US embassy cable - 05ASUNCION875

C O N F I D E N T I A L SECTION 01 OF 04 ASUNCION 000875 
 
SIPDIS 
 
STATE FOR WHA/BSC AND EB/IFD/OIA 
STATE PASS TO USAID FOR LAC/AA 
STATE PASS TO USTR FOR SCRONIN AND LYANG 
NSC FOR SUE CRONIN 
TREASURY FOR OSIA MAUREEN WAFER 
TREASURY FOR OTA WARFIELD, VAN KOCH, MILLAR 
COMMERCE FOR ITA SARAH COOK 
SOUTHCOM FOR POLAD DAN JOHNSON 
USUN FOR NICK ROSTOW 
 
E.O. 12958: DECL: 06/27/2015 
TAGS: PGOV, PREL, PTER, KCRM, EAIR, ECON, CVIS, VE, CU, PA, UN 
SUBJECT: PARAGUAY: VP CASTIGLIONI DISCUSSES SECURITY 
COOPERATION, MONEY LAUNDERING AND COUNTER TERROR 
LEGISLATION, VISAS, OPEN SKIES, AIRPORT SOLICITATION, CUBAN 
DOCTORS, VENEZUELA 
 
Classified By: Polcouns James P. Merz for reasons 1.4 (b) and (d). 
 
1.  Action request:  State/USUN see paras. 2 and 7. 
 
2.  (C)  Summary and Action Request.  On 6/30, Ambassador met 
with Vice President Castiglioni to discuss his recent trip to 
the U.S.  The Ambassador stressed the need for progress on 
money laundering and counter terrorism legislation.  Post 
requests Department and USUN consider how we can bring more 
international (not U.S.) pressure to bear upon Paraguay to 
this end.  (See para. 7)  Castiglioni was optimistic about 
prospects for lifting the current visa requirement for 
Amcits.  He was pleased with the benefits derived from recent 
adoption of the Open Skies agreement and touted an upcoming 
solicitation on improving Asuncion's airport.  He confirmed 
reports that many Cuban doctors seek refugee status in 
Paraguay and shared concern about Venezuela's meddling in the 
region.  End Summary and Action Request. 
 
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U.S. Trip Outstanding 
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3.  (C)  Castiglioni expressed appreciation for the quality 
of meetings he had with high-level officials including 
Vice-President Cheney, the SECDEF, CIADIR, DEPDIR FBI, A/S 
WHA, CHDS Director, and other senior officials from Defense, 
State, and Homeland Security.  He recognized that the 
Washington schedule was exceptional.  He considered it 
emblematic of strong U.S.-Paraguayan cooperation on security 
issues.  He was enthusiastic about the benefits to be derived 
from the creation of ICE's trade monitoring module, conduct 
of CHDS's high-level seminar on developing a national 
security plan, and anti-kidnapping training.  He was hopeful 
about prospects to receive a visit from SECDEF. 
 
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Money Laundering and Counter Terrorism Legislation 
--------------------------------------------- ----- 
 
4.  (C)  The Ambassador stressed the need for progress soon 
on money laundering (ML) and counter terrorism (CT) 
legislation.  UNSCR 1373 imposed upon the international 
community the obligation to adopt laws that address the 
threat posed by terrorist financing.  Paraguay's legal 
framework was deficient.  Paraguay had come up for criticism 
in the UN's Counter Terrorism Committee (CTC) last year in 
view of its failure to adopt counter terrorism legislation. 
A year later, it had still not introduced draft anti-terror 
legislation to Congress, much less adopted and implemented 
it. (Note: Post favors approval of a ML before submission of 
the more controversial CT law, and is pushing hard on all 
fronts. End note)  President Duarte will assume the mantel of 
UNGA Vice-President in September.  It behooved Paraguay to 
move aggressively to achieve, at the very least, adoption of 
the money laundering law by one of the houses of Congress and 
the introduction of the counter terror law to Congress before 
September. 
 
5.  (C) Comment.  Our counsel to the VP -- a bit overplayed 
for effect -- about prospects of public criticism of 
Paraguay's record upon review by the CTC in September -- 
produced the desired effect.  The Vice-President tasked 
Carlos Machuca, the VP's advisor on security issues who had 
accompanied him to the meeting, to obtain a full brief on the 
legislation.  He thought prospects for progress would improve 
in the next Congressional session starting in July as 
Senators from his party, the Colorados, would assume 
leadership of key committees reviewing this legislation.  He 
promised to engage personally in pressing political allies to 
move on the money laundering legislation first.  End Comment. 
 
6.  (C)  Last December, Paraguay received a team of experts 
including reps from CTC (Amb. Loizaga), UNODC, CICTE and 
UNCHR.  They gave Paraguay's CT law a vote of confidence but 
registered little impact on the political scene as 
Congressmen at the time were focused on budget negotiations. 
 
 
7.  (C)  Last month, post participated in a conference call 
with reps from UNODC, CICTE,  IMF and State (WHA/BSC and SCT) 
and came to agreement it was time for the IO community to 
bring more pressure to bear on Paraguay to meet its 
international obligations.  The IO participants agreed that 
it would be useful to consider making another trip to 
Paraguay sometime between late July and September under the 
guise of lending assistance but with the intent to issue 
statements in public and private reminding Paraguay of its 
obligations.  They stressed the importance of bringing the 
CTC into this discussion.  We agreed to revisit the issue in 
July once Paraguay elected new leaders to key Congressional 
committees reviewing the money laundering legislation.  With 
those elections behind us, we intend to reconvene key players 
for another discussion of timing for a possible visit. 
 
8.  (C)  Action request: Post requests the Department and 
USUN consider ways to bring more international (non-U.S.) 
pressure to bear upon Paraguay.  Many opponents of CT 
legislation are much more open to U.N. arguments than U.S. 
pressure.  Post requests consideration be given to the 
possibility of prompting the CTC Chairman to write a letter 
or at least meet (with Paraguay's PermRep) or make a call to 
Paraguayan officials (a call to the VP Castiglioni or the FM 
would be ideal if protocol allows) flagging concerns, perhaps 
in the context of Paraguay's President serving as VP for the 
upcoming UNGA.  Raising with officials in Asuncion as opposed 
to NY, is more likely to produce results.  We welcome other 
options as appropriate. 
 
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Dropping the Visa Requirement for Amcits 
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9.  (C)  The Ambassador asked the VP for an update on 
Paraguay's plans to drop the visa requirement for Amcits.  FM 
Rachid had introduced the current requirement when she was 
Paraguay's Ambassador to the U.S.  We understood immediate 
prospects for lifting this policy had dimmed with the 
decision that she stay on as Foreign Minister for the 
immediate future.  Castiglioni maintained that the FM was not 
blocking movement on this issue, attributing delays to more 
mundane, bureaucratic issues.  He promised to look into what 
needed to be done to finalize plans to implement a new policy 
that would drop the requirement that Amcits obtain a visa in 
favor of fee that would be administered upon arrival at the 
airport. 
 
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Open Skies 
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10.  (U)  Paraguay signed an Open Skies agreement with the 
U.S. less than two months ago.  According to the VP, Paraguay 
had already started to derive the benefits of the agreement 
in the form of lower fares to popular destinations in 
surrounding countries and Spain.  The Ambassador encouraged 
the VP to publicize this information.  The government takes 
much grief from the uninformed public that such agreements 
only benefit rich multinational firms.  However, lower fares 
benefit everyone, in particular less affluent individuals who 
otherwise would not be able to travel by air for a business 
meeting or with their family for a vacation. 
 
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Airport Solicitation 
-------------------- 
 
11.  (U)  The VP confirmed reports that the GOP was moving 
ahead in preparing a solicitation for significant 
infrastructure improvements, including installation of radar 
and modern communication equipment, at Asuncion's 
international airport.  The government is committed to a 
transparent process open to international bids. 
 
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Cuban Doctors 
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12.  (C)  Several months ago, the GOP announced it was 
terminating the Cuban doctors program at the end of the year. 
 The VP also confirmed recent press reports that a fair 
number -- he said sixty -- of the doctors have requested to 
stay in Paraguay as refugees. (Note: We believe the VP may be 
mistaken on the numbers.  An MFA source told DCM he thought 
there were 6 cases of Cuban doctors seeking to stay.  We are 
researching further).  Many have married Paraguayans, had 
children, and opened their own practices in Paraguay.  In 
Paraguay's interior -- not known for its prosperous or modern 
conditions -- they are living better than they were in Cuba. 
The VP said the Cuban doctor in his home town in San Pedro is 
an example; she has a clinic, a truck, and is "never going 
back" he said.  Comment.  One of Paraguay's leading 
newspapers recently produced a series of articles praising 
the alleged achievements of the Cuban revolution.  The fact 
that many of Cuba's doctors do not want to return to Cuba and 
seek refugee status here is clearly embarrassing to Cuba and 
may explain why Cuba has not registered any public objection 
to the GOP's plans to drop its doctors program.  Post seeks 
to obtain more information on this issue particularly with a 
view to bringing it more to the attention of the Paraguayan 
public to debunk myths about the Cuban paradise.  End 
Comment.  The VP reiterated that he would also like to end 
the sending of Paraguayans to Cuban medical schools.  He was 
pushing this idea, with the excuse that the GOP could not 
afford to transport them, but Cuba then offered to fly them 
free. (Note: It is unclear that VP could have delivered on 
this, even without the Cuban offer; hundreds of poor 
Paraguayans see the scholarship program as a chance for a 
better future and this carries political weight. End note) 
 
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Venezuela's Activities 
---------------------- 
 
13.  (C)  Air Force LtG Soley (please protect) recently 
informed the Ambassador that Venezuela had offered to pay for 
costs (fuel, housing, etc.) for a visit by classes from 
Paraguay's Strategic Studies Institute to Venezuela.  The 
Ambassador warned Soley that he would be given a dog and pony 
show designed to sing the virtues of the "Bolivarian 
Revolution."  It would be a bad idea for Paraguay to accept 
but if it did participants should seek a meeting with the 
democratic opposition and independent media.  Without 
identifying his source, the Ambassador asked the VP for his 
views on this issue, expressing U.S. misgivings.  The VP was 
unaware of the offer, signaled he shared our misgivings, and 
assured us he would look into the matter. 
14.  (C)  Comment: Post wants to commend and congratulate 
Washington partners for the outstanding schedule it put 
together for the VP's visit.  Paraguay seeks to strengthen 
cooperation with the U.S., particularly in view of rising 
security concerns.  The VP is a key player on the political 
scene in Paraguay.  He enjoys a solid relationship with 
President Duarte.  Given his youth, ambition, and political 
acumen, he will surely be a key player on Paraguay's 
political scene for the indefinite future.  Post has already 
cultivated a strong relationship with the VP as someone we 
can go to on key issues.  The meetings that he had in 
Washington solidified that relationship immeasurably.  We 
expect to see the return on this investment not only in terms 
of a stronger personal relationship with the VP, but more 
importantly, in the form of deeper cooperation with the U.S. 
on key issues including the fight against terror and 
international crime and promoting economic trade and 
development.  End Comment. 
KEANE