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    Money Laundering and the Financing of Terrorism: Understanding the Attitudes of the Tri-Border Area Population (Brazil, Argentina, and Paraguay)

    Aug 22, 2023

    4 min read

    Anti-Corruption & Public Integrity Criminal Justice & Transnational Organized Crime Judicial System Strengthening Latin America & Caribbean Argentina Brazil Paraguay
    Money Laundering and the Financing of Terrorism: Understanding the Attitudes of the Tri-Border Area Population (Brazil, Argentina, and Paraguay)
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    In South America, the Tri-Border Area (TBA) of Argentina, Brazil, Paraguay is commonly known as a hub for criminal activities for terrorist financing networks. Their broad range of large-scale criminal schemes in the region include money laundering, smuggling, fraud, and counterfeiting, to which residents of Argentina, Brazil, and Paraguay may unwittingly contribute via their everyday activities. Specifically, Ciudad del Este in Paraguay, Foz de Iguaçu in Brazil, and Puerto Iguazú in Argentina lie on the Tri-Border Area between the three countries.

    ABA ROLI implements the regional program, Raising Public Awareness on Countering the Financing of Terrorism in the Tri-Border Area, funded by the U.S. Department of State. The program aims to improve the capacity of the criminal justice sector and financial institutions in Argentina, Brazil, and Paraguay by communicating and raising public awareness about the risks and realities of money laundering and terrorist financing. A survey was recently conducted to gain insight into how citizens perceive these activities in their communities and within the framework of the program. The survey reached 902 citizens of Ciudad del Este, Foz de Iguaçu, and Puerto Iguazú, as well as Asunción and Greater Asunción in Paraguay. Participants included households and business owners, as well as regular shoppers in Ciudad del Este.

    Graphic 1: Respondent Data

    Top Left: Income Level of the respondents, Top Middle: Ages of the respondents (Average Age is 39.8 years old), Top Right: Gender of the respondents, Bottom Left: Regions where the respondents are based, Bottom Right: Surveyed segment of the respondents.

    Graphic 1: Respondent Data

    These results provide a valuable overview of the population's understanding and attitude towards money laundering and terrorism financing, which allows the program to better understand the current context and plan the implementation of its activities, which include the creation of a public awareness campaign on money laundering and terrorism financing. This campaign will be directed towards the general population, showing how daily activities can inadvertently contribute to others’ criminal activity, to reduce involuntary participation in them.

    While the survey identified numerous area-specific findings, it also yielded ten general conclusions common to all three cities within the Tri-Border Area:

    Conclusion #1

    There is little to no conversation among the general population about money laundering or the financing of terrorism.

    Graphic 2: Conversation frequency regarding money laundering subject in the last 6 months

    General findings: Conversations about money laundering or financing of terrorism happens little or not at all in the general population. The most frequent answer is ‘never’; only in Asunción the most frequent answer is ‘rarely’; Foz de Iguaçu has the highest frequency in the answers, ‘generally’, almost always’, and ‘always’. 47% of respondents have not spoken about money laundering in the last six months.

    Graphic 2: Conversation frequency regarding money laundering subject in the last 6 months

    Conclusion #2

    Television is considered to be the medium where most people can access and hear about these issues. Those who talk the most about them, or do so more sporadically, use social networks as another tool to learn about these issues (mainly the youth sector).

    Graphic 3: Communication channels where respondents remember having heard about money laundering*

    General finding: Television stands as the channel with the greatest reach and recall for these issues. But those who talk the most or do so more sporadically join social networks as another means to find out (mainly the younger sector). *Multiple answers (the number of answers get higher; the number of respondents does not change)

    Graphic 3: Communication channels where respondents remember having heard about money laundering*

    Conclusion #3

    In the view of the general population, money laundering is a crime, originating from illegal activities and acts of corruption that produce dirty or illegal money. However, the concept of terrorism financing is not fully established: the public does not generally understand what terrorism financing is or assumes that it is worse than money laundering. There is a stronger emotional component in its perception as opposed to an objective one. Introducing the concept into citizens' conversation will provide the opportunity to address this issue.

    Graphic 4: General associations and perceptions of respondents about money laundering and terrorism financing

    It is in Asunción where it is most related to ‘Drugs and drug trafficking' (33%) and in Foz de Iguaçu where the relationship with corruption is the highest (30%). The border cities reach the highest percentages of ignorance (Foz de Iguaçu, 20%, Puerto Iguazú and Ciudad del Este, 16% in both cases.)

    Graphic 4: General associations and perceptions of respondents about money laundering and terrorism financing

    Graphic 5: Top of mind (terrorism financing)

    Graphic 5: Top of mind (terrorism financing)

    For people located in the tri-border area, the notion of terrorist financing is less stabilized. People don’t know or assume that it is about worse acts than money laundering (trend on Ciudad del Este); once again, associated with drug trafficking specifically in Asunción.

    Conclusion #4

    There is a notion that money laundering occurs in practice through the use or introduction of money from illegal activities into the financial system via a variety of means, with exchange and gambling houses perceived as being particularly vulnerable.

    Conclusion #5

    It is widely accepted that these activities are closely related to the sale of drugs and contraband, which exist due to corruption and the need for the authorities to strengthen governance in the area, in particular the capacity of services to prevent crime.

    Conclusion #6

    As far as their daily economic activities are concerned, citizens do not think that they are vulnerable when it comes to money laundering.

    Conclusion #7

    In addition, a lack of distinction exists between legal activities that facilitate money laundering and those that are illegal and facilitate money laundering; it could be argued that illegal activities, such as drug trafficking, are perceived as legal business by some individuals.

    Graphic 6: Most susceptible businesses to money laundering

    Graphic 6: Most susceptible businesses to money laundering

    When they do not relate their daily activities to money laundering, there are specific businesses remembered as susceptible, and they are related to entertainment and high price products and estates. Drug trafficking is the most frequent perception of ‘susceptible business’ in Asunción, Puerto Iguazú, and Foz de Iguaçu.

    Conclusion #8

    While the surveyed population claims to view money laundering and terrorism financing as important issues, the lack of information and in-depth awareness reveals inconsistencies. While they claim that the information about these topics is easy to understand, the lack of knowledge remains evident.

    Graphic 7: Perception of how easy/hard money laundering is to understand

    When thinking about the information received on the subject, 67% of respondents believe that money laundering is easy/very easy to understand, while 33% of respondents find it hard/very hard to understand.

    Graphic 7: Perception of how easy/hard money laundering is to understand

    Conclusion #9

    Government entities are perceived with a certain level of skepticism, as 7 out of 10 of those polled in the survey said they would not report if faced with money laundering or terrorism financing situations because they were afraid of reprisals or disappointment should they report.

    Graphic 9: What would respondents do if faced with money laundering or terrorism financing (ML/TF) situations?

    Most would not report money laundering situations. The low to no reaction to these situations shows the low credibility of government entities: seven out of ten respondents will not report if they are faced with ML/TF situations because they are afraid of reprisals or disappointment that it will be of no use. Asunción is the most ‘optimistic’ area because it has the highest level of ‘reporting’, while the most frequent cause of not reporting has to do with being afraid.

    Graphic 9: What would respondents do if faced with money laundering or terrorism financing (ML/TF) situations?

    Conclusion #10

    It is essential to highlight that money laundering and terrorism financing issues are often underappreciated in the lives of individuals. When responding to the survey, many say that these issues are important, but only because they feel it is politically correct to say so. Given their responses to the rest of the survey, it is clear they have a limited understanding of how these crimes affect their lives, and how they can be a key factor in reducing the number of involuntary actions contributing to these situations.

    Graphic 10: Relevance given by respondents to money laundering and terrorism financing.

    Cities in the tri-border area say that they consider the ML/TF issue as highly relevant, but also has the lowest intention of reporting it in case of knowing about a laundering situation.

    Graphic 10: Relevance given by respondents to money laundering and terrorism financing.

    Overall, the survey provides valuable insights into people's attitudes towards money laundering and terrorism financing that can help inform policymakers and other stakeholders regarding how best to tackle these issues going forward. It is clear from these findings just how important it is for Paraguayan, Brazilian, and Argentinian authorities to take proactive steps, including greater educational efforts plus stronger institutional safeguards, to ensure individuals residing across this sensitive border area know and recognize suspicious activities, avoid unwilling participation, and receive adequate protection in case of reporting these activities.

    The Raising Public Awareness on Countering the Financing of Terrorism in the Tri-Border Area Program will benefit from these findings to successfully implement its activities, particularly its awareness campaign which will cover all three Tri-Border Area cities over a period of 12 months beginning in October 2023.

    The materials contained herein represent the opinions of the authors and editors and should not be construed to be those of either the American Bar Association or ABA Rule of Law Initiative unless adopted pursuant to the bylaws of the Association. Nothing contained herein is to be considered as the rendering of legal advice for specific cases, and readers are responsible for obtaining such advice from their own legal counsel. These materials and any forms and agreements herein are intended for educational and informational purposes only.