Colonia del Sacramento is in Uruguay. It is filled with old colonial buildings and cobbled streets, and is inscribed on the UNESCO World Heritage List. Colonia was founded in 1680 by the Portuguese, sandwiched in between the Portuguese colony of Brazil and the Spanish Rio de la Plata (later Argentina). Its strategic position and use as a smuggling port meant that its sovereignty was hotly contested and the city changed hands several times between Spain and Portugal. http://wikitravel.org/en/Colonia_del_Sacramento