Key Counterfeit Marketplaces and Enforcement Insights in Paraguay

Paraguay has long struggled with the pervasive issue of counterfeit goods. Early reports described the country as a “counterfeiter’s paradise” and noted its ongoing “war on counterfeit goods.” Recent data underscores the severity of the problem: illicit transactions reportedly account for 40% of Paraguay’s GDP, and approximately 90% of cigarettes in the country are unlawfully imported. Paraguay’s persistent challenges with intellectual property (IP) enforcement have also led to its repeated inclusion in the U.S. Trade Representative’s Special 301 Report.

To provide clarity on enforcement measures and key counterfeit marketplaces, Diego Pérez of Cervieri Monsuárez & Asociados shared insights on protecting IP rights in Paraguay. Paraguayan law offers both civil and criminal remedies against counterfeiting. Although administrative procedures are not established, counterfeiting is treated as a public offense. Specialized Prosecution Offices dedicated to intellectual property operate efficiently, with penalties reaching up to eight years’ imprisonment in severe cases.

Several state agencies support enforcement efforts autonomously. These include DINAPI’s Enforcement Directorate, the Specialized Department against the Violation of Intellectual Property Rights, and the Administrative Coordination of Customs Investigation. The judiciary features specialized criminal judges and an Intellectual Property Directorate under the Supreme Court. The Prosecution Office maintains its own warehouse and destruction facilities, streamlining seizure and disposal processes.

Civil litigation options are also available, allowing rights holders to seek injunctions to cease illicit use and claim damages. However, civil cases are heard by generalist judges, often resulting in lengthier and costlier proceedings. Extrajudicial measures such as cease-and-desist letters can prompt infringers to surrender counterfeit goods and cease sales, but these have limited success in Paraguay.

Pérez notes that alternative dispute resolution mechanisms like mediation and conciliation exist but are rarely utilized. Legislative improvements encouraging ADR could enhance enforcement efficiency. Regarding liability for landlords hosting infringing tenants, criminal liability is unlikely due to personal nature of offenses and contractual disclaimers. Civil claims might succeed if landlords knowingly tolerate repeated infringements without action.

Paraguay currently lacks dedicated anti-counterfeiting associations. Nonetheless, various business chambers—including those for shoe importers, perfumes and cosmetics, industry, and supermarkets—actively file complaints related to smuggling and counterfeiting. An Anti-Piracy and Smuggling Chamber is under development, modeled after Uruguay’s CALPYC, which is recognized regionally for its effectiveness.

1. Pettirossi, San Roque, Ciudad Nueva, and Pinozá neighborhoods in Asunción: This extensive marketplace is characterized by narrow streets and organized, sometimes violent merchants. Enforcement requires coordinated criminal raids at night with riot police and Economic Crimes Department support. Extrajudicial actions have low success here.

2. Silvio Pettirossi International Airport in Luque near Asunción: As Paraguay’s main air gateway, it is a critical point for counterfeit goods including footwear, clothing, electronics, accessories, bags, glasses, and watches. Authorities need to enhance 24/7 merchandise controls.

Brand owners are advised to collaborate closely with specialized authorities such as DINAPI, Customs, and the Economic Crimes Department for effective verification and enforcement at these locations.

Paraguay’s IP enforcement landscape presents both challenges and opportunities. While criminal prosecution mechanisms are robust, civil and extrajudicial avenues face limitations. Strengthening cooperation among rights holders, authorities, and emerging industry groups will be essential to curbing counterfeit trade in the country’s major marketplaces.