In 2001, Guatemala adopted the Act Against the Laundering of Money or other Assets with the purpose of preventing, controlling, supervising, and sanctioning the crime of money laundering. Moreover, in 2005 the Congress of Guatemala approved the Act to Prevent and Punish the Financing of Terrorism.

Although both, money laundering and the financing of terrorism, are typified as crimes, the bills that regulate them were enacted sixteen and twenty years ago respectively. The vehicles used to commit both crimes has evolved, using other currently non-regulated economic activities, new mechanisms, technologies, structures, and, in general, higher levels of sophistication, which for obvious reasons were not foreseen in the abovementioned bills, making them in many cases outdated and inapplicable.

In November 2020, a new bill to update and unify the Act Against the Laundering of Money or other Assets and Act to Prevent and Punish the Financing of Terrorism was presented before Congress,^[1] aiming to incorporate to Guatemalan legislation the most recent practices and international standards set forth in the Financial Action Task Force (FATF) Recommendations^[2] (e.g. assessing risks and applying a risk-based approach, the money laundering crime typified as including the widest range of predicate offences, confiscation and provisional measures, typifying the terrorist financing as not only by financing terrorists acts but also the financing of terrorist organizations and individual terrorists even in the absence of a link to a specific terrorist act or acts).

The proposed bill provides several definitions, among which is the Due Diligence that the Obliged Persons has to follow in order to establish an adequate financial-economic profile for its clients and final beneficiaries or owners, which will allow them to determine the level of risk that they represent and the existence of possible unusual or suspicious transactions. To this end, the bill classifies the Obliged Persons under the light of the financial, commercial, or provisions of services that they carry out, imposing them a series of obligations and prohibitions according to said classification. The Obliged Persons have to register as such, complying with the requisites in the form and term that the Regulations will establish. This classification of Obliged Persons, and the list of persons that are considered Obliged is so broad that many entities, institutions, and individuals will have to register and comply with said obligations and restrain from said prohibitions.

Moreover, in order to update the typification of the Financing of Terrorism and Money Laundering crimes, the proposed bill defines the Transfer of Funds and Transfer of Securities, as any operation carried out by an ordering party, through any means, including electronic means, with the purpose of making available an amount of money, in the first, or physical or dematerialized Securities, in the latter, locally or abroad. Because the previous definition and the typification of the Financing of Terrorism and Money Laundering crimes are in broad terms, following the FAFT Recommendations, individuals and entities will have to be very cautious when carrying its operations, in particular the financial ones, following all the procedures that will be established in the Act Regulations.

Moreover, because the terms of the list of persons that are considered as Obliged Persons are broadly defined, it is possible that companies that offer services of digital wallet, or services related to cryptocurrencies, may be considered as Obliged Persons, and as consequence, required to comply with the reporting obligations and to refrain from the prohibitions that the bill establishes. Digital wallets and digital currencies are currently not regulated in Guatemalan Law, and this bill proposal comes to put them under the spotlight for further regulation.

The bill no. 5820 was presented before congress on November 11, 2020, and afterwards it was sent to the Economy and Foreign Trade Commission and to the Public Finance and Currency Commission, for its review and comments. Once both commissions issue their corresponding analysis, the bill will be discussed in Congress on three different days, and then voted on.