Disputes - international: two short sections of boundary with Uruguay are in dispute - Arroio Invernada (Arroyo de la Invernada) area of the Rio Quarai (Rio Cuareim) and the islands at the confluence of the Rio Quarai and the Uruguay River

Illicit drugs: limited illicit producer of cannabis, minor coca cultivation in the Amazon region, mostly 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 the US and Europe; increasingly used by traffickers as a way station for narcotics air transshipments between Peru and Colombia; upsurge in drug-related violence and weapons smuggling