Cartes was the majority shareholder of Tabesa until January 2023, when the U.S. authorities sanctioned him for corruption, and after which he sold his shares for nearly US$120 million.
According to the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), Tabesa is being punished because despite warnings not to do so, it continued to to pay Cartes millions of dollars, violating the sanctions imposed on him and his former deputy, Hugo Velázquez.
As a result, the company is now barred from operating in the U.S., where it had been exporting millions of cigarettes annually. Additionally, any individuals, companies, or entities that continue to engage in commercial activities with Tabesa may also face sanctions.
The company was sanctioned under Executive Order 13818, which is based on the Global Magnitsky Human Rights Accountability Act aimed at combating global human rights abuses and corruption.
Tabesa, a major player in Cartes’ business empire in Paraguay, has been under scrutiny for allegedly smuggling cigarettes into other Latin American markets.
Reacting to the latest sanctions, José Ortiz, the general manager of Tabesa and a close associate of Cartes, accused OFAC of “abuse of power,” alleging that the sanctions are part of a “trade war” between the U.S. and Cartes.
Ortiz also stated that despite the sanctions, which have frozen the company’s bank accounts, Tabesa will continue its operations using cash transactions only.
