Guatemala: A Regional Hub for Money Laundering and Drug Trafficking - Origin, Consequences, and the Fight Back

Guatemala’s Economy and Capital: Origins and Diversification

• Traditional capital: roots in indigo cultivation, coffee, sugar, banana industries, textile manufacturing, finance, and international enterprises
• Licit emergent capital: emergence with economic liberalization in late 20th century, including tourism, technology, and manufacturing
• Illicit emergent capital: money laundering and drug trafficking tarnishing the nation’s reputation

Money Laundering and Tax Evasion in Guatemala

• Lax regulatory system with lenient accountability requirements for wealthy individuals
• Approximately $500 million in money laundering and investment annually
• $400 million in national budget lacking transparency, vulnerable to corruption

Drug Trafficking: A Strategic Role in Central America

• Guatemala as a transportation hub for cocaine from Colombia to the US
• Local drug trafficking organizations serving as intermediaries
• Complicity of government officials and corporate entities

Combating Financial Crimes: Modernizing AML Regulations and the Role of CICIG

• Guatemala investing in modernizing legal framework and strengthening law enforcement
• United Nations-supported Commission Against Impunity in Guatemala (CICIG) rooting out criminal networks
• Successes in prosecuting high-level criminals and serving as a model for curbing impunity

Unifying and Modernizing AML Regulations

• Proposed bill in Congress to update laws from 2001 and 2005 and align with FATF Recommendations
• Expand definition of money laundering and terrorist financing offenses
• Bring digital wallet services and cryptocurrencies under regulatory oversight

A Brighter Future for Guatemala

• Progress being made with the establishment of organizations like CICIG and updated legislation
• Commitment to mitigating challenges and curbing criminal activities in the country