Brazilian and Paraguayan forces allegedly exchanged fire last week in the crime-ridden border region, highlighting possible tensions between the security forces of the two countries as they attempt to crack down on trafficking.

According to Paraguay’s Diario ABC, the incident began when Brazilian federal police spotted two boats crossing the Parana River into Brazilian territory on the evening of September 9. The officials sent a patrol boat to intercept them, and found the vessels were loaded with illicit drugs and other contraband, including cartons of cigarettes.

After securing the smugglers’ vessels, the police came under high-caliber fire from the Paraguayan side of the river, near a Paraguayan Marines base. The Brazilians returned fire, believing that the Paraguayan forces were trying to scare them off in order to shield the smugglers.

The commander in charge of the Paraguayan base, Captain Elpidio Moran, denied the Brazilians’ version of events. Although he admitted to hearing shots that evening, he denied that his soldiers were involved. According to Moran, the shots were mixed with pistol fire, and had only come from the Brazilian side. He added, however, that the night was too foggy to see properly. Military spokesman Colonel Luis Gonzalez supported Moran’s statement, but added that the armed forces would carry out an independent investigation into the event.

While the truth about the night’s events remains murky, the incident is a good illustration of the level of corruption in Paraguay’s military. Corruption in the Paraguayan armed forces has a long history, dating back to the 35-year dictatorship of Alfredo Stroessner. Under Stroessner, military officials were deeply involved in the illegal narcotics trade, usually operating with total impunity. Perhaps the most well-known case of this was that of Colonel Gustavo Stroessner, the leader’s son, who in 1987 was implicated by Washington in an international cocaine trafficking ring.

This past year there have been several cases of alleged criminal links between military officials in Paraguay and organized crime. Last February, Colonel Waldimiro Ausberto Gill Bejarano was arrested in Brazil on charges that he illicitly smuggled in several thousand dollars’ worth of prescription drugs. In April, more than 6,000 7.62 caliber rounds “went missing” from an air force base in the municipality of Luque, and it is suspected that the ammunition was sold to criminal groups. Days later, this incident prompted several anonymous military officers to express concern to local media over corruption in their ranks.

These allegations against the marines come at an important moment in Brazil-Paraguay relations. In late June, Brazil and Paraguay signed a series of bilateral agreements meant to boost intelligence sharing and coordinate anti-narcotics operations in the border region, prompted by concerns that Brazilian drug gangs have now shifted their operations into Paraguay. The governor of Brazil’s Parana state recently announced a large-scale operation to deploy satellites and spy planes in an attempt to close the border to trafficking.

If Paraguayan authorities in this part of the border region have been so infiltrated by crime that elements in the military are prepared to fire on foreign forces to protect smuggling shipments, this could put a major wedge between the country and its larger neighbor. For Brazil, combating organized crime has become a major priority, as the country is currently in the process of trying to increase security and improve its image in preparation for the 2014 World Cup and the 2016 Olympics. Paraguay’s more anarchic security situation could pose a threat to this.