Guatemala Faces Challenges in Fight Against Corruption and Money Laundering

Washington D.C. (AFP) - Guatemala is struggling to combat corruption and money laundering, with a significant portion of its national budget spent without transparency, according to a recent report.

Transparency Concerns

The country’s government has allocated approximately US$500 million, equivalent to 2% of its GDP, for various projects. However, the lack of transparency in budget allocation raises concerns about potential corruption. Additionally, around US$400 million is spent without adhering to international standards, increasing the risk of funds being misused or laundered.

Progress in Anti-Money Laundering Efforts

Despite these challenges, Guatemala has made progress in its anti-money laundering efforts. The country’s Financial Intelligence Unit (IVE) has created a robust network for analysis and prevention, and a strong anti-laundering law passed in 2001 is being enforced.

However, the IVE faces capacity issues and difficulties in sharing information with public prosecutors and police officers, hindering investigations and prosecutions. “More convictions need to be made,” said Judge Gabriel Gómez, one of Guatemala’s most respected Supreme Court judges.

Limited Convictions

The IVE has referred over 400 cases to the Prosecutor’s Office (MP) since 2009, but only 80 have reached trial, resulting in just 23 convictions. Many cases involve complex and paradigmatic schemes, such as a recent case involving a network of 300 individuals who laundered US$40 million from Panama and Colombia.

Strengthening Anti-Money Laundering Laws

Guatemalan authorities are working to strengthen their anti-money laundering laws, with two critical bills debated in 2010. One law allows the confiscation of properties when owners cannot prove their legal origin, while another aims to fulfill the country’s commitments to the Organization for Economic Cooperation and Development (OECD) recommendations on money laundering.

Opposition from Economic Elites and Regional Leaders

However, these bills faced strong opposition from economic elites and regional leaders, who claimed that they would threaten property rights and personal security. Experts argue that the regulation is necessary to combat corruption and money laundering, and that it should not scare those who have obtained their wealth legally.

Increased Pressure and Lobbying Efforts

The fight against money laundering in Guatemala is expected to gain momentum with increased political pressure and lobbying efforts from international actors, civil society organizations, and respected politicians. “These actions are essential for the fight against money laundering, which could become a revolution in Guatemala,” said Ricardo Barrientos, former Finance vice-minister for Transparency.

Conclusion

The struggle against corruption and money laundering in Guatemala is complex and ongoing, but it is hoped that increased transparency and cooperation will lead to greater progress in the years ahead.