A report by Guatemalan investigative website Plaza Publica sets out why Guatemala’s laws against money laundering are ineffective and rarely enforced.
The main authorities charged with monitoring money laundering in Guatemala, the Special Audit Office (IVE) and the Superintendency of Banks, only have the authority to track suspicious activity within the country’s banking system. As Plaza Publica correspondent Rodrigo Baires Quezada reported, this is a major hurdle for Guatemala’s fight against money laundering, as the majority of illicit cash transfers take place outside the realm of private and public banking, in the real estate, ranching, and even the concert business.
One example is Giovani España Arrue, a powerful rancher based in Guatemala’s northern Peten region, who was an associate of criminal group the Leones, Plaza Publica reported. Using cash earned from drug trafficking, España bought up land in Peten and invested heavily in the pig livestock market, in order to disguise the true origins of his wealth, before he was killed in 2010. According to Plaza Publica, other criminal groups in Guatemala — including the Lorenzanas and the Overdick family — were also known to have laundered their criminal proceeds in the livestock business.
But while the Superintendency of Banks reported that there were some 21 million quetzales (about $2.6 million) worth of suspicious banking transactions in livestock purchases in Guatemala in 2010, neither the Superintendency or the IVE have the necessary legal tools to investigate this suspicious activity.
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Most of Guatemala’s current laws against money laundering target the illegal transfer of cash. Two laws that would make it easier for the authorities to track money laundering, including a law against illicit enrichment, are currently stalled in Congress. As Plaza Publica points out, passing this legislation could make it easier for other institutions beside the IVE and the Superintendency of Banks, such as the Public Ministry, to track money laundering cases.
Despite these problems, intergovernmental organization the Financial Action Task Force (FATF) does not include Guatemala on its list of countries that have failed to sufficiently commit to fighting money laundering. Still, the pace of progress has been slow: according to the US State Department, while Guatemala had 59 money laundering prosecutions in 2011, there were only convictions in eight cases.