Guatemala advanced in modernization of legislation to prevent and combat money laundering and the financing of terrorism (ML/FT) with the approval of Decree 15-2026 by the Congress of the Republic, on the night of June 2. Now the implementation and compliance phase of the new regulations will begin, which reduces the risk of the country being included in the “gray list.”
The legal framework made up of Decree 67-2001, Law against Money Laundering or Other Assets, and Decree 58-2005, Law to Prevent and Suppress the Financing of Terrorism, had lagged behind current international standards and the new typologies used by financial crime. Both regulations were repealed with the entry into force of the new law.
The Comprehensive Law for the Prevention and Repression of Money Laundering or Other Assets and the Financing of Terrorism, approved by Congress during the period of extraordinary sessions, brings together both regulations in a single legal body and It becomes one of the most important reforms in terms of financial supervision and regulation, by incorporating new control tools.
For the national financial sector, the challenge now is to guarantee compliance with the new legislation and Prepare for the transition to more complex and dynamic regulationswhich will require investments in technology, specialized training and re-engineering of risk management and due diligence processes.
Anti-money laundering law modernizes controls
The law will represent a paradigm shift in actions to prevent money laundering and the financing of terrorism (ML/FT), by migrating towards a risk-based approach (RBA) at three levels, incorporating the identification of the beneficial owner (UBO) and expanding the universe of regulated entities and obligated persons.
These new guidelines arrive 25 years after the current regulations came into force.
The reform responds to new typologies of financial crimes, such as the use of virtual assets and complex criminal structures that operate as solid transnational corporations.
In addition, it strengthens the tools to combat transnational organized crime from the perspective of ML/FT and confront gangs considered terrorist groups.
Both the preventive administrative regime and the repressive criminal regime are established in a single regulatory body.
In administrative matters, The law creates a preventive regime applicable to obligated persons.
In addition, it classifies and punishes the crimes of money laundering and financing of terrorism.
The law will represent a paradigm shift in actions to prevent money laundering and the financing of terrorism (ML/FT), by migrating towards a risk-based approach (RBA) at three levels, incorporating the identification of the beneficial owner (UBO) and expanding the universe of regulated entities and obligated persons.
At the institutional level, it creates the National Council for the Coordination of Efforts against Money Laundering or Other Assets and the Financing of Terrorism (Conclaft) as a coordination body.
Likewise, it strengthens the functions of the Superintendence of Banks (SIB) and the Special Verification Intendency (IVE), the latter in its capacity as Financial Intelligence Unit (UIF).
On the other hand, it reforms various legal bodies, including the Penal Code, the Commercial Code, the Notarial Code, the Law against Organized Crime and the Private Security Law.
Anti-money laundering law moves away from the gray list
On the other hand, the new law responds to the recommendations of the Financial Action Task Force (FATF), which during the evaluation carried out in 2016 identified several deficiencies. In 2018, the Latin American Financial Action Task Force (Gafilat) also published an intensified monitoring report on Guatemala.
The next evaluation, scheduled for 2027, requires that documentation and implementation mechanisms be prepared as of this year. Therefore, Updating the law was essential to prevent Guatemala from being included in the “gray list.” situation that would have had economic and image repercussions for the country.
Among the possible consequences were a lower investment attraction, difficulties for commercial transactions, the increase in the cost of credit operations, the loss of banking correspondents, obstacles to reaching the investment grade granted by risk rating agencies, and effects on the receipt of family remittances.
Law incorporates control over virtual assets
The validity of the status of politically exposed person (PEP) will be one year. After this period has elapsed since the cessation of the position, the person will no longer be considered a PEP without the need for prior processing.
The Superintendency of Banks (SIB) must publish a resolution with the first detailed list of public positions considered PEP.
The regulations establish three categories of politically exposed persons: those supervised by the SIB, unsupervised financial persons, and commercial and service persons.
As for the final beneficiary, the participation threshold will be 15%. Whoever owns a participation equal to or greater than that percentage in a legal entity or legal structure will be considered the final beneficiary.
Recognized control mechanisms include ownership or ownership of capital; direct or indirect, individual or joint control; the complex chains of ownership and decision-making capacity within the structure.
Public limited companies must update their share register.
For virtual asset service providers (PSAV), the law incorporates them as obligated persons.
Activities included include the exchange of virtual assets for legal tender; the transfer of virtual assets on behalf of third parties; the custody, conservation and administration of virtual assets, among others.
The law establishes three levels of due diligence for clients: simplified, standard and enhanced.
- Simplified due diligence applies when the risk of money laundering and terrorist financing (ML/FT) is low and proven, therefore requiring fewer documentary requirements. It may not be applied when the transaction is unusual or the risk is high.
- Standard due diligence consists of identifying and verifying the client and the beneficial owner with an interest of 15% or more. In addition, it requires understanding the purpose of the business relationship, assigning a risk profile and maintaining constant monitoring.
- Enhanced due diligence is applied when there is a high risk, in cases related to PEP, absence of physical presence of the client or cash transactions and transfers that exceed established thresholds.
With information from the Banking Association of Guatemala (ABG) and the Chamber of Finance of Guatemala (CFG)