Guatemala’s Anti-Money Laundering Regulations Criticized as Ineffective and Rarely Enforced

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A recent report by investigative website Plaza Publica has highlighted the weaknesses of Guatemala’s laws against money laundering, stating that they are rarely enforced and ineffective in combating illegal activities.

Inadequate Laws

Guatemala’s main authorities responsible for monitoring money laundering, the Special Audit Office (IVE) and the Superintendency of Banks, only have the authority to track suspicious activity within the banking system, leaving a significant gap in their ability to combat illicit cash transfers. The country’s current laws against money laundering focus on illegal cash transfers, with two key pieces of legislation aimed at tackling illicit enrichment currently stalled in Congress.

Examples of Money Laundering

The report highlights several examples of criminal groups using the livestock industry to launder their illegal proceeds. One notable example is Giovani España Arrue, a powerful rancher and associate of the notorious Leones gang. Despite reporting over 21 million quetzales (approximately $2.6 million) in suspicious banking transactions linked to livestock purchases in 2010, neither the Superintendency nor the IVE have the legal tools to investigate these cases.

International Criticism

Guatemala’s slow progress in combating money laundering has been criticized by intergovernmental organization the Financial Action Task Force (FATF), which does not include the country on its list of countries that have failed to sufficiently commit to fighting money laundering. However, despite some efforts to improve anti-money laundering regulations, Guatemala’s rate of progress remains slow.

Convictions and Prosecutions

According to the US State Department, while there were 59 money laundering prosecutions in 2011, only eight cases resulted in convictions. This low conviction rate highlights the need for stronger laws and more effective enforcement mechanisms to combat money laundering in Guatemala.