FCPAméricas Blog

Guatemala’s Turn against Corruption… with help from the CICIG

Author: Guest Author

GuatemalaThe is a guest post from Juan Carlos Tristan, an attorney at BLP Legal in Costa Rica.

Guatemala has been known for its history of oppression, extreme violence, and most recently political corruption.

Now, the Guatemalan people are reacting. The society has been indirectly motivated by the “International Commission Against Impunity in Guatemala” (“CICIG”) and is protesting against corruption, with notable results, as described in this post. The uncovering of certain sensitive corruption scandals over the last months has provoked a succession of extensive public protests and strikes in Guatemala.

Guatemala has not been involved in any significant FCPA enforcement actions so far (except for one plea agreement pursuant to the Shot Show cases); but the country has certainly suffered under the burden of corruption for a long time. Transparency International’s 2014 Corruption Perceptions Index ranks Guatemala with a poor 32/100 resulting in position 115 out of 175 countries.

The Current Scandal – “La Línea”

On Tuesday September 1st, Guatemala’s Congress unanimously voted to strip President Otto Pérez Molina of his immunity due to the recent corruption scandals. As a result, Pérez Molina is prohibited from leaving the country and a warrant has been issued for his arrest. The next day, Perez Molina resigned, and afterwards was arrested.

Guatemala is currently is the midst of one of the largest social and political scandals in recent years. Its political system inspires uncertainty, and its social and judicial systems lack stability. This new scandal has disrupted Guatemala’s political establishment just days before the September general elections.

The CICIG has played a crucial role in Guatemala’s recent developments, uncovering a corrupt customs network that implicates senior officials. The customs fraud network is known as “La Linea” (“The Line”).  Through this network the group allegedly took bribes in return for underreporting the value of imported goods.

Specifically, “La Linea” charged certain fees to importers in exchange for fraudulently lowering the taxes on goods they brought into the country. Importers who collaborated with “La Línea” would typically pay only around 40% of the mandated import taxes. The other 30% went to “La Línea” (Government Officials part of the scheme), while the importers pocketed the remaining 30%. Container inspectors are said to have received around US$1,000 a week for participating in this scheme, while the entire “La Línea” network might have earned around US$328,000 per week.

The investigation has led to approximately 30 high-profile arrests and forced the resignation of the Guatemalan Vice President Roxana Baldetti and President Pérez Molina. Recently, the Prosecutor alleged that Baldetti accepted US$3.7 million in bribes as part of “La Línea” scheme. Baldetti and Pérez Molina have been now arrested.

Optimism for Guatemala’s Fight Against Corruption

One notable development in Guatemala is that, in 2007, the government agreed to charter the CICIG – a partnership between the United Nations and Guatemala’s government to address a history of impunity, violence and corruption in the country. CICIG was authorized to conduct investigations and initiate legal actions before Guatemalan courts.

CICIG corruption investigations have now reached the highest levels of government, and have advanced a noteworthy strategy against corruption and impunity.  “La Línea” is just one example of recent corruption investigations orchestrated by the CICIG.

In particular, the CICIG has strengthened prosecutors’ capacity by, among others:

  • Helping establish a special investigation methods unit;
  • Helping launch a criminal analysis section;
  • Introducing a witness protection office;
  • Promoted legal reforms, including laws to create special high-risk courts, regulate firearms and ammunitions and permit plea bargaining;

In April 2015, the Guatemalan Government agreed to extend the CICIG for an additional two-year period. The current mandate of CICIG was set to expire on September 2015.

The CICIG’s greatest challenge over the next two years is ensuring that national institutions have the training, tools and independence to combat impunity. For anti-corruption practitioners in Latin America, Guatemala will continue to be a country to watch.

The opinions expressed in this post are those of the author in his or her individual capacity, and do not necessarily represent the views of anyone else, including the entities with which the author is affiliated, the author`s employers, other contributors, FCPAméricas, or its advertisers. The information in the FCPAméricas blog is intended for public discussion and educational purposes only. It is not intended to provide legal advice to its readers and does not create an attorney-client relationship. It does not seek to describe or convey the quality of legal services. FCPAméricas encourages readers to seek qualified legal counsel regarding anti-corruption laws or any other legal issue. FCPAméricas gives permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author and to FCPAméricas LLC.

© 2015 FCPAméricas, LLC

Post authored by Guest

Categories: Customs, Enforcement, English, FCPA, Guatemala

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