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Executive Summary

Guatemala has the largest economy in Central America, with a USD 78.45 billion gross domestic product (GDP) and an estimated 3.0 percent growth rate in 2018.  Remittances, mostly from the United States, increased by 13.4 percent in 2018 and were equivalent to 11.8 percent of GDP. The United States is Guatemala’s most important economic partner.  The Government of Guatemala (GoG) continues to make efforts to enhance competitiveness, promote investment opportunities, and work on legislative reforms aimed at supporting economic growth.  More than 200 U.S. and other foreign firms have active investments in Guatemala, benefitting from the U.S. Dominican Republic-Central America Free Trade Agreement (CAFTA-DR). Foreign direct investment (FDI) stock was USD 16.36 billion in 2018, a 1.5 percent increase over 2017.  Despite this, FDI flows fell 11.8% in 2018. Some of the activities that attracted most of the FDI flows in the last three years were commerce, banking and insurance, manufacturing, telecommunications, and electricity.

Despite steps to improve Guatemala’s investment climate, international companies choosing to invest in Guatemala face significant challenges.  Complex and confusing laws and regulations, inconsistent judicial decisions, bureaucratic impediments, and corruption continue to constitute practical barriers to investment.  Under CAFTA-DR obligations, the United States has raised concerns with the GoG regarding its enforcement of both its labor and environmental laws.

Since 2006, the UN-sponsored International Commission against Impunity in Guatemala (CICIG) has undertaken numerous high-profile official corruption investigations, leading to significant indictments.  In 2015, CICIG uncovered several cases of high-level official corruption. A case revealing a customs corruption scheme led to the resignations of the president and vice president. Since 2016, the public’s perception of the commitments of President Morales and Congress to anti-corruption efforts has eroded following allegations of corruption against Morales and members of his family.  President Morales announced he would not renew CICIG’s mandate on August 31, 2018. CICIG’s mandate is set to expire on September 3, 2019.

Table 1: Key Metrics and Rankings

Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2018 144 of 180 
World Bank’s Doing Business Report 2019 98 of 190
Global Innovation Index 2018 102 of 126 
U.S. FDI in partner country ($M USD, stock positions) 2017 $1,048 
World Bank GNI per capita 2017 $4,060 

9. Corruption

Bribery is illegal under Guatemala’s Penal Code.  However, corruption remains a serious problem that companies may encounter at many levels.  Guatemala scored 27 out of 100 points on Transparency International’s 2018 Corruption Perception Index, ranking it 144 out of 180 countries globally, and 29 out of 32 countries in the region.  The score dropped one point compared to the score observed in the 2017 report.

Investors find corruption especially pervasive in customs transactions, particularly at ports and borders away from the capital.  The Tax and Customs Authority (SAT) launched a customs modernization program in November 2006, which implemented an advanced electronic manifest system and resulted in the removal of many corrupt officials.  However, reports of corruption at major customs locations such as ports and border points remain prevalent. Since 2006, the UN-sponsored International Commission against Impunity in Guatemala (CICIG) undertook numerous high-profile official corruption investigations, leading to significant indictments.  Notably, CICIG unveiled a customs corruption scheme in 2015 that led to the resignations of the president and vice president.

In February 2018, the Public Ministry brought charges against former president Alvaro Colom and nine former members of his cabinet after a long-running investigation into fraud involving a bus system in Guatemala City known as Transurbano.  Prosecutors claimed Colom’s cabinet approved payments of USD 35 million in government funds to a consortium of private bus companies in charge of the Transurbano without proper legal oversight. According to prosecutors, almost one-third of those payments went to equipment that was never used.  On March 1, a judge found sufficient evidence to charge the defendants, and authorities placed Colom and the former members of his cabinet under house arrest.

In January 2018, the Public Ministry, accompanied by CICIG personnel, conducted raids as part of an investigation of the Brazilian company Odebrecht, which allegedly paid USD 17.9 million in bribes to local officials. The investigation led to charges against former presidential candidate Manuel Baldizon, who U.S. authorities detained in Florida on an international arrest warrant in September 2018 on separate money laundering and conspiracy charges. Prosecutors accused Baldizon of accepting at least USD 1.3 million in bribes from Odebrecht to help it win public works contracts. Authorities also sought the arrest of former communications minister Alejandro Sinibaldi, who allegedly distributed the bribes and embezzled at least nine million dollars. Sinibaldi remains a fugitive and was implicated in another case of bribery and influence peddling linked to former president Otto Perez Molina’s administration.

Guatemala’s Government Procurement Law requires most government purchases over USD 119,694 to be submitted for public competitive bidding.  Since March 2004, GoG entities are required to use Guatecompras, an Internet-based electronic procurement system to track GoG procurement processes.  GoG entities must also comply with GoG procurement commitments under CAFTA-DR. In August 2009, the Guatemalan Congress approved reforms to the Government Procurement Law, which simplified bidding procedures; eliminated the fee previously charged to receive bidding documents; and provided an additional opportunity for suppliers to raise objections over the bidding process.  Despite these reforms, large government procurements are often subject to appeals and injunctions based on claims of irregularities in the bidding process (e.g., documentation issues and lack of transparency). In November 2015, the Guatemalan Congress approved additional amendments to the Government Procurement Law that improved transparency of procurement processes by barring government contracts for financers of political campaigns and parties, members of Congress, other elected officials, government workers, and their family members.  The 2015 reforms expanded the scope of procurement oversight to include public trust funds and all institutions (including NGOs) executing public funds. The U.S. government continues to advocate for the use of open, fair, and transparent tenders in government procurement as well as procedures that comply with CAFTA-DR obligations, which would allow open participation by U.S. companies.

El Salvador, Guatemala, Honduras, and the United States agreed to specific commitments in a joint statement to the support of the Alliance for Prosperity on February 24, 2016.  The countries agreed to measures that will ensure more accountable, transparent, and effective public institutions; invest in human capital; provide greater opportunities to all citizens; and guarantee a safe and secure environment for their people, with a particular focus on the underlying conditions driving migration to the United States.  The statement follows progress on commitments agreed to by the same countries in March 2015.

Guatemala ratified the U.N. Convention against Corruption in November 2006, and the Inter-American Convention against Corruption in July 2001.  Guatemala is not a party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. In October 2012, the Guatemalan Congress approved an anti-corruption law that increases penalties for existing crimes and adds new crimes such as illicit enrichment, trafficking in influence, and illegal charging of commissions.

Resources to Report Corruption

Contact at government agencies responsible for combating corruption:

Public Ministry
23 Calle 0-22 Zona 1, Ciudad de Guatemala
Phone: (502) 2251-4105; (502) 2251-4219; (502) 2251-5327; (502) 2251-8480; (502) 2251-9225

Comptroller General’s Office
7a Avenida 7-32 Zona 13
Phone: (502) 2417-8700

Contact at “watchdog” organization:

Name: Accion Ciudadana (Guatemalan Chapter of Transparency International)
Address: Avenida Reforma 12-01 Zona 10, Edificio Reforma Montufar, Nivel 17, Oficina 1701
Phone: (502) 2388- 3400
Toll free to submit corruption complaints: 1-801-8111-011
Email: or

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