Paraguay: Breach of trust case against ex-Customs chief dismissed

A Paraguayan judge has dismissed a criminal case alleging breach of trust against Julio Fernández, the former director of National Customs during the Mario Abdo Benítez administration. The decision by Judge Humberto Otazú marks the end of legal proceedings initiated by former senator Martín Arévalo.

The case stemmed from a 2020 complaint filed by Arévalo and Ahmad Khalil Chams, accusing Fernández and María Guadalupe Ruiz, an administrator at PAKSA, of causing an estimated US$6 million in damages. The core of the accusation was the alleged failure to secure insurance against theft, robbery, or damage for seized merchandise stored at GICAL S.A. Additionally, the complaint alleged an irregular direct sale of remaining confiscated goods without public bidding and at prices significantly below market value.

However, Judge Humberto Otazú, presiding over economic crimes, accepted the prosecution's request for dismissal. The prosecutors, Luz Guerrero and Laura Giacummo, had initially requested the dismissal in January of the previous year, arguing that the actions of the accused lacked criminal classification.

The judge's ruling, detailed in Interlocutory Order No. 276, supported the prosecution's arguments. According to the order, the judge determined that the Customs Code does not explicitly obligate the Director of Customs to contract insurance for seized merchandise. Furthermore, the ruling stated that state entities can only insure their own assets, and since confiscated goods are not considered active assets of Customs, the institution was not legally empowered to insure them. The lease agreement with GICAL S.A. also did not mandate insurance coverage from either party.

Regarding the sale of the goods, the document explained that it was a direct consequence of Resolution A.A.P. N° 268/20, which formally declared the cargo confiscated due to smuggling by GECU S.A. This resolution became final and was published through press announcements, as per Article 300 of the relevant regulations.