The Paraguayan Senate voted this week the expropriation of 52,000 hectares (128,000 acres) of a large tract of land owned by a company representing the interests of South Korean religious leader and business magnate Rev. Sun Myung Moon.
After a debate dragging on for more than six hours the Senate approved the initiative by a vote of 24 to 14, which must now be considered by the Lower House.
The bill was promoted by groups of residents of Puerto Casado, which lies within the approximately 600,000 hectares (1.5 million acres) that Moon's Unification Church owns in northern Paraguay.
Puerto Casado on the banks of the Paraguay River, "is now free and we can say it," said Francisco Dick, one of the northerners who cheered along with other fellow residents gathered outside the Congress building in the capital Asuncion.
Those opposed to the project alleged "religious intolerance" as the seizure is supported by the local Catholic Church hierarchy.
Others argued President Nicanor Duarte's government is risking that South Korea could complain both domestically and internationally that Paraguay has violated an investment-protection agreement signed in 1992.
"I think we are going to have serious international problems" said opposition legislator Miguel Abdon Saguier noting that the decision also violates agrarian legislation.
Senator Domingo Laino argued that the confiscated land only represents 8% of Moon's holdings in the Chaco region.
On the eve of the legislative session, tensions rose in Puerto Casado, a town of 6,000 on the Brazilian border, where a Catholic oriented community radio station was recently vandalized by unknown persons. The incident prompted the government to send a military contingent into the area to keep law and order.
In 2000 Reverend Sun Myung Moon representatives purchased the land for 22,5 million US dollars from Argentine company Carlos Casado, a corporation that in the late 19th century bought the entire Paraguayan Chaco region totaling over 5 million hectares ( 12.35 million acres).