In October 2010, a U.S. company operating in Guatemala filed a second lawsuit against the Guatemalan government with ICSID. The lawsuit seeks to settle a dispute against the government over electricity price regulation and the potential sale of the company. In 2013, the ICSID arbitration panel issued its verdict, awarding the company more than $21 million in damages in the form of electricity rates and $7.5 million to cover legal costs. In 2014, the Guatemalan government appealed to annul the 2013 arbitral award. On the same day, the Company also applied for the partial annulment of the award. The ICSID Ad Hoc Committee issued its decision on both invalidity proceedings in April 2016. The company then applied in October 2016 to resubmit the dispute over the sale to a new court. The new ICSID tribunal issued its decision on the rebid procedure for the sale of the company in May 2020, awarding the company more than $27.5 million in damages to cover the cash shortfall and pre-sale interest.
In June 2020, the company submitted a request to ICSID for a supplementary ruling on the award. The ICSID tribunal issued its decision on the complementary award in October 2020, stating that the Guatemalan government would have to pay the company $7.5 million of its initial arbitration costs, plus interest, beginning in December 2013. The Guatemalan government paid the company $37 million in November 2020, which is in line with the 2013 price. In February 2021, the Secretary-General of ICSID registered a request by the Republic of Guatemala for annulment of the award and informed the parties of the temporary suspension of enforcement of the award. The case has been pending before ICSID since April 2021. Tax, labor, environmental, health and safety laws do not directly impede investment in Guatemala. Bureaucratic hurdles are common for domestic and foreign businesses, including lengthy permitting and licensing processes, as well as clearing shipments through customs. Legal and regulatory systems can be confusing and administrative decisions are often not transparent. Laws and regulations often contain few explicit criteria for state administrators, resulting in ambiguous requirements that are inconsistently applied by different government agencies and courts.
Such inconsistencies can favour local businesses with better knowledge of the system as well as larger local networks. USAID works with government agencies to reduce organized crime and improve security in protected areas. Thirty-one percent of the country is in a protected area, and limited investment in government management or presence in these areas has created hotbeds for organized criminal activities ranging from drug trafficking and illegal mining to wildlife trafficking, illegal logging, and other illegal activities that threaten protected areas and the people who live there. The United States filed two separate complaints regarding the Guatemalan government`s compliance with CAFTA-DR obligations. For a labour case, the government established an arbitral tribunal under CAFTA-DR proceedings to review Guatemala`s compliance with its obligations to effectively enforce its labour laws. The arbitral tribunal held a hearing in June 2015 and rendered a ruling in favour of Guatemala in June 2017. With respect to an environmental case, the Secretariat for Environmental Affairs of CAFTA-DR closed its investigation in 2012 when the Guatemalan government presented evidence that the relevant facts of the case were being examined by the Guatemalan Constitutional Court. The Constitutional Court rejected the complaint in 2013 on procedural grounds. Guatemala ratified the United Nations 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 the Suppression of Bribery of Foreign Public Officials in International Business Transactions. In October 2012, Guatemala`s Congress passed an anti-corruption law that increases penalties for existing crimes and adds new crimes such as illicit enrichment, influence peddling, and illegal commission collection. USAID also protects livelihoods and economic activities by reducing vulnerability to natural disasters and threats such as soil erosion, landslides, forest fires, and other environmental threats.