 62 foreign tourists at Luxor, Egypt, on November 17, 1997. A native of the coastal 

city of Port Said, Mukhlis left Egypt in the early 1990s, fearing random arrests of Al-Gama'a 

members. 

311 Hall, San Diego Union –Tribune. 312 “Comandos terroristas se refugian en la triple frontera” (Terrorist "Commandos" Hide in the Triborder Region), 

El País [Colombia], November 9, 2001. 313 Roslyn A. Mazer, “From T-Shirts to Terrorism: That Fake Nike Swoosh May Be Helping to Fund Bin Laden's 

Network,” Washington Post, September 30, 2001, B2. The U.S. Embassy cancelled the visa issued to Deputy Angel 

Ramón Barchini to enter the United States because of his alleged links with suspicious Arab extremists, including 

Mehri, whose escape he allegedly abetted. See ABC Color, November 5, 2001, as translated for FBIS, “Barchini's 

Calls Under Scrutiny, New Antiterrorist Officials,” November 5, 2001 (FBIS Document ID: LAP20011105000019). 314 Roslyn A. Mazer, “From T-Shirts to Terrorism: That Fake Nike Swoosh May Be Helping to Fund Bin Laden's 

Network,” Washington Post, September 30, 2001, B2. 315Bartolomé, 11, citing “Detectan en Siria presencia de megapirata libanés prófugo” [Lebanese megapirate fugitive 

detected in Syria], ABC, September 27, 2001. 
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El Said Hassan Ali Mohamed Mukhlis 

Source: CANAL 10 [Montevideo], 

Edición Internet, March 22, 1999.

Argentine security suspected that the detonators used in the 1994 AMIA attack were 

secured in the TBA and linked Mukhlis to that operation. Argentine security believed that 

Mukhlis established terrorist cells in Foz do Iguaçu to raise funds, to manufacture counterfeit 

documents, and to maintain contact with Hamas and Hizballah sympathizers. After living with 

his family in Foz do Iguaçu in 1998, Mukhlis was arrested at a border control station in El Chuy, 

Uruguay, on the Brazilian-Uruguayan border on January 26, 1999, as he tried to leave Brazil 

using a fake Malaysian passport. Contacted by bordercontrol authorities, the CIA reportedly requested that he 

be detained on charges of having participated in the 

1997 terrorist attack that killed 62 U.S. and European 

tourists in Luxor. At the time of his arrest, Mukhlis was 

allegedly en route to Europe for a meeting with another 

al Qaeda terrorist. Egypt immediately began a lengthy 

legal struggle to extradite Mukhlis. In mid-1999 Egypt 

demanded that Uruguay extradite Mukhlis on the 

accusation in absentia of having participated in the Luxor attack. Uruguay’s Supreme Court 

approved the extradition request in early May 2003. 

Mukhlis’ wife, Sahar (Sarrah) Mohamed Hassam Abud Hamanra, was arrested along 

with her husband in 1999 but immediately released. At the time of her arrest in Uruguay, 

Hamanra produced Brazilian documentation that Brazil’s Federal Police (PF), which had already 

investigated her for one month, declared false. She is on the list of 100 people that the FBI 

wanted to interview after September 11. Just hours after the hijacked planes crashed into the 

World Trade Center and the Pentagon, the FBI reportedly requested South American security 

services to intensify efforts to locate Mukhlis’ wife. Law enforcement sources were quoted in the 

report as saying that Hamanra could be the contact between al Qaeda and the Arab community in 

the TBA.316

According to official sources, citing the SIDE, Mukhlis received military training in 

Afghanistan from Al-Jama'at al-Islamiyah in the 1980s. He was later sent to Foz do Iguaçu by 

bin Laden. In that Brazilian city, Mukhlis allegedly “formed terrorist cells to collect funds for the 

 

316 Martin Arostegui, “Search for Bin Laden links looks south,” www.autentico.org [UPI via COMTEX], October 

12, 2001. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

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Middle East and to conduct logistical support activities, such as forging passports or other 

documents. That false documentation was meant for activists in the Islamic Jihad.” Furthermore, 

officials asserted that “he had a mission to make contact with Hamas and Hizballah 

sympathizers” in Ciudad del Este, Foz do Iguaçu, and São Paulo. 

In a ruling made public on October 5, 2001, an Uruguayan appeals court approved the 

extradition of Mukhlis, conditioning its approval on commitments from Egypt to not apply the 

death penalty, to respect due process, and to not try him on the charge of falsification of 

documents, for which he was already convicted in Uruguay. However, an appeal of the ruling to 

the Supreme Court was expected to take another 12 months. The appeals court reportedly 

indicated that Mukhlis was trained in Afghan camps commanded by Osama bin Laden.317

al-Qadi, Marwan ‘Adnan (“Marwan al-Safadi”) (Hizballah) 

Marwan ‘Adnan al-Qadi (“Marwan al-Safadi”), 40, participated in the bombing of the 

World Trade Center on February 26, 1993. He was arrested in November 1996 in connection 

with a plot by Islamic groups in the TBA to blow up the U.S. Embassy in Paraguay that month. 

Police who raided his apartment in Ciudad del Este found it filled with explosives, pistols 

equipped with silencers, double-barreled rifles, false Canadian and U.S. passports, and a large 

amount of cash. Al-Qadi fled to Asunción, where Paraguayan police detained him. Two days 

later, U.S. officials escorted him to the United States.318

Although extradited to the United States and sentenced to 18 months in prison, al-Qadi 

was deported to Canada, where he received a nine-year prison sentence for drug trafficking. AlQadi escaped from Canada’s prisons three times and finally succeeding in escaping from prison 

in Montreal, with the help of Hizballah elements in that area, and fleeing to South America with 

a false passport. Arrested by Brazilian authorities, he again escaped three times from prison in 

Brazil before reaching Ciudad del Este.319

317 El Nuevo Herald [Miami], October 6, 2001, from AFP; New York Times, November 27, 2001, citing a report 

published on October 5, 2001, in the Uruguayan daily El Observador. 318 Humberto Trezzi, “EUA pressionam Brasil a colaborar” [USA pressures Brazil to collaborate], Zero Hora, 

September 19, 2001. 

319 Trezzi, Zero Hora. 
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Figure 3. Drug-Trafficking Routes in the Tri-Border Area (TBA), 2002 

Source: http://www.igeo.ufrj.br/fronteiras/pesquisa/drogafoz.htm. afoz.htm. 
Library of Congress – Federal Research Division Tri-Border Area (TBA) 

79

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