Guatemala’s Ineffective Laws Against Money Laundering Leave Criminals Free to Wash Dirty Money

Guatemala has been struggling to combat money laundering, with ineffective laws and a lack of enforcement allowing criminals to easily wash their dirty money.

A Lack of Effective Legislation

According to a recent report by Plaza Publica, Guatemala’s Special Audit Office (IVE) and Superintendency of Banks are only able to track suspicious activity within the banking system. This leaves large-scale illicit cash transfers outside their scope. The majority of money laundering in Guatemala takes place outside of the financial sector, with criminals using real estate, ranching, and even the concert business to launder their profits.

A Notorious Example

One notable example is Giovani España Arrue, a powerful rancher who used drug trafficking proceeds to buy up land and invest in the pig livestock market. Despite reporting 21 million quetzales (approximately $2.6 million) worth of suspicious banking transactions related to livestock purchases in 2010, neither the Superintendency of Banks nor the IVE have the necessary legal tools to investigate this activity.

Stalled Laws

Two proposed laws aimed at making it easier to track money laundering cases, including one targeting illicit enrichment, are currently stalled in Congress. Passing these laws could give other institutions, such as the Public Ministry, the authority to pursue money laundering cases.

Lack of Progress

Despite this lack of progress, international organization the Financial Action Task Force (FATF) does not include Guatemala on its list of countries that have failed to commit to fighting money laundering. However, the country’s slow pace of progress is evident in the statistics: while there were 59 money laundering prosecutions in 2011, there were only eight convictions.

A Call to Action

The situation highlights the need for Guatemala to strengthen its laws and enforcement mechanisms if it hopes to effectively combat money laundering and disrupt organized crime groups. Until this happens, criminals will continue to find ways to launder their dirty money with impunity.