PERMANENT COUNCIL OF OEA/Ser.GTHE ORGANIZATION OF AMERICAN STATES CP/CSH-1085/09

13 April 2009COMMITTEE ON HEMISPHERIC SECURITY Original: Spanish

REPORT ON ACTIVITIES DURING THE FIRST FIVE YEARS OF THE DECLARATION ON SECURITY IN THE AMERICAS (DSA) IN COMBATING TRADITIONAL THREATS AND

NEW THREATS TO SECURITY

PERMANENT MISSION OF PARAGUAYTO THE

ORGANIZATION OF AMERICAN STATES

No. 177-09/MPP-OEA

The Permanent Mission of Paraguay to the Organization of American States (OAS) presents its compliments to the General Secretariat of the Organization of American States – Committee on Hemispheric Security – to submit as an attachment hereto the electronic version of the “Report on the Activities During the First Five Years of the Declaration on Security in the Americas (DSA) in Combating Traditional Threats and Non Traditional Threats, prepared by the Ministry of National Defense of Paraguay.

The Permanent Mission of Paraguay to the Organization of American States (OAS) avails itself of the opportunity to convey to the General Secretariat of the Organization of American States – Committee on Hemispheric Security – renewed assurances of its highest consideration.

Washington, D.C., March 27, 2009

General Secretariat of the OASCommittee on Hemispheric SecurityWashington, D.C.

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MINISTRY OF NATIONAL DEFENSEDIRECTORATE FOR STRATEGIC POLICY AND INTERNATIONAL AFFAIRS

Department of International Affairs

REPORT ON ACTIVITIES DURING THE FIRST FIVE YEARS OF THE DECLARATION ON SECURITY IN THE AMERICAS (DSA) IN COMBATING TRADITIONAL THREATS AND

NEW THREATS TO SECURITY

OLD THREATSNo events relating to traditional threats have been recorded in the country

NEW THREATS, CONCERNS AND OTHER CHALLENGESReference: Declaration on Security in the Americas, approved in Mexico City, October 28, 2003

a. Terrorismb. Illicit trafficking in drugsc. Illicit trafficking in chemical substancesd. Trafficking in personse. Illicit trafficking in weaponsf. Transnational organized crimeg. Money launderingh. Protection of critical infrastructurei. Corruptionj. Smugglingk. Natural disastersl. Health measuresm. Povertyn. Environment (degradation)o. Transportation security

A. TERRORISM

This is a problem for all countries

Secretariat for the Prevention and Investigation of Terrorism (SEPRINTE)

No active terrorist cells have been detected in Paraguay

The Government of Paraguay has created the Secretariat for the Prevention and Investigation of Terrorism (SEPRINTE), to address terrorism issues, operating jointly with the National Police

Activities

In August 2003, through the efforts of SEPRINTE, a 30-year-old Lebanese citizen, Ali Nizar Darough, was sentenced to five years imprisonment for tax evasion. That person is a nephew

of Mohamad Darough Darough, data on whom were found in an agenda of Abu Zubaydah, a close collaborator of Osama Bin Laden.

In November of that same year, Assad Ahmad Barakat, a Lebanese citizen under asylum in Brazil, was prosecuted for various crimes in our country. He is regarded as the chief of the military wing of Hezbollah in the triple frontier zone.

In May 2004, Assad Ahmad Barakat was sentenced to six years in prison for tax evasion. On July 5, 2004 a female Paraguayan citizen was arrested for making secret telephone calls

to foreign citizens in Ciudad del Este. Between July 3 and 16, 2004, training assignment for a SEPRINTE staff member with the

Investigations Police of Chile. Training assignment for a SEPRINTE staff member with the National Police of Peru. On August 10, 2004 the Lebanese citizen Hatem Ahmad Barakat was arrested for

documentary fraud in Ciudad del Este. March 6-10, 2006, training assignment for two officials of SEPRINTE with the

Investigations Police of Chile. May 16-17, 2006, international conference organized by SEPRINTE in Asuncion on the

topic of Hezbollah. July 12, 2006, search of the premises of Shade Zaiter, in Ciudad del Este. On November 10, 2006, six staff members of SEPRINTE were awarded decorations by

RIART. On November 20, 2006 two commercial premises in Ciudad del Este were searched, in

connection with false documentation for Arab citizens. On July 25, 2007, Olga Cañete, an official of the Migrations Department of Ciudad del Este,

was arrested for providing false documentation to foreigners. On July 30, 2007, Graciela Ortiz Gutiérrez was arrested for providing false documentation to

foreigners. On December 28, 2007 the premises of the Discovery Import-Export company of Ciudad del

Este were searched. On May 22, 2008, operations relating to tax evasion were conducted in Salto del Guairá and

Pedro Juana Caballero, Casa MARINGA de HASSAM MELHEM.

Other data

Terrorism is not defined as a crime or offense in Paraguay, contrary to the provisions of Resolution 1373 of the UN Security Council approved and accepted by our country in 2001 following the terrorist attacks in New York and Washington.

Because there is no legal punishment for terrorism and money laundering, the Egmont Group, based in Brussels, comprising government financial intelligence units of developed countries, decided to impose sanctions on Paraguay with respect to money-laundering.

The Chamber of Deputies of Paraguay approved amendments to the draft law presented by Sebastián Acha (Patria Querida), but the Senate rejected it. Consequently, the draft was sent back to the Chamber of Deputies, which in the end rejected the bill to punish terrorism and its financing.

It should be stressed that Paraguay is living in a globalized world and it must respect the mandates of international agencies and incorporate them into its domestic legislation, because we are

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talking about money laundering and terrorism which are deemed transnational crimes that can affect any country in the world, according to the Resolution of the UN Security Council.

Source: data provided by SEPRINTE

B. ILLICIT TRAFFICKING IN DRUGS

National Antidrug Secretariat (SENAD)

Based on the philosophy of combating drugs, a threat that attacks the present and the future of people and of the entire world, the National Government of Paraguay created, in 1992, the National Antidrug Secretariat (SENAD), through Law 108/92, defining it as a government agency responsible for implementing and enforcing the national government's policy to combat drug trafficking, to prevent, retrieve and control the laundering of the proceeds of illegal trafficking in narcotics and psychotropic substances, and connected crimes; drug addiction, control and prevention of trafficking in dangerous drugs, coordinating activities among governmental and nongovernmental bodies that are working with programs to combat drug trafficking and drug addiction.

SENAD, under presidential authority, is responsible for enforcing the law on drugs and drug trafficking.

SENAD comes directly under the office of the President of the Republic, and is headed by a Minister-Executive Secretary and an assistant secretary, appointed by the executive branch. Its tacit mission,, which is clearly established, is to wage a committed and unremitting struggle against one of the worst enemies of peoples' physical, moral and spiritual health, with the conviction that in the face of this terrible scourge we must all stand united, because it attacks the very values that are fundamental to our society, and we must respond effectively to the challenge of such a great evil, for which the support of the national and international community is enormously useful.

In pursuit of its duties and in order to be able to do these things, SENAD has established thematic areas for carrying out the national anti-drugs plan, consisting of:

Activities

Treatment and Rehabilitation Unit

Established in August 2001 after approval of the National Anti-Drugs Plan, which regards treatment and rehabilitation as an independent area.

It currently comprises the Toxicology Department, the Psychology Department, and the Self-Help Department.

Control and inspection by the Registry and Control Division

Acts pursuant to articles 1, 2 and 3 of Law 1340/88. Registration of external and internal pharmacies, laboratories, import and export firms. Inspection of external and internal pharmacies, laboratories, import and export firms.

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Registration of managers and technical directors. Registration of airstrips. Verification of customs documentation for imports and exports. Reception of monthly reports, pursuant to article 4 of Law 1340/88.

Ongoing cooperation with:

a. Ministry of Public Health and Social Welfare. b. Public Prosecutor’s Office (Fiscalía). c. Public Attorneys’ Offices (Ministerios Públicos). d. National Police. e. Armed Forces.

International and regional information sharing

Products controlled:

Products listed under the Single Convention (Vienna, 1961). Narcotic Drugs Schedules I, II, III, IV. Convention on Psychotropic Substances (1971), Schedules I, II, III, IV. List of medications control bylaw 1340/88.

The following have been developed:

Alternative Development Program. "Paraguayan Drugs Observatory" Department. Financial Crimes Investigation Unit.

Currently, the Financial Crimes Investigation Unit (UIDF) is cooperating with the economic crimes prosecution office to supply evidence to the public attorneys, and is also cooperating with other national institutions in order to combat money laundering.

These are some of the projects included in the National Anti-Drugs Plan under the alternative development program.

1. Preparation of an alternative development program 2. Identification and characterization of marijuana growing areas 3. Community development, education. 4. Community development, security areas 5. Community development, communications (telephony) 6. Community development, communications: neighborhood roads 7. Immunity development, health center 8. Community development, drinking water, wastewater and irrigation 9. Progressive eradication and monitoring of marijuana growing in support of the

alternative development program 10. Income-generating crops 11. Specialized Armed Forces unit for aerial surveillance and satellite detection.

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Other data

For more information on SENAD activities during the last five years visit: http://www.senad.gov.py/anuarios.html

C. ILLICIT TRAFFICKING IN CHEMICAL SUBSTANCES

National Chemical Safety Commission (CNSQ). National Commission for Prevention and Response to Biological Emergencies

(CONAPREB).

The National Chemical Safety Commission (CNSQ) was created by executive decree 21,919 of August 11, 2003. Its president is appointed by the Secretary of the Environment. Its purpose is to address the need for managing chemical substances nationwide and to have a multidisciplinary, interagency and cross-sectoral body that can coordinate the activities of the various agencies and institutions involved in this area, in order to promote community and private sector participation and to strengthen institutions at various levels through human resource development, the creation and use of up-to-date information systems, and the provision of financing.

The commission is responsible for coordinating the design and development of the National Plan for Managing Chemical Substances in Paraguay.

It has a mechanism to allow the different sectors involved to participate and it has decision-making power to ensure coordination and to implement the National Plan for Managing Chemical Substances in Paraguay.

Another of its functions is to maintain a permanent coordination system among the entities responsible for the management of chemical substances, and to establish duly coordinated policies, strategies and activities.

It also maintains cooperative ties nationally and internationally for implementing and executing the future Plan for Managing Chemical Substances in Paraguay.

The National Commission for Prevention and Response to Biological Emergencies (CONAPREB) was created by decree 20,997 of April 30, 2003, in order to prevent and respond promptly and adequately to emergencies caused by biological, chemical, and radioactive agents and other weapons of mass distraction, whether accidental or provoked by terrorists, thereby contributing to the safety of people and the environment.

CONAPREB is headquartered and operates within the Ministry of National Defense. Its activities are directed and administered by an executive commission headed by a president (from the Ministry of National Defense). That commission is composed of representatives from each state agency involved, and will have a permanent secretariat, a technical support office, a prevention committee, a response operations committee, and a damage evaluations and repairs committee.

Source: executive decrees

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D. TRAFFICKING IN PERSONS

Ministry of the Interior/General Directorate of Migrations (DGM)

In order to combat the problem of trafficking in persons, Paraguay created (by Law 978/96) the General Directorate of Migrations, within the Ministry of the Interior, the body responsible for implementing the national migrations policy.

Activities

Regulations have been issued for the Interagency Board for the Prevention and Suppression of Trafficking in Persons in Paraguay, created by decree 5093. Four working commissions have been established jointly with other government institutions and civil society.

The migrations policy document was prepared by the DGM with support from the International Organization for Migration (IOM), and was finalized at the end of February of this year.

Other data

The migrations policy was prepared by the DGM and is still awaiting ratification by presidential decree.

A number of circumstances explain this delay, including the political turbulence sparked by the reelection ambitions of the President of the Republic, Nicanor Duarte Frutos. In the middle of the year the director of the DGM was changed, and the former director (Carlos Liseras) became secretary-general to the office of the President of the Republic. This demonstrates that the government now attaches less political importance to the DGM: indeed, the current director is a former journalist and he has neither the courage nor the political backing of the previous one.

Under these conditions, promulgation of the migrations policy will perhaps have to wait for the political waters to calm, and this is unlikely to happen until the beginning of next year. With respect to the international migrations policy, governmental and civil society organizations in the Interagency Board to Combat and Prevent Trafficking in Persons are lobbying the pertinent bodies to have Paraguay ratify the Protocol on the Rights of Migrant Workers and Their Families. As well, during the sixth MERCOSUR convention on migrations, held in Asunción in May 2006, Paraguay asked member countries to ratify this international instrument.

Principal areas of concern

Human trafficking situation in Paraguay

Despite its efforts, and its clear willingness to continue to combat this activity, the government has failed to contain this scourge, which is striking Paraguayan society, and especially young women, with increasing severity

Victims of human trafficking

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This year, once again, more than 30 women were rescued after being held against their will in Spain and in countries of the region. The Spanish authorities have broken up a criminal ring that was trafficking in Paraguayan women for purposes of enforced prostitution. In the city of Almansa, Spain, 19 Paraguayan women were being held and forced to remain illegally in the country as prostitutes. They were rescued after two of them escaped and reported the situation of the other girls at the club to the provincial police of Ciudad Real.

F. TRANSNATIONAL ORGANIZED CRIME

Ministry of the Interior/National Police

Activities

Number of kidnappings

YEAR NUMBER

2003 7

2004 5

2005 1

2006 5

2007 10

TOTAL 28

Persons arrested for human trafficking:

YEAR Male Female TOTAL

2006 3 1 4

2007 1 5 6

TOTAL 4 6 10

Statistics on kidnappings in Paraguay

2003

1. MARIANGELA MARTINEZ HOUSTIN, freed after six days in captivity.

2. Maria Ines Vania, freed after six days in captivity.

3. Oscar Arturo Barboza Gomez, the son of a general commissioner of the National Police, was found murdered in the coastal area of Limpio, with several stab wounds. Investigations revealed that

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the assailants had called the victim, offering him a cell phone; he went to the appointed place, where the assailants demanded that he withdraw cash from a bank machine: he refused, and they killed him.

4. Daniela Ayelen Franco Aguilera, a three-year-old girl, was kidnapped and rescued several hours later after the police discovered that a household employee was the brains behind the operation. The crime began in a dwelling in Sajonia, and culminated in a house in Santisima Trinidad, where the kidnapper was holding the child, demanding a ransom of 15 million guaranis.

5. Maria Mercedes Elizeche Martinez, released after six days of captivity in Villa Oliva.

6. Cesar Cabral, released after payment of ransom.

7. Gilda Maria Stella Vargas Gastón, kidnapped from her home, the ransom was paid but she has not yet been released.

8. Rodolfo Alliana Rodríguez, found dead in the waters of the Paraguay River, near the mouth of the Río Bermejo (also known as the Colorado), at the place known as Arara‘a, downstream from the port of Pilar.

2004

1. Hugo Quevedo Rojas, kidnapped and released after the ransom was paid.

2. Sebastián Maria Llano Cavina, released after 70 hours in captivity, after payment of ransom.

3. Mirian Pérez De Gilbakian and Gopala Gilbakian Pérez, victims of an attempted kidnapping aborted by the police.

4. Hugo Ramón Zayas, self-abduction, feigned his kidnapping, demanding ransom of Gs. 40,000,000 from his father. He turned himself in to the prosecutor's office and gave a confession. He is now awaiting trial.

5. Cecilia Mariana Cubas Gusinky, 31 years old, was kidnapped in the afternoon of September 21, 2004, when she was intercepted while returning home from work in Laguna Grande, San Lorenzo. The kidnappers demanded US$5 million for her release, and her parents paid the ransom. Her body was found on February 16, 2005, hidden in a tunnel under a dwelling in the Mbocayaty de Ñemby district.

Persons convicted for the kidnapping and murder of Cecilia Cubas

1. Omar Feliciano Martínez, 35 years.2. José Domingo Hidalgo Ayala, 24 years 9 months.3. Anastasio Mieres Burgos, 35 years.4. Francisca Andino Puhomer, 30 years.5. Rosalba Jara Drakeford, 5 years.6. Lidia Samudio Medina, 5 years.7. Manuel Portillo Gómez, 24 years.8. Roberto Otazú Busto, 25 years.9. Sebastian Ozorio González, 21 years 9 months.10. Vaciano Ruben Acosta, 24 years 9 months.11. Pedro Chamorro Melgarejo, 24 years 9 months.

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12. Aldo Meza, 15 years.

Persons still at large in the Cecilia case

1. Manuel Cristaldo Mieres2. Magna Maria Meza Martínez3. Carlos Ramón Espinola González4. Lorenzo González Martínez5. Osvaldo Daniel Villalba Ayala6. Isax Burgos Aguila7. Oscar Luis Benítez8. Severiano Martínez9. Sebastián Osorio González10. Gabriel Zarate Cardozo11. Gilberto Chamil Setrini Cardozo12. Vidalina Cardozo Caceres, alias Analia13. Nimio Cardozo Caceres alias Homero or Anibal14. Aldo Alal Ariel Avalos Benitez15. Alcides Mereles Ruiz

Fugitives who have requested political asylum

Agustín Acosta González Simeón Bordón Salinas Basiliano Cardozo Gimenez Gustavo Lezcano Espinola Arístides Luciano Vera Silguero Roque Rodríguez Torales

2005

1. Jacob Unrau Schoeder, self-abduction. The prosecutor laid charges of simulating punishable acts and extortion against the Mennonite pastor Jacob Unrau, who allegedly feigned his own kidnapping and sent text messages demanding payment of 100 million Guaranis in ransom.

2. Evelin Peichih Kuo Almeida, abducted for approximately 4 hours. Ransom was not paid.

3. Christian Roberto Paredes Soler, self-abduction. He wrote a note to his relatives saying that he had been kidnapped and that they should not report the fact, that he would be all right as long as the police and the press did not become involved. After three days, his relatives reported the case to the police, who after investigating found that it was a case of self-abduction, conceived by the victim to make up for a cash shortfall in the foreign exchange bureau which he ran, and which belong to his uncle.

4. Pablo José Maria Giménez Jara, kidnapped by his girlfriend Aida Urunaga, and released after intervention by the police and the prosecutor’s office.

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5. Naomi Senoski, a two-year-old child, abducted by her mother KATIA ELIZABETH SENOSKI in order to extort money from the father. The woman was charged with feigning a punishable deed.

6. Maria Magdalena Samaniego Genes, self-abduction, wrote several notes to her family, in conspiracy with other persons, demanding ransom of Gs. 6,000,000, which was paid

2006

1. Rafaela Giménez de Núñez. On March 2, 2006 she was allegedly intercepted by various persons shortly after entering a supermarket located on Avda. Mcal. López, and was abandoned on Avda. Félix Bogado. According to the supermarket's security video, the woman entered and left the supermarket alone.

2. Edson Armoa Doldan, a Brazilian nationality, 23 years old. At approximately 5 AM on July 30, 2006, five persons entered his home in Mbocayaty, Dpt. of Guaira, claiming to be SENAD personnel conducting a search, carrying weapons and wearing masks, they proceeded to steal Gs.150,000,000 in cash and they abducted the young man. The gang consisted of police personnel, who were identified by the investigators.

3. Jacobo Giesbrecht, August 28, 2006, of Mexican nationality, living in Colonia Río Verde, Dpt. of San Pedro, who was seized by his captors on his farm. The ransom was paid by his relatives. Two of the alleged kidnappers were arrested by the police

4. Florio Davalos, self-abduction. He left his home on Saturday, August 26, 2006 and was found by a police search in Cñia. Tacuruty in the city of Villeta.

5. Kiara Acuña, December 13, 2006, an infant of 45 days, taken from her parents dwelling by an unknown person wielding a knife, who overpowered the mother. The child was found abandoned on the street.

2008

Luís Alberto Linstron, a rancher kidnapped in the first days of August near Tacuati -San Pedro, and held captive for 43 days.

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GOODS SEIZED INTELLECTUAL CRIMES 2003Cigarettes 53,302 packsAnimated figures 103,968 unitsPrinting stencils 56 unitsCD 4,469 unitsBurner 1 units

GOODS SEIZED INTELLECTUAL CRIMES 2004Video games 13,103 unitShampoo 11,495 unitWatches 17,581 unitBurners 33 unitGarments 3,655 unitMedications 50,003 unitSports equipment 19,150 unitCameras 533 unit

GOODS SEIZED INTELLECTUAL CRIMES 2004Lighters 692,960 unitCPU 9 unitCigarettes 315,519 packsCD, DVD 43,565 unitLeather purses, belts 41,908 unitCD covers 144,157 unitComputer accessories 498 unit

GOODS SEIZED INTELLECTUAL CRIMES 2005Watches 17,451 unitGarments 12,574 unitCameras 228 unitCD, DVD 109,886 unitCD covers 1,175,815 unitCigarettes 201,850 packsCigarette wrappers 14,134,000 unitMedications s 103 unitComputer accessories 6,853 unitCell phone accessories 84,383 unitLeather purses, belts 136 unit

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GOODS SEIZED INTELLECTUAL CRIMES 2006Cigarettes 291,950 packMedications 503,491 unitGarments 988,887 unitBurners 49 unitElectronics 642 unitComputer accessories 146 unitCD, DVD 763,449 unit

GOODS SEIZED INTELLECTUAL CRIMES 2007    QUANTITY4 Cell phone batteries 2,449 units6 CPU 43 units7 Eau de vie 750 units9 Blank discs 270 units

10 Cassettes for video games 4,257 units15 Coordinators 19 units16 Lorenzetti showerheads 4,478 units17 Electronics (digital cameras; Rep.DVD, Filmad) 4,515 units18 Soft drinks (Coca-Cola, Sprite, Fanta and Aquaris) 300 units19 (Labels, boxes, packs etc) 5,000 units20 Syringes 9,800 units

GOODS SEIZED INTELLECTUAL CRIMES 2007QUANTITY

22 Medications 1,236 units23 Perfumes 86 units24 Garments 1,195 units25 Prod.(HELLO KITTY, BOB SPONJA, SUPERPODEROSAS, etc.) 12,993 units26 Leather goods (LUIS VUITTON, FENDI, ARMANI) 81 units29 Watches 1,019 units

GOODS SEIZED INTELLECTUAL CRIMES 2008CD, DVD 8,554 unit Medications 1,579 unit Burners 43 unit Leather purses, belts 566 unit Garments 1,500 unit Cameras 4 unit

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Offense 2003 2004 2005 2006 2007 2008 Confiscation of firearms   - - 8 10 9 1

Statistics on Narcotics

TYPE OF NARCOTIC UNITS. 2001 2002 2003 TOTAL

  MEASURE       .

Cocaine Kg. 0,024 139,872 0,110 140,006Pressed marijuana Kg. 3.192,983 1.878,010 6.636,169 11.707,162Ground marijuana Kg. 0,000 96,005 16.800,009 16.896,014Marijuana seed Kg. 0,000 25,500 5,000 30,500Hashish Kg. 0,009 0,000 26,000 26,009Marijuana plantations Ha. 32 92 2 126Marijuana plants Units. 0 0 11 11

Controlled medications Units. 0 58 16 74Vehicles with drugs Units. 0 2 22 24Buildings or fields with drugs Units. 0 0 17 17Persons arrested Units. 33 30 92 155Weapons seized Units. 0 3 13 16

Statistics on trafficking in persons

YEAR CASES WOMEN GIRLS2003 29 109 372004 61 236 562005 9 39 72006 12 16 22007 4 15 2

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2008 CASES WOMENMarch 1 2April 1 1May 1 1

TOTAL 3 4

The institution that investigates organized crime in Latin American countries is WOLA, the Washington Office on Latin America, which runs a program for investigating organized crime as a catalyst of corruption in Latin America.

For more information on activities of the National Police: Fax: 595-21-445858 Fax : 595-21-446828 E-MAIL:policia.paraguaya@gmail.com.py

Source: data provided by the National Police and Diario Iniciativa Ciudadanas from Publication Nº 16

G. MONEY-LAUNDERING

Secretariat for the Prevention of Money-Laundering

The national government is committed to combating criminal acts that impede the formalization of the economy, with special emphasis on serious crimes such as terrorism that are directly related to money laundering.

To prevent and repress these unlawful attempts to legitimize assets, the government has created the Secretariat for the Prevention of Money-Laundering (SEPRELAD), through a law.

This body is now responsible for enforcing the rules for preventing and suppressing crimes that affect the functioning of the economy.

Activities:

SEPRELAD has prepared programs and projects for implementing the policy established by its senior authorities, as described below:

It is promoting the harmonization of administrative measures against money laundering, using internationally accepted techniques and exercising proactive supervision and control over compliance with those rules, designed to strengthen the system's capacity to prevent the use of the national economic system, and to detect any violations immediately.

Regulations for the prevention of money-laundering:

Pursuant to Article 2 (1) of Law 1015/97, SEPRELAD has issued mandatory administrative regulations for the following sectors:

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Resolution Nº 262/07 for Cooperatives.

Resolution Nº 263/07 for Insurance

Resolution Nº 264/07 for Real Estate.

Resolution Nº 265/07 for Pawnshops.

These rules fill a regulatory void in those sectors, and are designed to formalize the national economy, consistent with the government's policy.

The sectors themselves were closely involved in drafting the regulations, which carry broad consensus. The training program for 2008 includes seminars for publicizing the content and scope of the various provisions.

Those provisions will be key points in the country evaluation of Paraguay relating to money laundering and the financing of terrorism that the IMF will be conducting in the first half of 2008.

SEPRELAD is aware that this evil is global in nature, and it has taken a series of steps to approve legislation that will place Paraguay, as a member of the OAS and the United Nations, in the concert of nations cooperating in this area and avoid penalties for noncompliance.

As a member of the Interagency Commission, constituted by decree 15,125/01 of January 10, 2007, SEPRELAD participated at the working meeting of the Committee on Legislation and Codification of the Chamber of Deputies, responsible for reforming the criminal code, where it explained the importance of criminalizing terrorism and its financing. SEPRELAD has coordinated the interagency working group for preparing a special draft law to criminalize terrorism and its financing, working jointly with representatives of the Attorney General's office and the judiciary. The final draft of the law against terrorism and the financing of terrorism is to be presented for analysis and study in the first half of 2008.

A new provision making the financing of terrorism a crime is planned as an addendum to Law 1015/97, drafted by the General Directorate of UAF-SEPRELAD.

SEPRELAD is an active participant in the consultation mechanism of the "3+ 1 Group" on security along the triple frontier (Argentina, Brazil, Paraguay and United States).

Official representations

15th Plenary Meeting of the Egmont Group, May 28 to June 1, 2007, Hamilton, Bermuda. 16th Plenary Meeting of GAFISUD Representatives, December 4-7, 2007, Buenos Aires,

Argentina. 24th Meeting of the MERCOSUR Working Subgroup 4 (STT-4) on Financial Matters,

committee for the prevention of money-laundering and the financing of terrorism, Central Bank of Uruguay, Montevideo.

24th Meeting of the Group of Experts for the Control of Money-Laundering, Santiago, Chile.

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Fifth Meeting of the Bolivia-Paraguay Committee on Illicit Drug Trafficking, Drug Addiction and Alternative Development, Ministry of Foreign Relations, Asunción, Paraguay.

Chief areas of concern

An amendment of Law 1015/97 is considered absolutely essential. Only with such an amendment can plans and decisions be implemented, as the current law makes preventive and suppressive actions impossible, and also poses problems of autonomy and administrative efficiency.

Source: data provided by SEPRELAD

H. PROTECTION OF CRITICAL INFRASTRUCTURE

National Armed Forces (FFAA)National Police (PN)

Critical Infrastructure Identified

Symbolic institutions

Palacio de Gobierno (President’s residence): it is protected by the Presidential Escort Regiment (FA).

National Congress. The Palace of Justice. Ministries. Secretariats. Provincial Government Centers. Municipalities. Central Bank of Paraguay: these institutions are protected by the National Police.

Hydroelectric dams

The Itaipu hydroelectric dam is a binational entity of Brazil and Paraguay, located on the Paraná River on the border between the two countries. It is the largest hydroelectric production facility in the world, and is of vital interest as part of the strategy for strengthening the economy through regional integration.

Armed Forces personnel are responsible for protecting it, along with civilian security personnel of the entity, from both countries.

The Yacyretá hydroelectric dam is a binational entity of Argentina and Paraguay, located on the Paraná River on the border between the two countries. It is of vital interest as part of the strategy for strengthening the economy through regional integration.

Armed Forces personnel are responsible for protecting it, along with civilian security personnel of the entity, from both countries.

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The Acaray hydroelectric dam is a national entity located on the right bank of the Paraná River on the border with Brazil, in the Department of Alto Paraná, District of Hernandarias and is of vital interest as part of the strategy for strengthening the economy through regional integration

Armed Forces personnel are responsible for protecting it.

Bridges:

Remanso Bridge Concepción-Puerto Militar Bridge Amistad Bridge San Roque González De Santacruz Puente Falcón-Clorinda Bridge Pozo Hondo-Misión La Paz Bridge Bridge over the River Tebicuary in Villa Florida

Airports:

“Silvio Pettirossi” International Airport. “Guarani” Airport. These airports are protected by the Armed Forces (FAP

“Mcal. Estigarríbia” Airport.This airport is protected by III CE-6 DI

Industries:

Petróleos Paraguayos (PETROPAR) Industria Nacional del Cemento (INC)

Entities:

National Electricity Administration (ANDE). Sanitation Services of Paraguay (ESSAP). Paraguayan Communications Company (COPACO)

The protection of these critical infrastructure facilities is a joint effort of the Armed Forces and the National Police.

Source: Department of International Affairs (DAI), Directorate of Policy, Strategy and International Affairs (DIPE), Ministry of National Defense (MDN).

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I. CORRUPTION

Public Prosecutor’s Office (Ministerio Público, MP) Office of the Comptroller General

The Transparency Unit (UTMP) was created to promote integrity and to define integrity policies within the MP, through an agreement signed with the Steering Council for the National Integrity System (CISNI), and is the central authority for judicial assistance under the OAS and UN anticorruption conventions, involving officials of the institution and participation of the citizenry. Its work is aimed at organizational and legal strengthening, making its management transparent and interacting with other government institutions, civil society organizations, and the general public.

The unit seeks to strengthen the institution by identifying administrative areas and processes that are vulnerable to corruption. In this, it works closely with other sections of the institution such as the Planning Directorate, the Inspector General’s Office, the Fiscal Management Control Unit, the Legal Advisor's Office, The Communications Directorate, the Training Center, and the Human Resources Directorate. It focuses on generating a culture of integrity through training officials in ethical values.

The UTMP does not receive complaints nor does it investigate and prosecute acts of corruption, which is the responsibility of the Specialized Unit against Economic Crimes and Corruption. Its function is confined to preventing and halting corruption within the institution, and proposing corrective measures.

Activities

Anticorruption plans and programs

“Threshold Plan” (Plan Umbral). Protection for Whistleblowers. National Integrity Plan. Support Unit against Public Corruption.

Progress in 2006

Strategic Plan. Internal Values Training System. Office of the Inspector General. Fiscal Management Control. Specialized Unit against Economic Crimes and Corruption. Evidence Directorate. Threshold Plan. Interconnection network and alternative communication technologies. Transparency map. Access to information and communication.

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The Office of the Comptroller General (CGR) According to the Comptroller General, in 2007 his office reported crimes against State assets totaling Gs.113,869,833,464, and information supplied to the Attorney General or the Prosecutor General.

In the view of the Comptroller General, the prosecution of economic crimes is deficient. The Comptroller General, Doctor Airaldi, sent a note to the Prosecutor General, Dr Reuben Candia Amarilla, under the Interagency Cooperation Agreement signed between the MP and the CGR on September 20, 2005.

Airaldi explained that his institution is pursuing administrative processes to comply with the agreement, that those processes are currently evolving, and that he needs statistical data on the cases opened by the MP on the basis of reports submitted by the CGR.

Among those reports, he cited the issue of the childbirth kits of the Ministry of Health, the nutritional supplements of the Ministry of education, acts of corruption in the municipal employees' retirement fund, and irregularities in various public entities such as the National Police, the Social Security Institutes, CONATEL, CONAVI, the Supreme Court, and several provinces and municipalities.

According to the CGR, one of the institutions most frequently pillaged is COPACO. Also mentioned were the national cement company, the ministries of education, health, public works, social action, and industry and commerce.

Thefts from the Paraguayan state do not tally with the imputations and, in particular, the accusations made by the prosecution office for economic crimes. Airaldi confirmed this, and declared his disappointment with the work of the prosecutors.

Corruption is public enemy number one. In a continent where 40% of people are poor, it is absolutely immoral. Stealing is prohibited by the best treatise on political morality, which is Ciclos, but to steal in this way in a society with so much poverty is a sign of insane egoism that must be combated with zero impunity. If society allows corruption to go unpunished, it is encouraging it. Letting a high-placed thief go unpunished sends the wrong signal to those who might be tempted down this road. (ABC Newspaper Saturday, September 13, 2008).

J. SMUGGLING

National Customs Directorate (DNA)

The National Customs Directorate introduced the Special Customs Surveillance department (DETAVE) and launched an anti-smuggling campaign as part of the "Threshold Program" on September 28, 2007.

The National Customs Directorate launched a campaign to introduce an elite new unit for combating smuggling, as part of the Threshold Program.

The media campaign consists of TV and radio shorts, printed materials (flyers, brochures and posters), and a video that tells about the creation of the new unit. Its purpose is to inform the public

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about its presence and operations throughout the national territory. The new unit is formed from the DETAVE and the members of the Customs Investigations Coordination Office (CAIA).

The Minister Counselor of the United States Embassy, Michael Fitzpatrick, pointed out that customs seizures have risen more than 70% since the DETAVE was launched.

The DETAVE is a multidisciplinary operating unit comprising the National Customs Directorate, the National Police, and the Paraguayan Navy. It receives operational and legal support from the Prosecutor General's office under a joint agreement. This represents an unprecedented effort of the customs authorities and the institutions with which it has pooled its resources and efforts to construct a country with a healthier and more competitive economy.

The members of DETAVE and CAIA were specially selected and trained during several months. The unit has teams for detecting smuggling and unlawful cargo, as well as operating and transportation equipment that includes all-terrain vans and motorboats. Over the last two years, the Threshold Program and the DNA have worked to establish the rules needed for the institution to control illegality and evasion effectively. Since it began operations, customs seizures have increased.

This work is being conducted under the Threshold Program, a program of reforms supported with technical assistance from the United States Agency for International Development and financing in the form of a $34.5 million grant from the Millennium Challenge Corporation.

K. NATURAL DISASTERS

National Emergencies Secretariat (SEN)

The Creation of the National Emergencies Secretariat (SEN) is an expression of the vision of States, created by Law 2615/2005 of June 10, 2005, to strengthen, politically and financially, a political institution that is strategic for the well-being of the Paraguayan people. That vision was shared and supported unanimously by both chambers of parliament.

The raison d'être of the Secretariat is mitigation and immediate action, sparing no effort or means, while society is reeling from the shock of some natural phenomenon, and rumors and speculations crowd out accurate information. It acts in the face of events that affect lives or property, with or without a declared state of emergency; it mobilizes its resources and as necessary those of other institutions in joint operations to respond promptly and effectively. No emergency must go without a response -- this is the philosophy of the SEN. Episodes that cause severe damage, such as unusually violent storms, droughts, fires, frosts, landslides, large-scale accidents, epidemics or flooding along the rivers will spark an operation that will not be blocked by natural obstacles: aircraft, helicopters, boats and land vehicles will transport food, construction materials and medical help to people who otherwise would be left to the mercy of the elements and an uncertain fate.

The SEN responds with help for the victims of natural phenomena. Prevention and training are areas in which it is particularly active in order to install human resources and systems for reducing risks and dealing with emergencies.

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In short, the last two years have seen fruitful work, but there is no room for hesitating or letting our guard down. The SEN seeks to be a beacon that people will look to when they suffer the ravages of nature or the mischief of mankind.

Objective

To prevent and counter the effects of disasters. To this end, to promote, coordinate and guide the activities of public, municipal,

departmental and private institutions for prevention, mitigation, response and rehabilitation.

Mission

To coordinate actions under the National Emergencies System (SISNE). To favor prevention and mitigation through risk management planning, supplemented by an

emergencies plan. Mitigation plans for responding to emergency situations or disasters and facilitating

rehabilitation

Activities

The SEN is working on many fronts to upgrade human resources and response tools. It has signed an agreement with the International Cooperation Agency of Korea (KOICA) to enhance the technical and operating level of the Secretariat and provide further training for staff. A similar partnership is underway with the Massachusetts Emergency Management Agency (MBMA) and the Massachusetts National Guard.

The institution will also gain greater operational capacity through a contribution from the Spanish International Cooperation Agency.

The SEN is a member of the volunteer humanitarian assistance program in Latin America sponsored by the OAS, the Inter-American Development Bank, and the White Helmets Commission of Argentina, for the purpose of providing humanitarian aid, combating hunger and poverty, and preventing emergency situations.

The SEN has contracted works for restoring the retaining wall and the pumping and drainage systems at Pilar and adapting them to climate change. Similar works have been undertaken at Alberdi and Concepción, and plans and funding have been arranged for doing the same at other towns along the Paraguay and Parana rivers.

On August 1, 2004, a fire that broke out in the Ykua Bolaños supermarket created a tragedy that generated unprecedented demands for assistance.

The government had to mobilize an enormous range of resources: fire trucks, social workers, hospital, transport and communications facilities, etc.

First stage: response and rehabilitation launched 48 hours after the event, and continuing for a week.

Second stage: Reconstruction, which included care and evacuation of patients for reconstructive surgery in Paraguay and abroad.

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All these activities were conducted within the framework of interagency coordination led by the CEN (National Emergencies Commission), throughout the duration of the emergency, and included the handling of donations in cash and kind that received from within the country and abroad.

In the face of the El Niño phenomenon and its potential impact on Paraguay, a contingency plan has been designed for responding to such a scenario.

In this context, the SEN has prepared an action plan for prevention, mitigation, response, rehabilitation and reconstruction of communities affected by an emergency or disaster situation.

On September 8, 2008, at the request of the governors of Hayes, Boquerón and Alto Paraguay states, the national government declared a state of emergency in the Occidental (Chaco) region in response to the drought that was placing indigenous communities in a critical situation.

Following the establishment of the Civil Defense Operations Center (COPCI) on the trans-Chaco highway, the SEN sent humanitarian aid and medical attention to 600 affected families every day.

The SEN is planning a 150% acceleration in assistance to the 18,500 families suffering from the prolonged drought in the region.

The SEN expects the number of families assisted daily to rise to 1600, within 11 days and not 31 days, as would be the case under the former daily pace

The SEN is implementing an operation known as “Caco OIKOTEVE ÑANDEREHE”, which will require Gs.18,320,944,975.

10 additional medical brigades will be added to the plan to provide emergency care and medications.

The amount earmarked for food exceeds Gs. 12,109,000,000, followed by travel and accommodation costs for operations personnel, which exceed Gs.1,031,000,000.

The contingencies item has also swollen the budget: at 10% of the total, it amounts to Gs.1,778,867,725.

Medications worth Gs.600 million will be distributed, along with fuel for food distribution (Gs.545 million), fuel for water distribution (Gs.446 million) and equipment maintenance (Gs.450 million).

100 tanks of fiber cement will be supplied, at a cost of Gs.250 million, in addition to other expenses, which include dissemination costs, social and cultural promotion costs, aviation fuel, and the hiring of operational and administrative personnel.

The Alto Paraguay operation will last 16 days and will be supplied by river, with a boat at the service of the SEN and an aircraft from the Paraguay and Air Force.

The TIGO telephone company has joined the humanitarian campaign for the Occidental-Chaco region, and all revenues collected through the MINI CARGA service between 7:30 and 8:30 AM on September 18, 2008 will be earmarked for victims in the region.

The cyclical drought problem in the Chaco reflects the lack of basic social infrastructure, such as wells and cisterns, which are the simplest and most economical to construct, while building an aqueduct would be much more complicated.

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L. HEALTH MEASURES

Ministry of Public Health and Social Welfare

National Dengue Fever Emergency

In mid-February 2007, the health system found itself unable to contain a dengue fever epidemic. On February 27, 2007 the government decreed a state of emergency in order to free up resources and operational capacity, and moved energetically to halt and then turn back the disease.

The SEN is in charge of the operating phase, which will involve careful inspection of private homes, commercial and industrial premises to identify and destroy breeding grounds for the mosquitoes that transmit the fever.

Activities

This operation will last 60 days.

The Asunción and Central scenario. The diagnosis on which the emergency decree was based found that the greatest concentration of dengue fever cases was in Asunción and the Central Department, and that there was a high degree of infestation with the Aedes aegypti mosquito in those areas. The plan developed a scenario consisting of:

20 cities 374 barrios 29,913 city blocks 552,803 properties.

The size of the target area meant a massive operation without precedent. The SEN immediately took appropriate measures to support the operation:

Transporting fuel. Travel and accommodation for brigade members. 600 armed forces personnel mobilized to visit 19 municipios in the Central Department. 400 brigade members were contracted to perform sweeps in 68 barrios of Asunción.

These teams were trained and equipped for the following: Conduct home inspections. Identify mosquito breeding areas. Destroy or treat them. Give information to local inhabitants.

The Ministry of Public Health and Social Welfare, Health Surveillance Branch, has supplied data on outbreaks of infectious diseases:

Number of Cases Year Diseases24,000 1999/2000 Dengue fever

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M. POVERTY

Social Action Secretariat (SAS)

The Social Action Secretariat (SAS) was created in 1995, by executive decree 9232/95, to tackle poverty and unemployment, with a mandate to act as interagency coordinator for efforts by the State, political parties and civil society, in the context of a social policy to promote social capital as a means of combating poverty and enhancing social equity, creating a fairer economic order and a system of social protection and promotion.

In its work, the SAS follows the guidelines of the national antipoverty strategy approved by presidential decree 8152 of September 8, 2006, which calls for specific policies for addressing people affected by poverty and social vulnerability, social exclusion, and economic exclusion. The SAS is responsible for designing and implementing those policies, in a participatory and decentralized manner.

The SAS is promoting a national strategy to reduce poverty and inequality. It is a member of the government's Social Cabinet, and is devoted to designing and applying targeting and management systems and instruments for the more efficient and effective coordination of government social action.

Activities

Following are some of the social program activities that the SAS has pursued in recent years.

RPPS

The Social Protection and Promotion Network (RPPS) embraces a series of articulated programs for preventing, mitigating and overcoming the adverse social effects of poverty, with emphasis on social groups and regions most at risk. These programs constitute innovative practices for bringing government programs to families living in extreme poverty and for encouraging co-responsibility through conditional money transfers. Those conditions require beneficiary families to make use of child nutrition, maternal-child health, food security and family support services for their children.

TEKOPORA

The TEKOPORA program is intended to mitigate and overcome the adverse social conditions facing people in extreme poverty and to prevent the intergenerational transmission of poverty by delivering social bonuses in exchange for a commitment to co-responsibility, designed to strengthen the human and social capital of beneficiary families (conditional income supplement), by enhancing access for children to education, health, food and nutrition, identification, habitability, community participation, etc. It covers the departments of Caazapá, San Pedro, Caaguazú, Canindeyu and Concepción.

In total there are currently 8,838 beneficiary families, representing approximately 53,542 individuals of which 27,067 are children under the age of 14. In 2007 the program was to be

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expanded to 27,000 families. The immediate target for 2008 is 35,000 families, and the basic objective is to improve the millennium development goals (MDG) indicators.

Most important achievements during 2006: 20% increase in vaccination coverage (average) for children under five years, in the target

districts of program 1. 30% increase in school attendance of children under the program (average). Of the 327 heads

of family without an identity card, 136 (41%) obtained the documents and 191 (58%) have begun the process of updating it through the program.

ABRAZO

The ABRAZO program is aimed at street children in metropolitan Asunción, giving them access to basic services (health, education, family support, recreation and strengthening of subsistence activities). The program is currently serving some 1340 children and their families in the 13 "drop-in centers", three of them in Asunción and one each in San Lorenzo, Fernando de la Mora, Luque, Lambaré, Ñemby, Mariano Roque Alonso, Itauguá, Villa Elisa and Capiatá.

ABRAZO was launched in April 2005 with the opening of 13 centers, three in Asunción and 10 in municipios of the Central Department. At that time the goal was to reach 1200 children under 14 years of age working in the streets, and their families. Today that goal has been exceeded.

The "drop-in centers" are open to children in off-school hours, from Monday to Friday. Instructors are on hand to take them through a daily routine: a glass of milk, help with schoolwork, recreation before the daily bath, and good hygiene habits. Lunch is served at noon, in accordance with the nutrition plan.

Some highlights of the ABRAZO program 1282 children left the streets in November 2006. 58 children have cut back their hours of working in the streets. 1340 children have benefited directly. 1353 children have benefited indirectly.

ÑOPYTYVO

The Social Action Secretariat of the Presidency of the Republic, consistent with the functions and powers assigned by law, decided to contribute to the government's actions to help the people of Puerto La Victoria (formerly Puerto Casado) by creating a pilot program that has become a new component of the RPPS.

The ÑOPYTYVO program is designed to reduce the vulnerability of extremely poor people in Puerto Casado, Alto Paraguay, through co-responsibility bonuses and construction of an intervention model for the Occidental Region. The program is currently serving 513 families, 58 of which were signed up during the present year.

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Highlights of the program: 60% increase in school attendance over 2005. 40% increase in registration of children, especially indigenous children, over 2005. 60% increase in visits to the health post. 90% of children have a vaccination booklet. 60% of pregnant women receive regular checkups. 70% of families have better hygiene habits.

Care program for seniors (PAAM)

The PAAM is a pilot program for at-risk seniors, targeted at veterans of the Chaco War. In December 2006 it was serving 4,313 beneficiaries.

The objective is to facilitate access to public services, particularly medical care, so as to improve the quality of life for beneficiaries, through a transfer of Gs.700,000 a month, subject to co-responsibility conditions such as:

Regular medical checkup (minimum every two months), observance of minimum living standards relating to food, hygiene and housing.

Social workers will make regular visits to beneficiaries' homes to ensure that they and their families are observing these conditions.

Payments will come from the Ministry of Finance and will be administered by the SAS through the RPPS. The total monthly allocation is Gs.700,000 for 4,468 veterans, providing an individual allowance of roughly Gs.3,000 a month. Payments will begin on October 10, through the Banco de Fomento branch in each beneficiary's district.

Housing program (PRAMTN)

The SAS is responsible for designing and implementing, in a participatory and decentralized manner, the social policy for combating poverty and vulnerability and promoting greater social equity, building social capital, a fairer economic order and a system of social protection and promotion.

The PRAMTN is a housing construction program based on the system of joint mutual assistance and sustainable productive projects. It is designed specifically to overcome a housing shortage in the neediest areas of the country and to train beneficiaries to develop small production units for self consumption or sale. It has recently been successfully building houses, with community infrastructure and facilities, using the "joint mutual assistance" approach.

Highlights for 2006 include the completion of 600 houses under a call for tenders (01/2005) in the districts of Central Department, Caaguazu and Asunción, and the launch of construction on 1600 dwellings in settlements proposed by CONOP, CONOP/MST, COP, the "Homeless Neighbors Association" and the San Miguel Coordination Office.

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The program has had a significant multiplier effect, and the construction work has generated approximately 55,000 jobs.

The program is designed to improve living conditions for poor communities in irregular urban and periurban settlements, by regularizing land title and providing basic services. The program is nationwide in its scope, and is funded from the national treasury.

Housing construction

This program is financed by a grant from the Republic of China (Taiwan) to the SAS. In pursuit of the program, the national government will establish clear and fair rules that will give an opportunity to all NGOs interested in implementing the program, provided they meet the legal conditions of reliability and technical capacity.

The cost of the dwellings will include project preparation, a topographic and soils study, management and construction, minimum road infrastructure, urban and community facilities, a productive unit with equipment, depending on the case and in proportion to the number of dwellings to be built, as well as other unforeseen works, and will include also the fees for supervisors. As a counterpart to the Chinese government house construction grant, the beneficiaries will have to perform community labor on the works.

Social investment program (PROPAIS II)

The Social Investment Program (PROPAIS II) finances social development projects proposed and managed by poor communities and social groups living in situations of poverty and vulnerability in urban and rural centers. It will also help strengthen the social management capacity of local governments. Its general objective is to improve living conditions for the poor and to reduce the risks facing vulnerable groups (female heads of household, at-risk children and adolescents, indigenous people, persons with disabilities, and the elderly), by promoting their social and economic inclusion.

The specific objectives of the program are:

To strengthen the capacity of the State to formulate, implement and monitor social policies and programs for people in situations of poverty and vulnerability.

To strengthen the capacity of civil society to identify, systematize and present demands for services to meet its needs.

To improve the efficiency of social investment for people in situations of poverty and vulnerability.

PRODECO

The Community Development Pilot Project (PRODECO) is a project of the Social Action Secretariat for vulnerable groups in the departments of Itapúa, Misiones and Ñeembucú. It is intended to promote, articulate and strengthen small organizations in the poorest communities of these departments and to help them develop community-based productive projects. The project takes a decentralized, participatory and grassroots approach to socioeconomic development as a way of

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improving living standards and social inclusion in poorer rural and urban communities of these departments. It also seeks to create and strengthen the capacities of local communities.

The specific objectives of the project are to subsidize and support approximately 500 productive projects for income generation and community development. It discriminates positively in favor of vulnerable groups: youth, women and indigenous people. It will run for four years, and will benefit approximately 3,700 families. The World Bank is providing financial support.

Achievements of PRODECO

In 2006, 194 development subprojects were implemented with vulnerable groups, 96 in Itapúa, 45 in Misiones and 53 in Ñeembucú.

The direct beneficiaries of the program in 2006 numbered 1,862, and indirect beneficiaries 10,984

FEPREL

The Fund for Economic Production and Labor Retraining, FEPREL, is targeted at families in five districts, and addresses the social problems of the 76 families affected by the Yacyretá dam and other families that are socially at risk in the area of influence of the reservoir, through two mechanisms:

financial support for income-generating productive units, and a community development project that will benefit 173 heads of household.

direct conditional transfer system, benefiting 1,881 heads of household.

N. ENVIRONMENTAL DEGRADATION

"It's everyone's problem"

"A healthy environment is good business today for countries and firms". Firms must internalize the environmental costs they use to pass off onto the public, and they must understand that a healthy environment is good business for everyone today. This was the message that Aída Kemelmajer de Carlucci, a member of the Supreme Court of Mendoza, Argentina, in an address she gave in our country on corporate social responsibility, environmental damage and business, in the series of international talks on business law organized by the Center for Legal, Economic and Political Studies (CEDEP). The Paraguayan constitution gives the Attorney General's office specific functions in pursuit of these policies, but at the same time the prosecutor must be independent, strong and not vulnerable (ABC newspaper Sunday, October 19, 2008).

Law 1561 of July 21, 2000 created the National Environment System, the National Environment Council, and the National Environment Secretariat.

That law creates and regulates the functioning of the agencies for the preparation, standardization, coordination, execution and supervision of the national environmental policy and its management.

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The National Environment System (SISNAM), comprising the environmental organs and entities of the national, departmental and municipal governments and private entities created for this purpose, in order to take joint and coordinated action to find responses and solutions to environmental problems, and to avoid international disputes, to prevent gaps or overlaps of responsibility, and to respond efficiently and effectively to environmental objectives.

The National Environment Council (CONAM) is a collegial interagency advisory and policy-setting body for the environment.

"Warnings about accelerated climate change"

Climate change is coming at us faster and harder than expected. In Spain, instances of drought and heat waves will triple before the end of the century, according to a summary of the latest research published by WWF, an international ecological organization. That organization is calling on the European Union to "assume its responsibilities" and move the target for reducing greenhouse gas emissions by 2020 from 20 to 30%. It published a report with the opinions of 4,000 scientists from 150 countries that warned of "new climate era" in which, for example, the global temperature could increase by up to 6° by 2099 (ABC color, Monday, October 20, 2008).

Secretariat of the Environment (SEAM)

The Environment Secretariat is responsible for policy formulation and for the coordination, supervision and execution of environmental actions and plans, programs and projects contained in the National Development Plan relating to the preservation and conservation, restoration and management of natural resources.

It is also responsible for ecological and general environmental regulation, with a view to improving living conditions among the different sectors of Paraguayan society and creating conditions for economic growth, social equity and long-term ecological sustainability.

Law 3001 on environmental services (October 10, 2006), on valuation and compensation for environmental services.

Law 3003 on the "debt for nature swap" with the United States (October 10, 2006), approving agreements between the governments of Paraguay and the United States under the Tropical Forest Conservation Act to establish a tropical forest conservation fund and a conservation council in return for reducing certain debts to the US government and its agencies (June 7, 2006), and increasing the overall national budget for fiscal year 2006.

Law 1561, the "Environmental Master Act" creating the Secretariat of the Environment, the National Environment Council and the National Environment System.

Law 1100 on the prevention of noise pollution

Law 112, the Mbaracayú Forest Reserve Agreement

Law 123 on phytosanitary measures and control

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Law 1324 on the conservation of migratory species

Law 251 on the International Convention on Climate Change ratified by Paraguay

Law 294 and regulatory decree 14,281 on environmental impact assessment

Law 350, on the International Convention on the Conservation of Wetlands

Law 352 on protected forest areas of Paraguay, and covering all legal aspects involved in the administration of conservation units.

Law 369 (February 23, 2006) on the National Environmental Health Service (SENASA)

Law 42 (February 23, 2006), prohibiting the import of hazardous wastes

Law 422 (February 23, 2006), the Forestry Act

Law 515 (February 23, 2006), prohibiting the export and trafficking of logs, lumber and wooden beams

Law 536 (February 23, 2006) on reforestation

Law 538 (February 23, 2006), the CITES Act, on international trade in endangered species

Law 716 (February 23, 2006) on the punishment of environmental crimes

Law 752 (February 23, 2006) on unlawful woodcutting

Law 799 (February 23, 2006) establishing the legal framework for regulating and administering fishing activity in Paraguay

Law 816 (February 23, 2006) on measures for the defense of natural resources

Law 836 (February 23, 2006), the Sanitary Code

Law 96 (February 23, 2006), legal framework for wildlife species

Law 970 (February 23, 2006) on the convention to combat desertification and drought

Law 2524 (February 21, 2006) on deforestation in the Oriental Region of Paraguay

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Ministry of National Defense (MDN)

The MDN has an environment department responsible for:

coordinating the strategic defense of the environment and its resources with the agencies responsible for protecting and ensuring access to natural resources and their sustainable use;

promoting and assisting the understanding and defense of the country's natural resources, together with specialized institutions and organizations, with the assistance of the Armed Forces.

The Head of the Environment Department represents the Ministry of National Defense on the CONAM.

Military Council for the Environment (COMIAM)

The Military Council for the Environment is an advisory body within the MDN responsible for examining and coordinating actions of the Armed Forces in defense of the environment, consistent with the National Environment Policy (PAN). According to the bylaws of CONAM (article 116), "CONAM may create councils in the different territorial entities with purposes similar to those fulfilled at the national level, and respecting in their makeup the rules established in law 1561/00, so as to allow participation by the different sectors of society (Article 15, Decree 10 579/00)."

O. SAFETY IN LAND, RIVER AND AIR TRANSPORT

Institution responsible for transportation safety:Ministry of Public Works and Communications (MOPC)

Links: Highway Police Dinatran Merchant Marine National Administration of Navigation and Ports

Ministry of the Interior National Police

The Highway Police, created under the Ministry of Public Works and Communications to enforce the provisions of Decree Law 22,094 of September 17, 1947, establishing general regulations for road transport, and supplementary provisions governing use of the country's major roads network

Education and Road Safety Project

The head of the Education and Road Safety Department, alarmed by the rising number of vehicle accidents on the country's roads, which are very harmful to families and to the State itself, finds it necessary to present an awareness-raising plan aimed at all users of the country's road

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network, in the various departments and cities across the country, in order to change drivers' attitudes and in this way help reduce the high rate of deaths and injuries from traffic accidents.

Thanks to computerized administrative and operational procedures, the highway police now have a registry of drivers showing previous violations, with a database containing full information on road incidents, relating to radar controls, toll evasion, alcohol test results, excess load weight, court sentences, and various operations. This computerized system provides a vast range of information classified by the driver’s license of the violator or the license plate of the vehicle. All highway accidents are also recorded: the data are entered on an annual accident records spreadsheet that is then fed into the central system.

National Transportation Directorate (DINATRAN)

The National Transportation Directorate is a decentralized government body, created on September 16, 2000 by Law 1590/00 to regulate national and international passenger and freight transportation services and to enforce agreements and conventions in this regard. It reports to government through the Ministry of Public Works and Communications. Its senior authority is the Council, comprising representatives of the following institutions: Ministry of Justice and Labor, AMUAM, Council of Governors, OPACL, transport businesses and workers. The president is the National Director of Transport, appointed by the executive branch.

Mission: the fundamental mission of DINATRAN is to regulate national and international transport

Functions and powers: To establish the technical characteristics and conditions that must be satisfied by vehicles in

order to be licensed. To establish methods of organization, service delivery and operation of the system,

itineraries, frequencies and charges for national and international public passenger transport services.

To decide means for ensuring the continuity of public passenger transport services

Transport of hazardous cargoes

These are cargoes that by their nature require special handling and precautions.

Emergency response

Emergencies with hazardous materials can range from small spills to disasters.

Do not try to assist at an accident for which you have not been trained. Very strict emergency response levels have been established to ensure the safe handling of hazardous chemicals in the case of an accident.

The best response is to understand what your role is in an emergency and stick to that. If you are responsible for cleaning up small spills, be sure to follow appropriate procedures and to treat any cleaning materials you have used as contaminated waste.

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Source: data from the webpages of MOPC, the Highways Police and DINATRAN

River transport

Merchant Marine Directorate

The Merchant Marine Directorate, created by Law 429 of July 15, 1957, is the government body responsible for directing and coordinating activities relating to river and marine transport of freight and passengers, and in general all matters relating to the national merchant marine and related industries, with a view to their growth and development.

The Merchant Marine Directorate is also the enforcement body for the regulations governing the authorization and functioning of private ports. In this area of its functions, authorization to build and operate private ports is granted by the Ministry of Public Works and Communications to commercial companies registered in Paraguay, with the technical and legal opinion of the Merchant Marine Directorate

National Administration of Navigation and Ports (ANNP)

This institution comes under the Ministry of Public Works and Communications, and is responsible for offering dockside, warehousing and general services to freight and passenger transport companies. It is also responsible for dredging, marking and signage of navigable river channels.

Paraguayan Navy, Naval General Prefecture

The Naval General Prefecture is an institution responsible for the policing of navigable rivers, lakes, inlets and canals, pursuant to law 928/27.

Air transport

National Civil Aeronautics Directorate, DINAC

The Nationals Civil Aeronautics Directorate is responsible for controlling commercial air traffic within the national airspace as well as administration of the country's airports and the national meteorological service (source: data from the webpage of DINAC)

OTHER THREATS AND CONCERNS THAT THIS DEPARTMENT BELIEVES SHOULD BE INCLUDED IN THIS DOCUMENT ARE:

WATER FOOD ENERGY

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Water

The government agency responsible for water resources is ERSSAN (Regulatory Entity for Water and Sanitation Services).

Significant amounts of mercury, which can affect water and wildlife, were found in long reaches of the Paraguay River, according to evaluations and studies conducted and obtained by the National Institute of Technology and Standardization (INTN) from water and fish samples. The Environmental Impact Assessment Directorate of the Environment Secretariat (SEAM) reported that this silvery element is a heavy metal, persistent, bioaccumulative, that does not degrade in the environment and that accumulates in living organisms. Mercury is a metallic element that has been catalogued as a hazardous material because of the serious damage it causes to health and the environment. Mercury has neurotoxic effects, which means it attacks human health, primarily the nervous system and also vital organs such as kidneys. Contamination with this metal in our country comes from two sources. One is the Pantanal, where our principal watercourse rises, and where the famous gold seekers abound, using mercury to make an amalgam for extracting gold. Within the country, contamination originates in the area of Colonia Independencia (specifically in Paso Yobái), in Guairá department, where gold extraction operations also use this element

Paraguay has signed an environmental agreement with Venezuela that is directly applicable and refers specifically to the exploitation of water resources. It was signed by Presidents Fernando Lugo and Hugo Chavez at San Pedro del Ycuamandyju on August 16, 2008.

Food

Biotechnology may be the answer for overcoming the world food crisis. By 2050 we will have to produce more food than was produced in the last 10,000 years if we are to meet this challenge.

The objective of biotechnology for the next 20 years is to double output of soy, corn and cotton from the same planted area and to reduce water and agrochemical consumption by one third.

The US biotechnology research company Monsanto has announced that it will launch a new soy seed in the next few years in Paraguay and Brazil to combat the world food crisis. The announcement was made at the world's biggest biotechnology fair, the Farm Progress Show in Des Moines, Iowa.

The advance of biotechnology in the United States has direct repercussions for our country: Paraguay and Brazil are intensifying the growing of genetically modified soy and corn.

This seed, which combines Bt and RR in the same plant, will reach our country and Brazil between 2011 and 2013, and will be grown here before it is grown in the United States.

By 2050 we will have to produce more food than we produced in the last hundred years in order to avoid global chaos sparked by hunger.

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The famous British economist Robert Malthus once forecast that the more people in the world, the less the possibility of food, because population grows geometrically while food production rises only arithmetically.

The Brazilian Ministry of Agricultural Development has instituted the plan announced last July by President Lula da Silva and has approved the release of 78 billion reales (around $50 billion) during the 2008/2009 crop season to take advantage of the growing world agriculture market. Brazil is looking to become the world's biggest food supplier.

Targets for the [Brazilian] plan

Increase public food stocks from 1.5 to 6 million tons in 2009. Cut interest rates in half for loans from PRONAF (National Program to Strengthen Family

Farming), to 0.5%. Discounts of up to 17.5% negotiated with industry so that farm families can purchase 60,000

tractors and 300,000 farming machines and implements by 2010. Benefit another 1 million farm families with a new line of credit from the "more food"

program by 2010. Increase the number of extension workers by 50%. Establish a new line of credit for the restoration of degraded areas.

Energy

Paraguay has three sources of energy: Entidad Binacional ITAIPU jointly with Brazil Entidad Binacional YACYRETA jointly with Argentina, and ACARAY (National)

Paraguay does not anticipate a short-term energy problem

Source: data obtained from the newspaper ABC, Sunday, September 28, 2008

BENITO ELADIO SILVERA MORINIGOCap N DEMHead of the Department of International Affairs and Expert in CSBMs of the OAS CHS, RM Nº 835/07

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TOPICS – ANNEXES

1. CORRUPTION (cont. page 20)

Corruption must not be defined solely as something that happens only in government -- we must admit that it permeates other basic areas of society, namely the family, communication, and marital, filial and fraternal relations. As an anonymous writer once put it, the world needs men:

Who cannot be bought and whose word is their bond. Who place character above wealth. Who have opinions and a will. Who are greater than their calling. Who will not hesitate in seizing opportunities. Who will not lose their individuality in the midst of a crowd. Who are honest in little things as in big things. Who will not compromise with evil, and whose ambitions are not confined to egotistical

wishes. Who will not say they do it "because everyone else is doing it". Who are loyal to their friends when they hear good or ill reports of them, both in

adversity and in prosperity. Who do not believe that craftiness, surreptitiousness and stubbornness are the best

qualities for success in crime. Who are not ashamed or afraid to defend the truth even if it is unpopular. Who can say no firmly, even when everyone else says yes. This is what we need in Paraguay. Like Lucero, who remained faithful to the path of the

reform, in our country to we need men and women of such greatness. This is what the reform teaches us (source: Fuente: Sociedad / Panorama Cristiano – October 2008).

WATER (cont. page 38)

The Second Paraguayan Congress on Water Resources which wrapped up on November 1, 2008 in the Centro Paraguayo-Japonés sought to implement a national water plan. It declared that implementing that plan should be a government priority, because water is so important for industrial and agricultural production. This plan should improve the administration of water, especially in urban areas of departments that are now overpopulated because of migration, among other factors. "We need modern and decentralized management for our water at the national level. This means involving the municipios and provinces, creating an educational process." (Source: ABC newspaper November 1, 2008).

Some 15 projects related to water issues were presented during the Congress. According to a statement by members of the Paraguayan Water Resources Association hosting the event, all the projects submitted highlighted the need for a water plan for that part of the country, in order to improve living conditions for its people and to promote industrial and livestock development.

In this context, the work of the Mennonite colonies was cited as an example of how to retain rainwater and keep on producing. However, achieving this would depend on decentralizing government administration of water resources. An emergency in the Chaco cannot be handled from

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Asunción, as Monte Domeq pointed out. He also warned that declarations of emergency in that zone could have been avoided if the government had a water plan (source: ABC Newspaper November 2, 2008).

POVERTY (Cont. page 27)

Exports are the basis for reducing poverty in Paraguay. To reduce extreme poverty from 19% to 10%, as the current government wants to do, the country will have to move from exporting $4 billion a year to exporting $20 billion a year, said the head of Paraguay Vende, Reinaldo Pender. He added that the Chilean proposal for a strategic alliance could be highly positive.

Duties

Nevertheless, the executive of Paraguay Vende (a USAID initiative) warned that to achieve better results we will have to improve coordination for promoting and developing exports. "What two entities do in Chile, 10 are doing in Paraguay, so we need to centralize our industrial and macroeconomic policies. We also have to create two public-private and independent entities that will exercise direction over domestic economic development programs and external expansion programs." (Source: ABC newspaper November 7, 2008.)

Updated: November 10, 2008

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