Guatemala Takes a Step Forward on Beneficial Ownership Transparency

Introduction

In a significant move towards greater financial transparency, Guatemala has committed to creating a centralised beneficial ownership (BO) register. This decision comes as part of broader efforts to improve the country’s business environment and tackle financial crime.

The Importance of Beneficial Ownership Transparency

• Beneficial ownership transparency is crucial in combating illicit financial flows, particularly in regions like Latin America and the Caribbean (LAC), where complex commercial arrangements have been used to hide the true origins of illicitly-earned money.
• The abuse of BO structures has facilitated the channeling of illegal campaign finance into the electoral funds of prominent politicians throughout the region.

Challenging Financial Secrecy in LAC Jurisdictions

• High levels of financial secrecy built into the legislation of some LAC jurisdictions have enabled these abuses.
• However, there are positive signs of changing attitudes towards BO transparency in the region.

Positive Developments in the Region

• Mexico has reaffirmed its commitment to creating a centralised BO register by signing up to the Beneficial Ownership Leadership Group convened by Open Ownership with the Open Government Partnership (OGP).
• The country has also committed to compiling and publishing data for firms operating in the extractive industries during 2020.

Guatemala’s Commitment to Tackling Corruption

• Guatemala’s decision to create a BO register is part of its broader push to tackle corruption, as reflected by the approval of a new national anti-corruption plan.
• By implementing a BO register, Guatemala joins eight other countries in the region that have committed to disclose beneficial ownership data in the extractives from 2020.

The Benefits of Implementing a BO Register

• The implementation of a BO register will not only enhance transparency but also help prevent illicit financial flows and promote good governance.
• Open Ownership, a global initiative, is working with governments in the LAC region to support the implementation of BO registers and provide technical assistance to ensure their success.

Conclusion

Guatemala’s commitment to beneficial ownership transparency is a significant step forward for the country and the region as a whole. By promoting greater financial transparency, Guatemala can help prevent corruption, promote economic growth, and enhance its reputation as a stable and secure investment destination.