Financial Crime World

Guatemala’s Banking Sector Faces Uphill Battle Against Money Laundering

Guatemala’s financial institutions are struggling to keep pace with increasingly sophisticated money laundering schemes, fueled by corruption and political interference. In a region notorious for its lax anti-money laundering (AML) regulations, Guatemala stands out as a particular challenge.

Challenges in AML Compliance

  • Uneven AML rules create an environment conducive to money laundering.
  • Outdated laws and weak institutional capacity exacerbate the problem.
  • Corruption is pervasive, with 11 of the past 13 ministers of communication and housing accused or convicted of serious corruption.
  • Lack of political will to implement effective AML measures.
  • Weak institutions unable to enforce laws effectively.
  • Outdated legal framework fails to address modern money laundering techniques.

Main Money Laundering Laws in Guatemala

  • Law 67-2001: Foundation AML law
  • Law 58-2005: Terrorist financing law
  • Law 55-2010: Asset forfeiture and proof of legally acquired assets
  • Law 58-2020: Obligation for lawyers and notaries to comply with AML regulations

Key Vulnerabilities in Guatemala’s Economy

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

Channels Used for Money Laundering

  • Banks
  • Political campaigns
  • Shell companies
  • Construction and infrastructure projects
  • Misinvoicing
  • Supermarkets
  • Gas stations
  • Churches

Complex Web of Facilitators

  • Bankers
  • Lawyers
  • Notaries
  • Politicians
  • Political operatives

Judicial System Corruption

  • Guild responsible for nominating judges known for bribery.

US Support and Opportunities for Improvement

  • The US has played a significant role in supporting Guatemala’s anti-money laundering efforts.
  • Despite challenges, there are still opportunities for businesses to strengthen their AML compliance and support the country’s fight against financial crime.

To learn more about the key AML challenges and laws in Guatemala, download VinciWorks’ free guide to compliance. Download Guide