|
|
Sanctions:
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists:
As a recognised offshore finance jurisdiction this country may fall
under various country offshore jurisdiction blacklists.
____________________________________________________
US State Department Money Laundering Report - 2012:
Guatemala is not considered a regional financial center. It
continues to be a transshipment route for South American
cocaine and heroin destined for the United States and for
returning cash to South America. Smuggling of the precursors to
methamphetamine is also a problem. Reports suggest the
narcotics trade is increasingly linked to arms trafficking.
Historically weak law enforcement and judiciary systems coupled
with endemic corruption and increasing organized crime activity
contribute to a favorable climate for significant money laundering
in Guatemala. According to law enforcement agencies, narcotics
trafficking and corruption are the primary sources of money
laundered in Guatemala; however, the laundering of proceeds
from other illicit activities, such as human trafficking, firearms,
contraband, kidnapping, tax evasion, and vehicle theft, is
substantial. There is no indication of terrorist financing activities.
Guatemala’s geographic location makes it an ideal haven for
transnational organized crime groups, including human and drug
trafficking organizations. The Central America Four Agreement
between El Salvador, Guatemala, Honduras, and Nicaragua
allows for free movement of the citizens of these countries across
their respective borders without passing through immigration or
customs inspection. As such, the agreement represents a
vulnerability to each country for the cross-border movement of
contraband and illicit proceeds of crime.
There is a category of “offshore” banks in Guatemala in which the
money of the customers (usually Guatemalans with average
deposits of $100,000) is legally considered to be deposited in the
foreign country where the bank’s head office is based. In 2010,
there were seven “offshore” entities, with head offices in Panama,
the Bahamas and Puerto Rico. These “offshore” banks are
subject to the same AML/CFT regulations as any local bank.
Guatemala has 17 active free trade zones (FTZs) and six more
are supposed to start operations soon. They are mainly used to
import duty-free goods utilized in the production of products for
exportation. There are no known cases or allegations that indicate
the FTZs are hubs of money laundering or drug trafficking. There
are no reported hawala or other money or value transfer services
operating in Guatemala. A significant number of remittances are
transferred through banks and appear to pose little risk for money
laundering.
Casinos are not legal in Guatemala, however, a number of
casinos, games of chance and video lotteries operate, both
onshore and offshore. Unsupervised gaming activity represents a
significant money laundering risk.
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: YES
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: YES
KYC covered entities: Banks; finance and leasing companies;
credit card cooperatives, issuers, or payment agents; stock
brokers; insurance companies; money remitters and exchanges;
pawnbrokers; notaries and accountants; tax advisors and lawyers;
casinos, raffles and games of chance; dealers in precious metals
and stones, motor vehicles, and art and antiquities; and real
estate agents
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 421 in 2011 (as of
October 31, 2011)
Number of CTRs received and time frame: 5,502,434 in 2011 (as
of September 30, 2011)
STR covered entities: Banks; finance and leasing companies;
credit card cooperatives, issuers, or payment agents; stock
brokers; insurance companies; money remitters and exchanges;
pawnbrokers; notaries and accountants; tax advisors and lawyers;
casinos, raffles and games of chance; dealers in precious metals
and stones, motor vehicles, and art and antiquities; and real
estate agents
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: 59 in 2011
Convictions: Ten people in eight cases in 2011
Records exchange mechanism:
With U.S.: MLAT: YES Other mechanism: YES
With other governments/jurisdictions: YES
Guatemala is a member of the Caribbean Financial Action Task
Force (CFATF), a Financial Action Task Force (FATF)-style
regional body. Its most recent mutual evaluation can be found
here: http://www.cfatf-gafic.
org/downloadables/mer/Guatemala_3rd_Round_MER_(Final)
_English.pdf
Enforcement and implementation issues and comments:
There are relatively few convictions for money laundering, most of
which are for the illegal transport of cash. The inadequate number
of staff at the FIU and the limited capacity of law enforcement
officials may hamper the ability of the authorities to prosecute
more cases.
In December 2009, former President Alfonso Portillo was indicted
on one count of conspiracy to commit money laundering in the
United States. On August 26, 2011, Guatemala’s Constitutional
Court unanimously upheld the U.S. request to extradite former
President Portillo on that charge. The Public Ministry is still
awaiting the outcome of its appeal of Portillo’s May 9 acquittal on
embezzlement charges in Guatemala, and the extradition remains
pending based on the outcome of that case.
Law enforcement agencies report that money laundering
continued to increase during the year, especially by groups of air
travelers heading to countries such as Panama with slightly less
than the amount of the Guatemalan reporting requirement
($10,000), and a large number of small deposits in banks along
the Guatemalan border with Mexico. A new law regarding asset
forfeitures took effect in June 2011 and allows Guatemalan
authorities to seize cash used in structuring transactions and
transfer it to the state without first having to obtain a criminal
conviction against the courier. The same law also prevents new
businesses from issuing bearer shares of stock. The law requires
any existing business with bearer shares to convert the shares to
nominative by June 2013, but it is not clear what the
consequences will be for failure to do so.
In October 2010, Guatemalan monetary authorities approved a
regulation to establish limits for cash deposits in foreign currency,
notably requiring more information and bank certification for
transactions totaling over $3,000 per month. According to law
enforcement authorities, purchases of foreign currency declined
34% during the first eight months of 2011, which they attribute to
the new regulation.
The government should either enforce the law with regard to
casinos or work to regulate them under the AML law, as are
lotteries and raffles. Attempts by the government to enforce
requirements have not been successful. Lotteries and raffles are
subject to local jurisdiction licensing but are not subject to
AML/CFT supervision.
____________________________________________________
US State Dept Narcotics Report 2012 (introduction):
Guatemala’s location between the Andean drug producing
countries and the U.S. market made it an ideal transshipment
point easily accessible to drug-trafficking organizations (DTO).
The United States estimates that approximately 95 percent of the
cocaine leaving South America for the United States moves
through the Mexico and Central America corridor. Of this, an
increasing amount – nearly 80 percent – stops first in a Central
American country before onward shipment to Mexico. As a result
of the country’s weak public institutions, pervasive corruption, and
vast under-governed area along its borders, the United States
estimates that approximately 15 percent of the primary flow of
cocaine entering the United States transited Guatemala. In
addition to marijuana for domestic consumption, Guatemala
produced opium poppy for export.
The United States and Guatemala partnered to strengthen
Guatemalan institutions and develop technical capacity, but the
security situation continued to deteriorate. Mexican DTOs,
including the Sinaloa cartel and Los Zetas drug organization,
continued to conduct operations in the country. Guatemala was
beset with transnational crime, including trafficking in persons and
arms, and an upsurge in powerful gangs who engaged in armed
robbery, murder-for-hire, and extortion activities.
Guatemala’s tax collection rates, among the lowest in the
hemisphere, limited the government’s ability to dedicate the
necessary resources to confront citizen security challenges. Drug
seizures and eradication of opium poppy increased in 2011.
Impunity rates persisted at 96.5 percent for murder, with similarly
high numbers for other crimes, including organized crime. While
the number of homicides declined from 2010 levels, Guatemala’s
per capita murder rate roughly doubled over the last ten years.
Guatemala is a party to the 1988 UN Drug Convention.
For Full report, click here
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 2)
Guatemala is a source, transit, and destination country for men,
women and children subjected to sex trafficking and forced labor.
Guatemalan women and children are found in forced and child
prostitution within the country, as well as in Mexico and the United
States. Boys from Guatemala and other Central American
countries are found in commercial sexual exploitation, particularly
in Guatemala City and on Guatemala’s borders with Honduras
and Mexico. Guatemalan men, women, and children are subjected
to forced labor within the country, often in agriculture or domestic
service, and particularly near the Mexican border and in the
highland region. Guatemalan men, women, and children also are
found in conditions of forced labor in Mexico and the United
States in agriculture and the garment industry. Indigenous
Guatemalans are particularly vulnerable to labor exploitation. In
the border area with Mexico, Guatemalan children are exploited
for forced begging on streets and forced labor in municipal
dumps. Guatemala is a destination country for women and girls
from El Salvador, Honduras, Colombia, and Nicaragua, in forced
and child prostitution. Migrants from Central American countries
transit through Guatemala en route to Mexico and the United
States; some may become human trafficking victims. Child sex
tourism is prevalent in certain tourist areas such as Antigua,
Puerto Barrios, and around Lake Atitlan, and child sex tourists
predominately come from Canada, Germany, Spain, and the
United States. According to NGOs and government officials,
organized crime networks continue to be involved in some cases
of human trafficking.
The Government of Guatemala does not fully comply with the
minimum standards for the elimination of trafficking; however, it is
making significant efforts to do so. During the reporting period,
Guatemalan officials maintained anti-trafficking law enforcement
efforts and inaugurated a specialized shelter for adult trafficking
victims. Guatemalan authorities continued to partner with civil
society to develop and implement protocols on victim protections,
and increased funding for the secretariat responsible for
coordinating government anti-trafficking efforts. Investigative
units, however, remained under-funded, many judges and law
enforcement officials were poorly informed about human
trafficking, and official complicity continued to impede anti-
trafficking efforts.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2009
U.S. assistance supported Guatemala’s anti-money laundering,
anti-corruption, and border security efforts and Guatemala
cooperated with the United States in investigating potential
terrorism leads. The U.S. Department of Defense continued to
train the Guatemalan military’s counterterrorist unit. In addition to
threats posed by transnational narcotics organizations,
Guatemala was a major alien smuggling route from Central and
South America, which made it a potential transit point for terrorists
seeking to gain access to the United States. Corruption, an
ineffective criminal justice system, and a lack of resources have
limited Guatemala’s ability to combat transnational crime,
especially in remote parts of the country. Guatemala’s borders
are porous and lack adequate coverage by police or military
personnel.
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
Intendencia de Verificación Especial (IVE) Special Verification
Intendency
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists:
As a recognised offshore finance jurisdiction this country may fall
under various country offshore jurisdiction blacklists.
____________________________________________________
US State Department Money Laundering Report - 2012:
Guatemala is not considered a regional financial center. It
continues to be a transshipment route for South American
cocaine and heroin destined for the United States and for
returning cash to South America. Smuggling of the precursors to
methamphetamine is also a problem. Reports suggest the
narcotics trade is increasingly linked to arms trafficking.
Historically weak law enforcement and judiciary systems coupled
with endemic corruption and increasing organized crime activity
contribute to a favorable climate for significant money laundering
in Guatemala. According to law enforcement agencies, narcotics
trafficking and corruption are the primary sources of money
laundered in Guatemala; however, the laundering of proceeds
from other illicit activities, such as human trafficking, firearms,
contraband, kidnapping, tax evasion, and vehicle theft, is
substantial. There is no indication of terrorist financing activities.
Guatemala’s geographic location makes it an ideal haven for
transnational organized crime groups, including human and drug
trafficking organizations. The Central America Four Agreement
between El Salvador, Guatemala, Honduras, and Nicaragua
allows for free movement of the citizens of these countries across
their respective borders without passing through immigration or
customs inspection. As such, the agreement represents a
vulnerability to each country for the cross-border movement of
contraband and illicit proceeds of crime.
There is a category of “offshore” banks in Guatemala in which the
money of the customers (usually Guatemalans with average
deposits of $100,000) is legally considered to be deposited in the
foreign country where the bank’s head office is based. In 2010,
there were seven “offshore” entities, with head offices in Panama,
the Bahamas and Puerto Rico. These “offshore” banks are
subject to the same AML/CFT regulations as any local bank.
Guatemala has 17 active free trade zones (FTZs) and six more
are supposed to start operations soon. They are mainly used to
import duty-free goods utilized in the production of products for
exportation. There are no known cases or allegations that indicate
the FTZs are hubs of money laundering or drug trafficking. There
are no reported hawala or other money or value transfer services
operating in Guatemala. A significant number of remittances are
transferred through banks and appear to pose little risk for money
laundering.
Casinos are not legal in Guatemala, however, a number of
casinos, games of chance and video lotteries operate, both
onshore and offshore. Unsupervised gaming activity represents a
significant money laundering risk.
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: YES
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES
Domestic: YES
KYC covered entities: Banks; finance and leasing companies;
credit card cooperatives, issuers, or payment agents; stock
brokers; insurance companies; money remitters and exchanges;
pawnbrokers; notaries and accountants; tax advisors and lawyers;
casinos, raffles and games of chance; dealers in precious metals
and stones, motor vehicles, and art and antiquities; and real
estate agents
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: 421 in 2011 (as of
October 31, 2011)
Number of CTRs received and time frame: 5,502,434 in 2011 (as
of September 30, 2011)
STR covered entities: Banks; finance and leasing companies;
credit card cooperatives, issuers, or payment agents; stock
brokers; insurance companies; money remitters and exchanges;
pawnbrokers; notaries and accountants; tax advisors and lawyers;
casinos, raffles and games of chance; dealers in precious metals
and stones, motor vehicles, and art and antiquities; and real
estate agents
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: 59 in 2011
Convictions: Ten people in eight cases in 2011
Records exchange mechanism:
With U.S.: MLAT: YES Other mechanism: YES
With other governments/jurisdictions: YES
Guatemala is a member of the Caribbean Financial Action Task
Force (CFATF), a Financial Action Task Force (FATF)-style
regional body. Its most recent mutual evaluation can be found
here: http://www.cfatf-gafic.
org/downloadables/mer/Guatemala_3rd_Round_MER_(Final)
_English.pdf
Enforcement and implementation issues and comments:
There are relatively few convictions for money laundering, most of
which are for the illegal transport of cash. The inadequate number
of staff at the FIU and the limited capacity of law enforcement
officials may hamper the ability of the authorities to prosecute
more cases.
In December 2009, former President Alfonso Portillo was indicted
on one count of conspiracy to commit money laundering in the
United States. On August 26, 2011, Guatemala’s Constitutional
Court unanimously upheld the U.S. request to extradite former
President Portillo on that charge. The Public Ministry is still
awaiting the outcome of its appeal of Portillo’s May 9 acquittal on
embezzlement charges in Guatemala, and the extradition remains
pending based on the outcome of that case.
Law enforcement agencies report that money laundering
continued to increase during the year, especially by groups of air
travelers heading to countries such as Panama with slightly less
than the amount of the Guatemalan reporting requirement
($10,000), and a large number of small deposits in banks along
the Guatemalan border with Mexico. A new law regarding asset
forfeitures took effect in June 2011 and allows Guatemalan
authorities to seize cash used in structuring transactions and
transfer it to the state without first having to obtain a criminal
conviction against the courier. The same law also prevents new
businesses from issuing bearer shares of stock. The law requires
any existing business with bearer shares to convert the shares to
nominative by June 2013, but it is not clear what the
consequences will be for failure to do so.
In October 2010, Guatemalan monetary authorities approved a
regulation to establish limits for cash deposits in foreign currency,
notably requiring more information and bank certification for
transactions totaling over $3,000 per month. According to law
enforcement authorities, purchases of foreign currency declined
34% during the first eight months of 2011, which they attribute to
the new regulation.
The government should either enforce the law with regard to
casinos or work to regulate them under the AML law, as are
lotteries and raffles. Attempts by the government to enforce
requirements have not been successful. Lotteries and raffles are
subject to local jurisdiction licensing but are not subject to
AML/CFT supervision.
____________________________________________________
US State Dept Narcotics Report 2012 (introduction):
Guatemala’s location between the Andean drug producing
countries and the U.S. market made it an ideal transshipment
point easily accessible to drug-trafficking organizations (DTO).
The United States estimates that approximately 95 percent of the
cocaine leaving South America for the United States moves
through the Mexico and Central America corridor. Of this, an
increasing amount – nearly 80 percent – stops first in a Central
American country before onward shipment to Mexico. As a result
of the country’s weak public institutions, pervasive corruption, and
vast under-governed area along its borders, the United States
estimates that approximately 15 percent of the primary flow of
cocaine entering the United States transited Guatemala. In
addition to marijuana for domestic consumption, Guatemala
produced opium poppy for export.
The United States and Guatemala partnered to strengthen
Guatemalan institutions and develop technical capacity, but the
security situation continued to deteriorate. Mexican DTOs,
including the Sinaloa cartel and Los Zetas drug organization,
continued to conduct operations in the country. Guatemala was
beset with transnational crime, including trafficking in persons and
arms, and an upsurge in powerful gangs who engaged in armed
robbery, murder-for-hire, and extortion activities.
Guatemala’s tax collection rates, among the lowest in the
hemisphere, limited the government’s ability to dedicate the
necessary resources to confront citizen security challenges. Drug
seizures and eradication of opium poppy increased in 2011.
Impunity rates persisted at 96.5 percent for murder, with similarly
high numbers for other crimes, including organized crime. While
the number of homicides declined from 2010 levels, Guatemala’s
per capita murder rate roughly doubled over the last ten years.
Guatemala is a party to the 1988 UN Drug Convention.
For Full report, click here
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 2)
Guatemala is a source, transit, and destination country for men,
women and children subjected to sex trafficking and forced labor.
Guatemalan women and children are found in forced and child
prostitution within the country, as well as in Mexico and the United
States. Boys from Guatemala and other Central American
countries are found in commercial sexual exploitation, particularly
in Guatemala City and on Guatemala’s borders with Honduras
and Mexico. Guatemalan men, women, and children are subjected
to forced labor within the country, often in agriculture or domestic
service, and particularly near the Mexican border and in the
highland region. Guatemalan men, women, and children also are
found in conditions of forced labor in Mexico and the United
States in agriculture and the garment industry. Indigenous
Guatemalans are particularly vulnerable to labor exploitation. In
the border area with Mexico, Guatemalan children are exploited
for forced begging on streets and forced labor in municipal
dumps. Guatemala is a destination country for women and girls
from El Salvador, Honduras, Colombia, and Nicaragua, in forced
and child prostitution. Migrants from Central American countries
transit through Guatemala en route to Mexico and the United
States; some may become human trafficking victims. Child sex
tourism is prevalent in certain tourist areas such as Antigua,
Puerto Barrios, and around Lake Atitlan, and child sex tourists
predominately come from Canada, Germany, Spain, and the
United States. According to NGOs and government officials,
organized crime networks continue to be involved in some cases
of human trafficking.
The Government of Guatemala does not fully comply with the
minimum standards for the elimination of trafficking; however, it is
making significant efforts to do so. During the reporting period,
Guatemalan officials maintained anti-trafficking law enforcement
efforts and inaugurated a specialized shelter for adult trafficking
victims. Guatemalan authorities continued to partner with civil
society to develop and implement protocols on victim protections,
and increased funding for the secretariat responsible for
coordinating government anti-trafficking efforts. Investigative
units, however, remained under-funded, many judges and law
enforcement officials were poorly informed about human
trafficking, and official complicity continued to impede anti-
trafficking efforts.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2009
U.S. assistance supported Guatemala’s anti-money laundering,
anti-corruption, and border security efforts and Guatemala
cooperated with the United States in investigating potential
terrorism leads. The U.S. Department of Defense continued to
train the Guatemalan military’s counterterrorist unit. In addition to
threats posed by transnational narcotics organizations,
Guatemala was a major alien smuggling route from Central and
South America, which made it a potential transit point for terrorists
seeking to gain access to the United States. Corruption, an
ineffective criminal justice system, and a lack of resources have
limited Guatemala’s ability to combat transnational crime,
especially in remote parts of the country. Guatemala’s borders
are porous and lack adequate coverage by police or military
personnel.
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
Intendencia de Verificación Especial (IVE) Special Verification
Intendency
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| GUATEMALA |
| KnowYourCountry |
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*Please note that FATF deems that a country has significant aml deficiencies if
any of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated
either Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
any of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated
either Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
|
|
| Further Tables |
|
| Last Updated: 16 April 2012 |