Tag: Paraguay

  • Envoy Shown the Door Over Tabesa Sanctions

    Envoy Shown the Door Over Tabesa Sanctions

    Image: Video_StockOrg/MelissaMN

    Paraguay has asked the U.S. to withdraw its ambassador following the Biden administration’s announcement of sanctions on Tabacalera del Este (Tabesa), a tobacco firm linked to the South American nation’s former president who has been flagged by the White House for corruption, reports the AP.

    In a Aug. 8 statement, the Paraguayan Foreign Ministry asked the U.S. government to “accelerate the departure process” of Ambassador Marc Ostfield.

    Earlier this week, the U.S. Treasury Department announced sanctions on Tabesa for supposedly illegally enriching Horacio Manuel Cartes Jara, who served as Paraguay’s president from 2013 to 2018 and still wields significant political power in the country.

    According to the Treasury Department, Cartes Jara owned a 50 percent or greater interest in Tabesa and received millions of dollars from the company following a sales agreement.

    In a recent news conference, Ambassador Ostfield said the Biden administration was prepared to “use the range of relevant tools to combat corruption, including visa restrictions, designations, financial sanctions and extradition.”

    Tabesa and Cartes Jara have rejected the accusations.

  • Tabesa Sanctioned

    Tabesa Sanctioned

    Tabesa operates a factory near Ciudad del Este.
    (Photo: Taco Tuinstra)

    The United States is imposing sanctions on Tabacalera del Este (Tabesa) of Paraguay for allegedly enriching the country’s former president, Horacio Manuel Cartes Jara, a cigarette tycoon sanctioned by the White House for corruption.

    One of Paraguay’s richest men, Cartes Jara served as president from 2013 to 2018 and still wields significant political power in the country, according to the Associated Press.

    In 2023, the U.S. Treasury Department sanctioned Cartes Jara over accusations that he had paid millions of dollars in bribes to lawmakers to pave his way to power and that he had cultivated ties to Lebanon’s Hezbollah militant group, which is believed to operate in the tri-border area where Argentina, Brazil and Paraguay meet.

    On March 31, 2023, the Treasury Department’s Office of Foreign Assets Control (OFAC) identified Tabesa as an entity in which Cartes Jara owned a 50 percent or greater interest. Pursuant to a sales agreement between Tabesa and Cartes Jara, Tabesa has made payments worth millions of dollars to Cartes Jara, according to the OFAC.

    “Today’s actions reinforce the United States’ sanctions on former President Cartes and demonstrate the U.S.’ commitment to ensuring the integrity of our sanctions programs and inhibiting Cartes’ ability to receive financial benefits,” said State Department spokesperson Matthew Miller in a press note.

    “The United States remains dedicated to ensuring accountability for Cartes and to promoting meaningful anti-corruption reform in Paraguay.”

    The OFAC’s designation of Tabesa was taken in the context of the Global Magnitsky Human Rights Accountability Act. 

    Cartes Jara says he no longer owns nor is actively involved in the management of Tabacalera del Este, a company that has drawn scrutiny because of its massive volumes of cigarette sales in a relatively small market.

  • Brazil Busts Fake Cigarette Network

    Brazil Busts Fake Cigarette Network

    Photo: Policia Federal

    Brazil’s Federal Police cracked down on a criminal network trafficking fake Paraguayan cigarette brands in Minas Gerais state, according to the Organized Crime and Corruption Reporting Project (OCCRP). Law enforcement agents reportedly issued multiple arrest warrants and froze more than $4 million in assets.

    The suspects face charges of smuggling, counterfeiting, human trafficking, slave labor, forgery, misuse of machinery, crime against consumer relations, crime against trademark registrations and money laundering.

    Led by a businessman from Sao Paulo, the organization forced Paraguayan nationals to make the cigarettes in hidden factories. The group reportedly picked up workers in Paraguay, blindfolded them, and drove them east across the border into Brazil, where they were  held under surveillance inside the factories for several months. Their telephones were confiscated and they had no contact with the outside world.

    The workers produced counterfeit versions of Paraguayan brands, such as the Tabesa’s TE, Eight and Palermo. Once finished, the cigarettes were transported in trucks, hidden behind shoes.

    Paraguay is a major contraband hub in South America. More than 97 percent of cigarettes produced in Paraguay end up in countries such as Brazil. The business is also entangled with money laundering, political corruption and criminal gang activities.

    In March of this year, the OCCRP reported on the rescue of 19 Paraguayans trapped in an illegal cigarette factory in Rio de Janeiro. Brazil rescued 918 people working as slaves in the first three months of this year.

  • Ex-President Scrutinized Over Cigarette Shipment

    Ex-President Scrutinized Over Cigarette Shipment

    Photo: Taco Tuinstra

    The U.S. government has blacklisted former Paraguayan President Horacio Cartes for his role in “significant corruption,” a move that prevents Cartes from entering the United States, reports The Wall Street Journal.

    The decision follows revelations that an aircraft formerly owned by an Iranian carrier that is blacklisted by the U.S. Treasury for alleged arms trafficking transported cigarettes from a company owned by the former president.

    Earlier this year, Paraguay’s then interior minister, Arnaldo Giuzzio, accused Cartes of laundering money and illicit enrichment tied to the alleged sale of contraband cigarettes from the former president’s tobacco company, Tabacalera del Este, known as Tabesa. The assertions didn’t lead to charges.

    Last month, Paraguay’s top anti-corruption official, Rene Fernandez, called for a probe into allegations that Tabesa was linked to a group of Venezuelan and Iranian men who traveled through Paraguay in May. Paraguayan prosecutors are now investigating the men for alleged links to terrorism, though they have not been charged, government documents show.

    The plane and its crew were grounded in Argentina last month, with authorities there saying they are investigating alleged terrorism ties.

    Flight logs show that the jet reported carrying $754,000 worth of cigarettes sourced from Tabesa when it flew out from Paraguay to Aruba on May 16, according to the anti-corruption office. Listed as the recipient of the cargo was Tabacos USA, a Pennsylvania-registered company also owned by Cartes.

    Paraguay, which borders Brazil and Argentina, has long been at the center of the illegal trade of contraband goods and drugs, according to security experts in the U.S. and Latin America.

  • Public Smoking Banned Across South America

    Public Smoking Banned Across South America

    A cigarette vendor in Ciudad del Este, Paraguay
    (Photo: Taco Tuinstra)

    Following the recent enactment of smoke-free laws in Paraguay, every South American country bans public smoking.

    Under Decree No. 4624, approved by Paraguay’s presidency on Dec. 29, consuming lit, heated, or electronic tobacco products is permitted only in uncrowded open air public spaces that are not transit areas for nonsmokers.

    “This is a great achievement for the people of Paraguay,” said Carissa F. Etienne, director of the Pan American Health Organization, in a statement. “The country has taken an enormous step toward protecting its citizens from the devastating health, social, environmental and economic consequences of smoking and exposure to tobacco smoke.”

    Following Paraguay’s recent ban on public smoking, all South American countries have comprehensive smoke-free laws.

    “This is a great moment not only for the health of Paraguayans, but for the entire region of South America,” said Adriana Blanco, head of World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC) Secretariat. “Paraguay’s decree creates a subregion of the Americas that is totally free of tobacco smoke.”

    According to the Campaign for Tobacco-Free Kids, some 430 million people are now protected by laws requiring smoke-free public places and workplaces. These laws also ban designated smoking areas.

    This progress is the result of years of commitment and action from political leaders and civil society groups in South America working to fulfill their obligations under the FCTC.

    When the FCTC came into force more than 15 years ago, only one country in South America, Uruguay, provided its citizens with broad protection against secondhand smoke.

  • Tobacco magnate Cartes wins Paraguay presidential poll

    Horacio Cartes, a Paraguayan tobacco magnate, faced various challenges during his presidential bid, which he won decidedly last week. He was pressed to explain why antinarcotics police officers apprehended a plane carrying cocaine and marijuana on his ranch in 2000; why he went to prison in 1989 on currency fraud charges; and why he had never even voted in past general elections.

    Still, voters across the country seemed ready to give Cartes the benefit of the doubt, handing him a solid victory in Paraguay’s presidential election on Sunday. He took 46 percent of the vote against 37 percent for his main opponent, Efraín Alegre of the ruling Liberal Party, with about 80 percent of the voting stations reporting. Electoral authorities declared Cartes the winner, according to an article in The New York Times.

    Cartes’s victory returns the presidency to the conservative Colorado Party — which held a tight grip on power for six decades, until 2008 — and opens a new phase of international scrutiny of Paraguay, the landlocked nation with a long reputation as a haven for smugglers.