Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Horacio Manuel Cartes Jara (Cartes), the former President of Paraguay, and Hugo Adalberto Velazquez Moreno (Velazquez), the current Vice President, for their involvement in the rampant corruption that undermines democratic institutions in Paraguay. OFAC is also designating Tabacos USA Inc., Bebidas USA Inc., Dominicana Acquisition S.A., and Frigorifico Chajha S.A.E., for being owned or controlled by Cartes. These individuals and entities are being designated pursuant to Executive Order (E.O.) 13818, which builds upon and implements the Global Magnitsky Human Rights Accountability Act and targets perpetrators of serious human rights abuse and corruption around the world. Today’s action follows the visa restrictions imposed on Cartes and Velazquez in 2022 under Section 7031(c) of the Department of State, Foreign Operations, and Related Programs Appropriations Act, 2022, supporting a whole-of-government approach to combatting corruption and illicit finance. Cartes engaged in corruption before, during, and after his term as President of Paraguay.
Cartes’ political career was founded on and continues to rely on corrupt means for success. He joined the Colorado Party in 2009, providing financial investments and incentives to induce the party to eliminate its 10-year length-of-affiliation requirement to enable him to run as the party’s presidential nominee. Cartes paid party members up to $10,000 each to support his candidacy ahead of the 2013 elections. While President of Paraguay, Cartes continued his corrupt schemes, including making cash payments to officials in exchange for their loyalty and support. He maintained his grip on policymaking through monthly cash bribes paid out to loyal legislators; payments ranged from $5,000 to $50,000 per member. Cartes ensured the effectiveness of this scheme by terminating payments to legislators who failed to carry out his orders.
In 2017, Cartes pledged $1 million of his own wealth to buy the votes of legislators to support his unsuccessful push for constitutional reform to allow him to run for a second term in 2018. Cartes continued to influence legislative activities after leaving office, targeting political opponents, and bribing legislators to direct votes in his interest, with top supporters receiving as much as $50,000 monthly.
Cartes is being designated pursuant to E.O. 13818 for being a foreign person who is a current or former government official, or a person acting for or on behalf of such an official, who is responsible for or complicit in, or has directly or indirectly engaged in corruption, including the misappropriation of state assets, the expropriation of private assets for personal gain, corruption related to government contracts or the extraction of natural resources, or bribery.
On December 23, 2016, the President signed the Global Magnitsky Human Rights Accountability Act (Pub. L. 114-328, Title XII, Subtitle F) (the “Act”) into law. The Act authorized the President to impose targeted sanctions on any foreign person the President determines is, among other things, responsible for extrajudicial killings, torture, or other gross violations of internationally recognized human rights, or a government official, or a senior associate of such an official, responsible for, or complicit in, ordering, controlling, or otherwise directing, acts of significant corruption.
On December 20, 2017, the President, invoking the authority of, inter alia, the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) (IEEPA), issued Executive Order 13818 (82 FR 60839, December 26, 2017) (E.O. 13818), effective at 12:01 a.m. eastern standard time on December 21, 2017.
In E.O. 13818, the President determined that serious human rights abuse and corruption around the world constitute an unusual and extraordinary threat to the national security, foreign policy, and economy of the United States and declared a national emergency to deal with that threat.
OFAC is issuing the Global Magnitsky Sanctions Regulations, 31 CFR part 583 (the “Regulations”), to implement the Act and E.O. 13818, pursuant to authorities delegated to the Secretary of the Treasury in E.O. 13818. A copy of E.O. 13818 appears in appendix A to this part.
