Financial Crime World

Guatemala Struggles to Combat Financial Crime Amid Corruption and Weak Institutions

Overview

Guatemala, a Central American nation, is facing significant challenges in preventing financial crime due to corruption, weak institutions, and outdated laws.

Challenges in Preventing Financial Crime

Corruption

  • Guatemala has been ranked as one of the most corrupt countries in Latin America.
  • Corruption affects all levels of society, from government officials to ordinary citizens.

Extortion

  • Extortion is a major problem in Guatemala, with an estimated $400 million lost annually to this crime.
  • This makes it the highest rate in Central America.

Weak Institutions

  • The judiciary is seen as highly corrupt, with bribery being a common practice in the guild responsible for nominating judges.
  • Political interference has hindered anti-corruption efforts, with President Morales expelling CICIG, an international body tasked with investigating serious crimes, in 2019.

Economic Inequality

  • Less than half of the population has a bank account, and around 20% do not have identification.
  • Economic inequality is widespread, with 91% of the population living in poverty.

Money Laundering in Guatemala

  • An estimated $1.1 billion to $2.7 billion is laundered every year in Guatemala.
  • The country’s AML policy summary highlights its weaknesses, including a lack of political will, weak institutions, and an outdated legal framework.

Key Vulnerabilities in Guatemala’s Economy

  • Credit unions
  • Vehicle sales
  • Real estate
  • NGOs
  • Armored car services

Channels Used to Launder Money in Guatemala

  • Banks
  • Political campaigns
  • Shell companies
  • Construction
  • Infrastructure
  • Misinvoicing
  • Supermarkets
  • Gas stations
  • Churches

Support from the US

The US has a significant role in supporting Guatemala’s anti-corruption efforts. However, aid was cut during the Trump administration, which harmed anti-corruption efforts.

For More Information

Contact VinciWorks at info@vinciworks.com or visit our website at vinciworks.com for more information on AML compliance and financial crime prevention in Latin America and the Caribbean.