Published April 11, 2012
By Felipe Umaña
Briefing TTCVR1208
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The Tri-Border Area is formed by the junction of three different cities: Puerto Iguazú, Argentina; Foz do Iguaçu, Brazil; and Ciudad del Este, Paraguay. Located in the eastern-central part of the Southern Cone in South America, the triple frontier region is known for its impressive Iguaçu Falls – a group of cataracts that draw over 700,000 tourists each year – and other natural sites throughout the the Iguazú National Park. The region is also notable for being the home of the world’s largest hydroelectric plant, the Itaipu Dam.

Demographically, the area is very ethnically diverse. In addition to the native Paraguayans, Brazilians, and Argentine populations, there are also substantial pockets of people of Chinese, Colombian, Iranian, Italian, Korean, Lebanese, Palestinian, Taiwanese, and Ukrainian descent. The triple frontier boasts a large Arab minority presence of around 10,000 and 75,000 people, mostly from Lebanon and Palestine.

Of the three cities that form the Tri-Border Area, Ciudad del Este is the largest and busiest, serving as the region’s economic center. Its streets are regularly clogged with street merchants, shoppers, cambistas (informal currency exchangers), and others that help fuel its burgeoning economy. In fact, Ciudad del Este has ranked third worldwide in cash transactions, averaging well over US$12 billion annually in the early 2000s. Foz do Iguaçu, which boasts some of the region’s most frequented tourist destinations (including Latin America’s largest mosque), is the second largest city. Puerto Iguazú rounds out the trio in terms of population size.

Along with its increasing economic and environmental value, the region has also risen in relevance after the September 11, 2001 terrorist attacks as an area attractive to global terrorist organizations. The region is largely ungoverned due to weak, inadequate, or ignored laws. A myriad of shadowy black markets, pirated CDs, stolen cars, falsified documentation, and trafficked humans – among other commoditized “goods” – all pass through this region either completely undetected or with tacit acceptance from the local governments. Money laundering and tax evasion also form part of the colorful gamut of illegality that runs rampant in what a reporter has termed as “a terrorist’s paradise.” High rates of violence and petty crime also plague the region, and exist in tandem with poor money laundering controls and low government preparedness. All of these activities occur under the purview of corrupt officials, whose expanse throughout the governmental establishment lends continued permanence to the activities in the region. According to a study conducted by the U.S. Government, the triple frontier region generates over US$6 billion in illicit finance. Law enforcement officials in the region suffer from low pay and inadequate training (if any), while working at institutions with hardly any funding.

Equally as disconcerting is the fact that the region is suspected of harboring financing links with numerous iniquitous non-state actor organizations. Scholars and terrorism experts say that the Tri-Border Area is increasingly becoming a focal point for Islamic fundamentalism. In fact, the Tri-Border Area has been called “the most important center for financing Islamic terrorism outside the Middle East.” Because of the lax security apparatus, rampant lawlessness, and illicit activity, American officials believe that the Tri-Border Area serves as a haven for terrorist organizations and criminals alike – non-state actors who destabilize the region and pose security problems for countries worldwide.

This report is a follow-up to FFP’s 2009 report, The Crime-Terrorism Nexus: Risks in the Tri-Border Area, available at: www.fundforpeace.org/global/?q=ttcvr0905

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