Guatemala -- Sanctions Compliance Regulatory Overview

Guatemala has not yet established a specific regulatory framework for cryptocurrencies, nor does it have its own crypto-specific sanctions lists. The Banco de Guatemala (Banguat), the country's central bank, issued a press release in 2014 stating that cryptocurrencies are not legal tender and are not regulated by Banguat.

Despite the lack of dedicated crypto regulations, any entity or individual operating with virtual assets in Guatemala is subject to the country's existing Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) laws, and critically, must comply with international sanctions regimes due to the global nature of financial transactions and the interconnectedness of the financial system.

Here's a breakdown of the applicable sanctions and restrictions:

I. International Sanctions Compliance Requirements for VASPs in Guatemala

Even without specific national crypto regulations, Virtual Asset Service Providers (VASPs) operating in or from Guatemala, or serving Guatemalan clients, are effectively bound by international sanctions. This is primarily due to:

1. Guatemala's adherence to international AML/CFT standards: Guatemala is a member of the Financial Action Task Force of Latin America (GAFILAT), a FATF-style regional body, and is therefore expected to implement FATF recommendations. FATF Recommendation 15 explicitly applies AML/CFT obligations, including sanctions compliance, to VASPs.
2. Global financial interconnectedness: Transactions involving cryptocurrencies often touch upon jurisdictions or financial institutions that are directly subject to OFAC, EU, or UN sanctions. Non-compliance can lead to loss of correspondent banking relationships, secondary sanctions, and reputational damage.
3. Nature of the regulated entities: If a VASP is part of a larger financial group or relies on traditional financial institutions for fiat on/off-ramps, those institutions' compliance obligations will extend to the VASP.

A. OFAC (Office of Foreign Assets Control - United States)

OFAC sanctions are extraterritorial and highly relevant for any VASP with a U.S. nexus. This includes:

• U.S. persons (citizens, residents, entities incorporated in the U.S. or its territories).
• Any transaction routed through the U.S. financial system, even if the parties are non-U.S.
• Entities dealing in U.S. dollars.
• Non-U.S. entities that facilitate significant transactions for or on behalf of sanctioned persons, or engage in activities that could trigger secondary sanctions.

Compliance Requirements for VASPs:

• Sanctioned Entity Screening: VASPs must screen all customers (KYC/CDD) and counterparties against OFAC's Specially Designated Nationals (SDN) and Blocked Persons List, the Consolidated Sanctions List (CSL), and other relevant lists (e.g., Non-SDN Palestinian Legislative Council List, Sectoral Sanctions Identifications List, etc.).
• Prohibition on Transactions: VASPs are prohibited from engaging in any transactions involving property or interests in property of individuals or entities on OFAC's lists, or those associated with comprehensively sanctioned jurisdictions (e.g., Cuba, Iran, North Korea, Syria).
• Geographic Restrictions: Strict prohibitions apply to transactions involving comprehensively sanctioned countries or regions.
• Reporting Obligations: U.S. persons, and in some cases non-U.S. persons, have reporting obligations for blocked property.

Legal References:

• OFAC Sanctions Programs and Information: https://home.treasury.gov/policy-issues/office-of-foreign-assets-control-sanctions-programs-and-information
• OFAC FAQs on Virtual Currency: https://home.treasury.gov/policy-issues/financial-sanctions/faqs/topic/1601

B. EU (European Union) Sanctions

EU sanctions apply to:

• EU nationals and entities incorporated or constituted under the law of an EU Member State.
• Operations within the territory of the EU.
• Aircraft and vessels under the jurisdiction of an EU Member State.

Compliance Requirements for VASPs:

• Sanctioned Entity Screening: VASPs must screen against the EU Sanctions Map, which consolidates all EU sanctions regimes and lists of designated persons, groups, and entities.
• Asset Freeze and Travel Ban: Prohibition on making funds or economic resources available, directly or indirectly, to designated persons/entities.
• Specific Sectoral Sanctions: Adherence to prohibitions related to specific sectors (e.g., arms embargoes, financial restrictions on certain entities).
• Geographic Restrictions: Compliance with sanctions against specific countries or regimes.

Legal References:

• EU Sanctions Map: https://www.sanctionsmap.eu/
• Consolidated Financial Sanctions List (EU): https://data.europa.eu/data/datasets/consolidated-list-of-persons-groups-and-entities-subject-to-eu-financial-sanctions?locale=en

C. UN (United Nations) Sanctions

UN sanctions, imposed by the UN Security Council, are binding on all UN Member States, including Guatemala. Member States are required to implement these sanctions into their national law.

Compliance Requirements for VASPs:

• Sanctioned Entity Screening: Screening against the UN Security Council Consolidated List, which includes individuals and entities subject to asset freezes, travel bans, and arms embargoes.
• Immediate Implementation: Member States are expected to implement UN sanctions without delay.

Legal References:

• UN Security Council Sanctions Committees: https://www.un.org/securitycouncil/sanctions/information
• UN Security Council Consolidated List: https://www.un.org/securitycouncil/content/un-sc-consolidated-list

II. Guatemalan Country-Specific AML/CFT Framework (Applying to Crypto by Extension)

While Guatemala lacks specific crypto regulations, VASPs are expected to comply with the general AML/CFT framework applicable to financial services. The Intendencia de Verificación Especial (IVE), part of the Superintendencia de Bancos (SIB), is Guatemala's Financial Intelligence Unit (FIU) and is responsible for enforcing AML/CFT laws.

A. Applicable Guatemalan Laws

1. Ley Contra el Lavado de Dinero u Otros Activos (Decree 67-2001): This law establishes the framework for preventing and prosecuting money laundering. It defines "supervised entities" which, by interpretation and international standards (FATF), should include VASPs, particularly those with a fiat gateway.
2. Ley Contra el Financiamiento del Terrorismo (Decree 58-2005): This law complements the AML framework by specifically targeting the financing of terrorism.

B. VASP Compliance Obligations under Guatemalan AML/CFT (by interpretation)

Given Guatemala's commitment to FATF standards, and the IVE's role, VASPs are expected to implement:

• Customer Due Diligence (CDD/KYC): Identifying and verifying the identity of customers, understanding the nature of their business, and assessing risks.
• Sanctioned Entity Screening: Screening customers and transactions against OFAC, EU, UN, and any other relevant domestic (e.g., PEP lists, if maintained by IVE) or international sanctions lists.
• Suspicious Transaction Reporting (STR): Reporting any suspicious transactions to the IVE. This would include transactions linked to sanctioned entities or high-risk jurisdictions.
• Record-Keeping: Maintaining records of customer identification data, transaction data, and STRs for a specified period (typically 5 years).
• Internal Controls: Establishing and maintaining adequate internal controls, policies, and procedures to prevent money laundering and terrorist financing.
• Risk Assessment: Conducting regular risk assessments to identify and mitigate ML/FT risks, including those related to sanctions.
• "Travel Rule" (indirectly): While not explicitly codified for crypto in Guatemala, FATF Recommendation 16 (Travel Rule) requires VASPs to obtain and transmit originator and beneficiary information for virtual asset transfers. This is a critical component for sanctions screening in cross-border crypto transactions.

C. Country-Specific Sanctions Lists for Crypto

Guatemala currently does NOT have any country-specific sanctions lists that apply exclusively or specifically to cryptocurrency.

• The IVE's focus is on AML/CFT, and any lists they might maintain would typically be related to politically exposed persons (PEPs) or individuals/entities subject to local criminal investigations related to money laundering or terrorism financing, which are usually derived from or aligned with international lists and law enforcement efforts.
• For sanctions compliance, entities in Guatemala must rely on the international lists from OFAC, EU, and UN.

D. Geographic Restrictions

As Guatemala does not have its own crypto-specific sanctions, geographic restrictions primarily stem from the international sanctions regimes:

• Comprehensively Sanctioned Jurisdictions: VASPs must prohibit transactions with or involvement in countries subject to comprehensive OFAC sanctions (e.g., Cuba, Iran, North Korea, Syria, regions of Ukraine like Crimea, Donetsk, Luhansk).
• High-Risk Jurisdictions: Even outside of explicit sanctions, FATF identifies high-risk jurisdictions. VASPs should implement enhanced due diligence for transactions involving these areas.

III. Penalties for Violations in Guatemala

Violations of Guatemala's AML/CFT laws (Decree 67-2001 and Decree 58-2005) carry significant penalties, which would apply to VASPs by extension if they are found to be facilitating money laundering or terrorist financing. These penalties can include:

• Fines: Substantial monetary penalties for institutions.
• Imprisonment: Individuals involved in money laundering or terrorist financing activities can face lengthy prison sentences (e.g., 6 to 20 years for money laundering).
• Asset Forfeiture: Assets involved in or derived from illicit activities can be seized and forfeited.
• Administrative Sanctions: The SIB/IVE can impose administrative penalties, including warnings, suspension of operations, or revocation of licenses for regulated entities.

Legal References (Guatemalan):

• Ley Contra el Lavado de Dinero u Otros Activos (Decree 67-2001):
  • Text (Spanish): While a direct government URL is hard to find for such older laws, it can often be found on legal databases or sites like this: https://www.sibenlinea.gob.gt/sites/default/files/documentos_y_archivos/Decreto_67-2001_con_sus_reformas.pdf (This is an SIB link for the consolidated text, which is good).
• Ley Contra el Financiamiento del Terrorismo (Decree 58-2005):
  • Text (Spanish): https://www.sibenlinea.gob.gt/sites/default/files/documentos_y_archivos/Decreto_58-2005_ley_contra_el_financiamiento_del_terrorismo.pdf (Another SIB link for the consolidated text).
• Comunicado de Prensa No. 04-2014 del Banco de Guatemala (on cryptocurrencies):
  • Text (Spanish): https://banguat.gob.gt/sites/default/files/banguat/inc/comunicados/2014/comun04-2014.pdf

Disclaimer: This information is for general informational purposes only and does not constitute legal advice. Compliance requirements are complex and constantly evolving. Entities operating in the cryptocurrency space in Guatemala should consult with legal professionals specializing in AML/CFT and sanctions compliance to ensure full adherence to all applicable laws and regulations.