Guatemala and Enforcement of ForeignJudgements
– What we are going to discuss here is whether or not a creditor can come toGuatemala with a judgment from a foreign (Non Guatemala) court and enforce it or make it collectiblein Guatemala. We will look at the complications involved and the chances of success which areminiscule at best. I would like to point out that this is a topic not covered by our competition. There arecollection law firms that discuss international judgement collection but they are trying to sell their services. In spite of this I have never seen one collection law firm getting enthusiastic about collectingforeign judgements. It is best done through a treaty which Guatemala does not have with any country.We will discuss the matter in depth below.
What is a Judgement
– A judgement is a decision from a court based on a trial or it could be based ona summary judgment where there was not trial held because the odds of success for the defendant wereso small the court just goes ahead and railroads him. Sometimes this happens because the defendantcan not afford a legal defense. This is prevalent in the USA. In this discourse we are addressing judgments for money damages. A judgement can have other aspects to it like an eviction proceedingordering one to leave a house. It does not matter if it is a local court or a national court for thisdiscourse. This is because Guatemala has no treaties for enforcement of foreign judgments but more onthis later. The court would need to be contained in a country that Guatemala has diplomatic relationswith. Guatemala also insists that the country of the judgement allows Guatemala judgements to beenforced in that country.
What is Not a Judgement
– A tax lien is not a judgment. Tax liens can come from local or nationalgovernments. There is normally no trial preceding a tax lien. There was no judge, no jury, no due process, no right to defend yourself, no attorney present for the defendant, no right to examine your accuser, no chance of jury nullification, etc. This is a government administrative procedure that is notenforceable offshore in other countries. A tax lien would need to be reduced to a judgement by filing alawsuit in a court of appropriate jurisdiction in the home country. It would be like any other lawsuit.The defendant would have the right to present a defense and have a jury trail. Such a judgement wouldalso then be dischargeable in an ordinary bankruptcy case. Tax liens are practically never convertedinto a judgement for these reasons and of course the expense involved, time delay to go to trail and soforth.
Guatemala Has No Treaty for the Enforcement of Foreign Judgements
– It is good that Guatemalahas no such treaty. If a treaty like this was present the process of collecting a foreign judgment would be simplified. The judgment itself would be sufficient evidence to proceed with collection. WithGuatemala, foreign judgements are anything but a cost effective easy thing to collect on.
Guatemala Corporations and Foreign Judgements
– Before we get into the ins and outs of thenightmares associated with collecting foreign judgments in Guatemala lets look at the initial problem a judgment creditor would face. We always have our clients use corporations for asset protection. Thisapplies to banking, real estate, cars etc. We prefer to start with fresh corporations formed in the jurisdiction as long as they are anonymous bearer share corporations. Guatemala has very anonymous bearer share corporations. The names of the owners of the corporation do not appear in any publicregistry, database and the government does not know who owns the corporation. In places like the USAwhere the legal system has run amuck you will hear a lot of talk concerning piercing the corporate veil.This piercing the corporate veil tactic is nasty and effective in the USA. Try it in Guatemala and youwill fail and have one angry judge to deal with who will be less than appreciative of your attempts to