Financial Crime World

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Treasury: Remuneration and Bonuses Must Be Justified

In a move to ensure transparency and accountability, the government has introduced new regulations governing the remuneration and bonuses paid to board members and managers of banks. According to the rules, the total amount paid out during an accounting period cannot exceed 50% of the same figure for the preceding period.

  • If this threshold is breached, the bank must provide justification to the fund’s technical committee, which may consider the increase reasonable.
  • This move aims to prevent excessive remuneration and bonuses that could potentially compromise the stability of the financial system.

AML/KYC: Banks Must Comply with Anti-Money Laundering Regulations

Banks operating in Guatemala are required to adopt robust anti-money laundering (AML) and know-your-customer (KYC) measures to prevent the misuse of their products and services. This includes:

  • Establishing programs, rules, procedures, and controls to detect and report suspicious transactions.
  • Ensuring a high level of integrity among personnel.
  • Conducting permanent training on AML/CFT obligations.
  • Establishing an audit mechanism to verify compliance.
  • Formulating and implementing specific measures to know and identify clients.
  • Maintaining records of cash transactions exceeding $10,000 per day.

Depositor Protection: FOPA Guarantees Deposits Up to GTQ20,000

The Fund for Protection of Savings (FOPA) was established to guarantee deposits in the banking system. The scheme is administered by the Bank of Guatemala and funded through a combination of:

  • Mandatory monthly contributions from banks.
  • Yields from investments.
  • Fines.
  • Other sources.

FOPA covers deposits up to GTQ20,000 (approximately $2,500) per individual or entity with deposits in a private Guatemalan bank or a branch of a foreign bank. The coverage amount may be modified by the Monetary Board when necessary.

Bank Secrecy: Confidentiality Requirements

The Banks and Financial Groups Act establishes strict confidentiality requirements for banks and financial institutions. This includes:

  • Prohibiting members of the Monetary Board, authorities, officials, and employees from disclosing sensitive information unless authorized to do so by a competent court.
  • Considering violations of banking confidentiality as grave offenses, punishable by immediate removal and civil and criminal liabilities.

Prudential Regime: Capital, Liquidity, and Risk Control Requirements

Banks must maintain a minimum amount of patrimony in relation to their exposure to risks, as determined by the Monetary Board. This includes:

  • Maintaining a minimum amount of primary capital.
  • Managing liquidity risk.
  • Maintaining a computable patrimony.

These regulations aim to ensure the stability and integrity of the financial system by promoting transparency, accountability, and prudent risk management practices among banks operating in Guatemala.