Guatemala Approves New Law to Combat Money Laundering and Terrorism Financing

Guatemala's Congress has enacted a new Comprehensive Law for the Prevention and Repression of Money Laundering or Other Assets and Terrorism Financing, replacing legislation that had been in place for over twenty years. This move aims to align the country's legal framework with more demanding international standards.

The new legislation consolidates rules for prevention, control, and investigation of these financial crimes into a single legal document. It broadens the scope of supervised sectors and activities, while also strengthening mechanisms for international cooperation, precautionary measures, asset seizure, and the prosecution of illicit financing.

A significant change involves expanding the list of entities and individuals obligated to report suspicious transactions. This now includes real estate agents, dealers of vehicles, jewelry, and art, as well as professionals such as lawyers, accountants, and auditors when they engage in specific transactions. The law also refines the treatment of Politically Exposed Persons (PEPs), limiting its application to close family members and direct associates.

This legislative update comes amid international pressure for Guatemala to bolster its financial controls and modernize regulations against evolving methods of illicit money movement. The country's financial system will be evaluated in 2027 by the Financial Action Task Force of Latin America (GAFILAT), where the updated legal framework is considered crucial to avoid scrutiny.

Money laundering, defined as the process of concealing the illicit origins of resources to integrate them into the formal economy, poses a significant threat to financial systems and public institutions. Under the new law, offenders face prison sentences ranging from six to 20 years, substantial fines, asset confiscation, account freezes, property embargoes, and asset forfeiture proceedings.