February 26, 2021 | Policy Brief

Shifting Cocaine Routes Turn U.S. Ally Paraguay Into Main Transit Country

February 26, 2021 | Policy Brief

Shifting Cocaine Routes Turn U.S. Ally Paraguay Into Main Transit Country

German law enforcement earlier this week announced a record seizure of cocaine that had been smuggled in from Paraguay. The interdiction adds to a growing body of evidence indicating that Paraguay is fast becoming a key transit country for cocaine shipments to Europe.

On February 23, German authorities announced they had found 16 tons of cocaine with an estimated street value of €1.5 billion to €3.5 billion, hidden inside 1,700 acrylic paint tin cans onboard five containers from Paraguay. Dutch customs officials had spotted irregularities with the cargo content and tipped off their German counterparts, who inspected the ship earlier this month.

This is the largest-ever cocaine shipment seized in Europe to date and the largest ever from Paraguay. Its investigation also led to an interdiction on February 21 at the Belgian Port of Antwerp. Officials there confiscated seven more tons of cocaine, worth an estimated €600 million, this time hidden in wood shipped from Panama. Dutch authorities arrested an individual who had allegedly coordinated both shipments. It is not yet clear whether the two shipments are otherwise connected.

Paraguay has no domestic coca cultivation, but in recent years it has increasingly become an important transit country for cocaine. Last October, for example, Paraguayan officials seized more than three tons of cocaine hidden in charcoal bags bound for Europe. Spanish authorities seized two more tons of cocaine in January, also hidden in a charcoal shipment from Paraguay. And earlier this week, Paraguayan anti-narcotics confiscated 50 canisters of chemical precursors needed to refine cocaine. This suggests that cartels are setting up local processing labs to bolster Paraguay’s role as a new narcotics hub in the region.

Cartels have good reason to turn Paraguay into a new cocaine transit hub. Peruvian and Bolivian cocaine production has been on the rise for years, and those drugs are increasingly making their way to Europe. With Brazil becoming an important consumer as well as transshipment point, Paraguay, which borders Bolivia and has very porous frontiers with all its neighbors, makes an ideal transit hub. Organized crime syndicates from neighboring Brazil have been establishing themselves in Paraguay for some time. Paraguay also remains one of the most corrupt countries in the Western Hemisphere and a center for illicit finance and trade-based money laundering.

More ominously, Hezbollah has had a presence on the Paraguayan border for at least two decades. While the terror group’s illicit fundraising networks traditionally concentrated on trade-based money laundering activities, their involvement in cocaine trafficking in Paraguay and elsewhere in the Western Hemisphere has grown in recent years. Recent investigations allege that Hezbollah operatives may be behind the uptick in cocaine shipments.

These trends spell trouble for U.S. interests in the region. Paraguay has traditionally been a staunch U.S. ally in the region. Despite its widespread corruption, Paraguay’s relatively low levels of violent crime and drug trafficking have made its economy and political system among the most stable in an otherwise turbulent region. All this is changing dramatically as crime syndicates and terror finance networks turn Paraguay into a new logistical hub for bulk shipments of cocaine.

Washington needs to invest more resources and toughen its diplomatic efforts with Paraguay in order to prevent it from becoming the next narco-state in Latin America. First and foremost, the United States should beef up its Drug Enforcement Administration presence in Asuncion, which to date remains minimal. Boosting cooperation with, and fostering a culture of regional cooperation among, local law enforcement and intelligence agencies should remain a priority. Finally, Washington should also leverage tools such as Global Magnitsky sanctions to crack down on local corrupt officials in cahoots with organized crime.

Emanuele Ottolenghi is a senior fellow at the Foundation for Defense of Democracies (FDD), where he also contributes to FDD’s Center on Economic and Financial Power (CEFP). For more analysis from Emanuele and CEFP, please subscribe HERE. Follow Emanuele on Twitter @eottolenghi. Follow FDD on Twitter @FDD and @FDD_CEFP. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.


Hezbollah Iran in Latin America Sanctions and Illicit Finance