Greater financial control in the US threatens the flow of remittances to Guatemala

Under the argument of mitigating risks in the US financial system, President Donald Trump ordered new measures that may impact shipments of family remittances by exercising greater financial controls.

The provision will target risks associated with low-amount cross-border transfers, the use of peer-to-peer payment platforms, and patterns of repetitive withdrawals or deposits in small amounts.

To do this, the United States Department of the Treasury must create the rule within a period of 60 days. “Cross-border transfers of low amounts of funds have been used to facilitate or commit the financing of terrorism, drug trafficking, human trafficking and other illegal activities,” indicates the executive order, dated May 19, but made public yesterday.

Additionally, within 90 days, the Secretary of the Treasury, in consultation with applicable federal functional financial regulators, will propose changes to the Bank Secrecy Act enforcement regulations to strengthen risk-based customer due diligence requirements for covered financial institutions.

This is the second measure adopted by the current administration in the US, since the application of a tax on remittances is in force, which means a control measure.

Separately, in Guatemala, initiative 6593, “Comprehensive Law against Money Laundering or Other Assets and the Financing of Terrorism,” is in final discussion, which would also put family remittances at risk if progress is not made.

In the first four months of the year, US$8,431 million have been received through transfers, which is equivalent to about Q65 billion, with a growth rate of 10.5%; However, these new provisions generate uncertainty in the chain. In 2025, remittances represented 20.7% of gross domestic product (GDP), according to official records.

Increase financial controls

Given the new provisions, in Guatemala there is a reading on the possible implications in the medium and long term.

The first thing is to specify that the White House document does not speak directly about remittances nor does it announce immediate restrictions on family transfers to Guatemala, explained José Estuardo Córdova, executive director of the Guatemalan Chamber of Finance (CFG).

What it does, he said, is instruct the U.S. Treasury Department to issue, within 60 days, a formal notice to financial institutions about risks associated with low-amount cross-border transfers, peer-to-peer payment platforms, and repetitive patterns of small deposits or withdrawals.

“From Guatemala’s perspective, this means that the international financial system is paying more attention to the traceability of the origin and destination of funds. Legitimate family remittances are not the problem; the problem is when certain channels or operating patterns can be used to hide illicit activities, evasion, human trafficking, drug trafficking and other crimes,” Córdova clarified.

He emphasized that the US Treasury’s own money laundering risk assessment identifies vulnerabilities in P2P payments and other systems when they are used improperly.

“It is important to emphasize: for legitimate family remittances these measures are not a problem,” he noted.

Remittances could migrate to informality

In this context, Guillermo Díaz Castellanos, coordinator of the Research Institute in Sociohumanist Sciences of the Rafael Landívar University (URL), indicated that the provisions of this executive order imply greater surveillance over undocumented migrants and the sending of remittances.

“Migrants must report the individual taxpayer identification number (ITIN) to open accounts or obtain credit. There will be more requirements and surveillance for sending remittances; in some cases it may mean not having access to said service,” he stated.

When projecting what may happen in the short term, Díaz Castellanos assured that the measure implies a greater sending of remittances while the new rule comes into force, in 60 days.

He added that, in the medium term, it may imply a reduction in sending through banking means and greater use of informal or non-banking mechanisms, applications or parcels, for example.

Given that banks will perceive greater risk, they will charge higher commissions for sending remittances, Díaz Castellanos anticipated.

They ask to align with international standards

Córdova believes that it would not be correct to affirm that in 60 days there will be automatic restrictions or generalized limits on remittances.

“What is expected is that the Treasury Department issues a formal notice to its financial institutions and that, based on that notice, they can strengthen their internal controls, their monitoring processes and their due diligence criteria.”

In any case, Guatemala must avoid being left behind.

“If the country does not modernize its legislation – with the approval of initiative 6593 – and does not align itself with international standards, the risk increases that foreign financial institutions apply stricter controls due to the perception of country risk. In this scenario, legitimate remittances could face greater reviews, longer times, additional costs or even operational limitations,” he warned.

Migrants fear new restrictions

For Mario Arturo García, independent analyst on remittances and migration issues, this regulatory situation will once again generate “great uncertainty” and concern among Guatemalan migrants.

At the moment, the analyst explained, the executive order does not establish any type of immediate action, but in 60 and 90 days the competent authorities in the US must issue the necessary regulations to prevent the undocumented sector from continuing to be potentially considered money laundering.

So, banks, in anticipating these actions, will have to implement due diligence for the undocumented, which will reduce attention and there could be an absence of financial services in the US for undocumented people, he exemplified.

In the case of remittances, he added that they are shipments that do not necessarily have to have financial products to carry out the shipments.

Restrictions would affect digital shipments

The analyst considers that, within this new control scheme, remittance shipments will be the most affected.

He explained that, currently, most remitters do basic due diligence from zero to US$1 thousand, with a telephone number, physical address and document with a photograph. Some also apply for a US Tax Identification Number (TIN).

He added that up to US$1 thousand, basic due diligence is applied.

Above US$3,000, it is required to establish the origin of the income, justify the salaries for the shipments to be made or, if you have a business in the US, it must be registered, but the order does not modify these measures.

García added that a significant group of Guatemalan migrants already used digital media and applications that had electronic transfers or credit or debit cards as payment methods, which automated the transfer and lowered the cost of the operation.

However, now they will not be able to use these mechanisms under the argument that undocumented immigrants should not have financial products, as it is a sector prone to money laundering.

“Migrants will no longer be able to access credit, credit cards or use their savings, as it is a sector susceptible to money laundering,” said García.

They ask to use formal channels

The CFG director called for calm and the use of formal channels, since sending and receiving legitimate remittances is not the problem.

“The important thing is to avoid informal intermediaries, not provide accounts, keep receipts and respond clearly when a financial entity requests information,” he reiterated.

He added that it is not about alarming families who receive remittances; On the contrary, it is about protecting them.

If Guatemala does not update its anti-money laundering legislation, legitimate remittances will face more controls, higher costs, delays or restrictions. Initiative 6593 seeks precisely to avoid this scenario and protect the formal channels through which the money of millions of Guatemalan families flows.

García said that expanded due diligence is now expected, with greater controls, and that a remittance could take one or two weeks to become effective, which would imply problems in the stability of the households that receive that income.

People who send remittances could begin to use other methods, such as cryptocurrencies, boosted after the implementation of the remittance tax.