Disputes - international:
unruly region at convergence of Argentina-Brazil-Paraguay borders is locus of money laundering, smuggling, arms and illegal narcotics trafficking, and fundraising for extremist organizations; two uncontested boundary disputes with Uruguay over Isla Brasilera at the tripoint with Argentina at the confluence of the Quarai/Cuareim and Uruguay rivers, and in the 235 square kilometer Invernada River region over which tributary represents the legitimate source of the Quarai/Cuareim River; the Itaipu Dam reservoir covers over a once contested section of Brazil-Paraguay boundary west of Guaira Falls on the Rio Parana; an accord placed the long-disputed Isla Suarez/Ilha de Guajara-Mirim, a fluvial island on the Rio Mamore, under Bolivian administration in 1958, but sovereignty remains in dispute

Illicit drugs:
second-largest consumer of cocaine in the world; illicit producer of cannabis; trace amounts of coca cultivation in the Amazon region, used for domestic consumption; government has a large-scale eradication program to control cannabis; important transshipment country for Bolivian, Colombian, and Peruvian cocaine headed for Europe; also used by traffickers as a way station for narcotics air transshipments between Peru and Colombia; upsurge in drug-related violence and weapons smuggling; important market for Colombian, Bolivian, and Peruvian cocaine; illicit narcotics proceeds are often laundered through the financial system; significant illicit financial activity in the Tri-Border Area (2008)