Financial Crime World

Guatemala Hit with US Sanctions Over Corruption Scandal

The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on two Guatemalan government officials for their involvement in corruption, further isolating Guatemala from international financial systems.

Background

Gustavo Adolfo Alejos Cambara, a former Chief of Staff for the Alvaro Colom presidential administration, and Felipe Alejos Lorenzana, an elected delegate to the Congress of the Republic of Guatemala, were designated under Executive Order 13818 for their roles in corruption. The sanctions come after investigations revealed that both individuals had sought to influence the judicial selection process in Guatemala.

Allegations

According to investigators, Gustavo allegedly used his position to facilitate payments to congressional representatives and judges in exchange for favorable treatment in court cases. Felipe, a close associate of Gustavo, is accused of facilitating bribes from private construction firms to ensure congressional support for magistrates who would protect him from prosecution.

Reaction from Treasury Secretary

Treasury Secretary Janet L. Yellen said the sanctions serve as a warning that corruption will not be tolerated and that Guatemala must hold its officials accountable.

“Corruption in Guatemala’s judicial selection process undermines democratic principles in the region,” Yellen said. “Today’s action shines a light on corruption and promotes accountability for those who would seek to thwart the judicial process.”

Impact of Sanctions

The sanctions come at a time when Guatemala has faced criticism over its handling of anti-corruption efforts, including the decision not to renew the mandate of the United Nations-established International Commission Against Impunity in Guatemala (CICIG) in 2019.

As a result of the sanctions:

  • All property and interests in property owned by Gustavo and Felipe that are in the US or controlled by US persons must be reported to OFAC.
  • The US also prohibits transactions involving any property or interests in property owned by designated individuals without authorization from OFAC.

Global Magnitsky Human Rights Accountability Act

The move is part of the Global Magnitsky Human Rights Accountability Act, which aims to hold accountable those who commit serious human rights abuse and engage in corruption. Guatemala joins a growing list of countries targeted under the sanctions regime.

Key Takeaways

  • The US has sanctioned two Guatemalan government officials for their roles in corruption.
  • The sanctions come after investigations revealed that both individuals had sought to influence the judicial selection process in Guatemala.
  • The sanctions are part of the Global Magnitsky Human Rights Accountability Act, which aims to hold accountable those who commit serious human rights abuse and engage in corruption.