Guatemala: A Hotbed for Financial Crime, Experts Warn
In a region notorious for corruption and money laundering, Guatemala stands out as a particularly challenging environment for financial crime prevention. The country’s outdated anti-money laundering (AML) laws, lack of political will to enforce them, and widespread corruption create a perfect storm for criminal activity.
The Risks are High
- Estimated annual losses to money laundering: $1.1 billion to $2.7 billion
- Extortion is one of the most significant drivers of this problem, with Guatemala’s extortion rate being the highest in Central America
- Powerful criminal organizations use violence and intimidation to extract bribes from businesses and individuals
Corruption Runs Deep
- Pervasive corruption affecting all levels of society
- Political interference and cronyism are rampant, with government officials often using their positions for personal gain
- The judiciary is compromised, with bribery and political influence undermining the rule of law
Weak AML Framework
- Outdated and unevenly implemented AML laws
- Lack of transparency and accountability in financial transactions
- Lawyers and notaries were only recently designated as obligated subjects under AML regulations
- Legal framework lacks beneficial ownership legislation and fintech regulation
Key Vulnerabilities
- Credit unions
- Vehicle sales
- Real estate
- NGOs
- Armored car services
- Banks
- Political campaigns
- Shell companies
- Construction
- Misinvoicing
- Supermarkets
- Gas stations
- Churches
Prevention is Key
- Businesses must be aware of the risks and take proactive steps to comply with AML regulations
- Conduct thorough customer due diligence
- Monitor transactions for suspicious activity
- Report any suspicious transactions to the authorities
Experts Offer Guidance
- VinciWorks, a leading provider of compliance solutions, has created a free guide to help businesses navigate the complex AML landscape in Latin America and the Caribbean
- The guide provides an overview of key challenges and issues, as well as a country-by-country assessment of AML risks and laws
- Download your free copy today to stay ahead of the curve on financial crime prevention in Guatemala