A rare conflict between two states that are otherwise historically close allies is escalating: Paraguay’s government demanded on Thursday that the US “expedite the withdrawal” of its ambassador to Asuncion, following tougher sanctions imposed on a company allegedly linked to a right-wing former president, whom Washington describes as “corrupt”.

On Tuesday, the US Department of the Treasury announced tougher sanctions on the interests and assets of Tabacalera SA, a company identified with former Paraguayan president Horacio Cartes (2013-2018), tobacco industry magnate. Washington has already imposed sanctions on Mr Cards in the past, calling him “corrupt” and banning all dealings with the US by the former head of state or members of his family in 2022.

Mr. Cartes, 68, remains president of the Colorado party, the hegemonic party in Paraguayan politics, to this day — in power for 76 years, with the exception of only a brief leftist stint (2008-2012). He is considered a political patron and mentor of Santiago Peña, 45, who was elected head of state last year.

In a statement, the Ministry of Foreign Affairs in Asuncion expressed regret yesterday for the “politicization” and “media exposure” of the “administrative sanctions” against Tabacalera.

“That’s why we ask the American government to speed up the process of the ambassador’s (Mark Ostfield) withdrawal”, in order to avoid “loss of trust” and “a blow to the relations we maintain historically”, he added.

Mr. Ostfield, the US ambassador to Asuncion since March 2022, who is nearing the end of his term in the post, has placed particular emphasis on the fight against corruption, which is endemic in Paraguay, which is otherwise characterized by a stable economy.

The landlocked country of 7.5 million people, which is surrounded by Bolivia, Argentina and Brazil and has a porous border where smuggling of all kinds thrives, ranks 136th (out of 180) on the NGO Transparency International’s Corruption Perceptions Index .

On Thursday, Mark Ostfield was summoned to Paraguay’s Foreign Ministry, where he defended the measures against Tabacalera, arguing that it is a company that provides “financial, material and technological support” to Mr. Cartes, who is subject to sanctions.

The company’s management strongly protested the sanctions, arguing that the former president Kartes, once its main shareholder, no longer holds its share capital and ceased to have relations with it, seeing measures with “commercial purposes” and denouncing “abuse of power”. on the part of Washington.