FATF Status

Guatemala is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The last Mutual Evaluation Report follow-up relating to the implementation of anti-money laundering and counter-terrorist financing standards in Guatemala was undertaken in 2018. According to that Evaluation, Guatemala was deemed Compliant for 16 and Largely Compliant for 15 of the FATF 40 Recommendations.​ It was deemed Highly effective for 0 and Substantially Effective for 4 of the Effectiveness  & Technical Compliance ratings.

​US Department of State Money Laundering assessment (INCSR)

Guatemala is categorised by the US State Department as a Country/Jurisdiction of Primary Concern in respect of Money Laundering and Financial Crimes.

Overview

Guatemala remains a key transit route for narcotics to the United States and cash returning to South America, creating challenges for the government in combating corruption, money laundering, and financial crimes related to narcotics trafficking.  The Public Ministry (MP) and Constitutional Court experienced tumultuous changes in 2021 that raise international concern about the state of democratic institutions and the rule of law in Guatemala.  The lack of judicial will as well as interference by Attorney General María Consuelo Porras (named by the United

States to the Corrupt and Undemocratic Actors List, also known as the “Engel List,” in September 2021 under Section 353 of the United States-Northern Triangle Enhanced Engagement Act for obstructing investigations into acts of corruption) hinders the MP in effectively prosecuting corruption cases – including those with a money laundering and narcotrafficking nexus.  The government’s failure to act against U.S.-designated officials, while pursuing dubious charges against those in the justice sector who have pursued or presided over cases of high-level corruption, has tarnished its credibility. 

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           23

World Governance Indicator – Control of Corruption             11

Corruption represents a major obstacle for businesses operating or planning to invest in Guatemala. Businesses must contend with high risks in almost all sectors. The Penal Code (in Spanish) criminalizes passive and active bribery, the bribery of foreign officials, embezzlement and extortion. The government generally implements the relevant laws effectively. However, government officials engage in corruption with impunity, and recent years have witnessed several corruption cases, the biggest of which ended in the impeachment and imprisonment of former President Otto Pérez Molina. Facilitation payments are prohibited by law. Bribery and gifts are a widespread practice in Guatemala. For further information - GAN Integrity Business Anti-Corruption Portal

Guatemala has the largest economy in Central America, with a $ 94.7 billion gross domestic product (GDP) in 2022. The economy grew by an estimated 4 percent in 2022 following an 8 percent rebound in 2021. Year-on-year inflation reached 9.24 percent in 2022 mostly due to the increase in international energy and food prices attributable to Russia’s invasion of Ukraine. Remittances, mostly from the United States, increased by 17.9 percent in 2022 and were equivalent to 19 percent of GDP. The United States is Guatemala’s most important economic partner. The Guatemalan government continues to make efforts to enhance competitiveness, promote investment opportunities, and work on legislative reforms aimed at supporting economic growth. More than 200 U.S. and other foreign firms have active investments in Guatemala, benefitting from the U.S. Dominican Republic-Central America Free Trade Agreement (CAFTA-DR). Foreign direct investment (FDI) stock was $22.5 billion in 2022, a 5.3 percent increase over 2021. FDI flows dropped by 61 percent in 2022 mostly due to the extraordinary 2021 FDI inflow through the purchase of outstanding shares of a local company by a foreign telecommunications company. Some of the activities that attracted most of the FDI flows in the last three years were information and communications, financial and insurance activities, manufacturing, commerce and vehicle repair, water, electricity, and sanitation services.

Despite steps to improve Guatemala’s investment climate, international companies choosing to invest in Guatemala face significant challenges. Complex laws and regulations, inconsistent judicial decisions, bureaucratic impediments, and corruption continue to impede investment. Citing Guatemala’s CAFTA-DR obligations, the United States has raised concerns with the Guatemalan government regarding its enforcement of both its labor and environmental laws.

Guatemala’s Climate Change Framework Law established the groundwork for Guatemala’s Low Emission Development Strategy (LEDS) and is designed to align Guatemala’s emissions and development targets with national planning documents in six sectors: energy, transportation, industry, land use, agriculture, and waste management. In November 2020, the Guatemala government endorsed the LEDS as the country’s official strategy for climate change mitigation.

As part of the government’s efforts to promote economic recovery during and after the COVID-19 pandemic, the Ministry of Economy (MINECO) began implementing an economic recovery plan in September 2020, which focused on recovering lost jobs and generating new jobs, attracting new strategic investment, and promoting consumption of Guatemalan goods and services locally and globally.

Country Links

Bank of Guatemala

Superintendencia de Bancos