Israel needs all the friends it can get to fight delegitimization in international forums. Paraguay is one of them – thanks to the leadership of its president, Horacio Cartes, who today begins a two-day visit to the Jewish state. Since 2013, when Cartes took office, Paraguay has been taking a less biased stance toward Israel in international bodies, and for that deserves recognition. That should not, however, come at the price of ignoring the country’s permissive attitude toward Hezbollah.Paraguay, the home of a large Shi’ite Lebanese diaspora, remains a haven for Hezbollah’s illicit finance and a major center of its economic activity.The tri-border region, or TBA, where Argentina, Brazil and Paraguay meet has traditionally been Hezbollah’s hub of activities in Latin America. But in recent years the group’s activities have extended to virtually the entire length of the Paraguay-Brazil border, a frontier so lawless and porous it is almost non-existent. The entire frontier is rife with smuggling and counterfeit goods.Cooperation is also growing between terrorist groups and narco-traffickers, who use Paraguay as a transit point for drugs on their way to Western markets.The US Treasury has repeatedly sought to address this threat by targeting Hezbollah’s financiers and companies in the region, but any success will be limited without full support from local authorities.Hezbollah presence in Paraguay is well documented. US interest in the TBA began at the end of the 1990s and culminated, in 2006, with US Treasury designating nine individuals and two corporate entities: the Galeria Pagé shopping center and Casa Hamze, a business inside it owned by the US-sanctioned Hamzi Ahmad Barakat. Galeria Pagé is still there – it has been renamed Galeria Uniamerica, although street currency-traders serving its shops still wear its distinctive turquoise T-shirts. According to local officials, Mohammad Tarabain Chamas, the center’s US-sanctioned manager, is still running it. As for Barakat, he continued his business activities until he was arrested in Brazil in 2013, not for terrorism financing but on fraud charges. That arrest suggests the 2006 terrorist designation cut him off from the US financial system, but still allowed him to continue to operate his businesses from Paraguay with impunity. It took a set of financial crimes in Brazil for authorities to take action against him.Barakat and Tarabain are not the only ones to have sought sanctuary in the lax environment of the Paraguay-Brazil border areas. The Treasury has described Sobhi Mahmoud Fayad as a senior Hezbollah official in the TBA who served as a liaison between the Iranian embassy and “Hezbollah community” there. Fayad was also sanctioned in 2006 for engaging in financial activities involving illicit drugs and counterfeit dollars. Still, a decade later, he freely comes and goes between Paraguay and Lebanon. Prime Minister Benjamin Netanyahu should ask Cartes why Hezbollah financiers still freely operate in Paraguay.Its parliament, after all, has passed a terrorism finance law which empowers its authorities to prosecute Hezbollah’s financial activities in the TBA.The government must now enforce it, particularly given Hezbollah’s growing reliance on trade in the TBA to launder drug revenues on behalf of narco-traffickers.Less than two months ago, Brazilian drug baron and fugitive Jorge Rafaat Toumani was gunned down by a commando in the center of a violent Paraguayan border town. The gun battle involved dozens of fighters using anti-aircraft guns to assassinate the fugitive in his armored car. Toumani’s assassination has been attributed to ongoing turf wars between rival drug cartels in Eastern Paraguay. Less known is that Toumani is believed to have had close associations with local members of the Lebanese merchant community, whose mosque in the nearby Brazilian town of Ponta Pora is a hub of Hezbollah activity and whose members have established links with Iran’s regime.For Paraguay, fighting the connection between terrorism and organized crime should be a matter of national security. Its interests coincide with Israel’s desire to see Hezbollah’s illicit finance cut off completely. Yet Hezbollah’s activities in the country continue undisturbed, thanks in no small measure to the corruption and collusion of local officials and politicians.Given the growing prospects for a future military showdown between Israel and Hezbollah, Jerusalem should ask Paraguay to be more proactive against Hezbollah’s activities in its own backyard.The author is a Senior Fellow at the Foundation for Defense of Democracies.