From sanctioned to cleared - Cartes’ diplomatic rebound

The United States has lifted sanctions against Paraguay’s former president Horacio Manuel Cartes Jara, reversing measures imposed in 2023 over allegations of widespread corruption. The decision was announced by the U.S. Treasury’s Office of Foreign Assets Control (OFAC), which said the sanctions were no longer aligned with Washington’s foreign policy or national security priorities.

Cartes, who led Paraguay from 2013 to 2018, was previously placed on the U.S. “specially designated nationals” list alongside several of his companies. The U.S. had accused him of engaging in systemic corruption, including bribery of officials and obstruction of transnational crime investigations, and alleged he continued to exert political influence after leaving office. However, OFAC stated the measures were lifted after a policy review determined they were “no longer necessary to promote behavioral change.” It remains unclear whether the travel ban previously imposed on Cartes will also be revoked.

In a statement, Cartes welcomed the decision, saying he received the news “with humility and satisfaction,” and thanked the U.S. government for what he described as an “impartial and just review.” Paraguay’s current president Santiago Peña, a protégé of Cartes, reaffirmed his government’s commitment to strengthening cooperation with Washington.

Born on July 5, 1956, in Asunción, Cartes rose from a businessman to one of Paraguay’s most powerful political figures. Before entering politics, he built a vast commercial empire, Grupo Cartes, spanning tobacco, banking, beverages, agribusiness, and media, and gained national visibility as president of Club Libertad, one of Paraguay’s top football teams. In 2013, he won the presidency under the Colorado Party, returning the dominant party to power after a brief period of opposition rule. His government prioritized economic growth, infrastructure, and foreign investment, but was criticized for maintaining entrenched patronage systems and failing to curb corruption. In 2017, his push to amend the constitution to allow presidential re-election sparked nationwide protests and raised concerns over democratic backsliding. After leaving office, Cartes remained a central figure in Paraguayan politics, becoming president of the Colorado Party in 2023 and acting as the political mentor to Peña.

Despite repeated allegations of money laundering, tobacco smuggling, and influence peddling most notably from U.S. authorities, Cartes has consistently denied wrongdoing and has not been convicted of any crime. His fortune, estimated at nearly $500 million, makes him one of Paraguay’s richest individuals.

The lifting of sanctions could bring multiple benefits to Cartes. Financially, he can now freely access international banking systems, conduct transactions, and attract foreign partners, enabling expansion of his business empire. Politically, it strengthens his influence within the Colorado Party and allows him to fund party activities and support allies without international restrictions. The removal from OFAC’s list also improves his international reputation, signaling that U.S. authorities no longer view him as a major corruption risk. Strategically, it may reduce legal pressures in other jurisdictions and enhance his ability to engage diplomatically. Domestically, Cartes can portray the decision as a vindication, further consolidating his party’s internal power.

Cartes’s enduring political clout continues to shape Paraguay’s domestic and foreign policy. Under Peña’s leadership, Paraguay has maintained strong ties with Taiwan, resisted Beijing’s diplomatic pressure, and aligned with U.S. positions on global issues, including support for Israel amid the ongoing Gaza conflict. The sanctions lift could ease tensions between Washington and Asunción, while reinforcing the influence of Cartes and the Colorado Party in Paraguay’s political landscape.