Título I. Disposiciones generales

This Law is declared to be of public interest and its purpose is to regulate the prevention and suppression of money laundering and terrorist financing, establishing a preventive administrative regime to be observed by the Obligated Persons; the functions and powers of the competent authorities; as well as the definition and sanction of the respective crimes.

This Law does not have as its purpose to target or suppress the informal economy, to criminalize the use of cash, or to be used for tax objectives.

For the purposes of this Law, the terms appearing herein shall be understood in the sense indicated below:

a)Close associates: Natural persons who satisfy at least one of the following criteria with respect to the Politically Exposed Person -PEP-: i) They appear as partners, shareholders, legal representatives, directors or common attorneys-in-fact in legal persons or legal structures; or, ii) They are final beneficiaries of the same entities.

b)Final beneficiary: Natural person who, ultimately and by any means or mechanism benefits from the business relationships, exercises effective control, or both, of legal persons or legal structures, whether through ownership, capital ownership or participation in a percentage equal to or greater than fifteen percent (≥ 15%); or by any other means directly or indirectly.

Ultimate ownership and control refer to situations in which the final beneficiary controls a legal person or legal structure directly or indirectly, alone or jointly, including through a chain of ownership or through decision-making.

c)Client: Natural person, legal person or legal structure with personality, with which a business relationship is established, maintained or has been maintained, to which any good, product or service is provided or rendered, on a regular or occasional basis, derived from the course of business or activities of the Obligated Person, regardless of how denominated.

d)State Contractor: Natural or legal person, national or foreign, that enters into a contract under any public procurement modality with any of the entities established in the law on the matter.

e)Customer due diligence: Process of analysis carried out in accordance with the set of rules, policies, procedures and controls, as well as any general or specific measure, that enables Obligated Persons to identify, know and verify the identity of their clients, of those acting on their behalf and that of the clients’ final beneficiaries, the purpose of the business relationship, as well as of the regular or occasional transactions or operations they carry out.

f)Legal structure: Form of integration or association of legal persons or individuals that constitute their organization and operation in accordance with the applicable laws of the Republic of Guatemala or of the country or jurisdiction under whose laws they are regulated, regardless of their nature, including trusts and foundations. It includes those that have not necessarily been formalized as legal persons.

g)Politically Exposed Person (PEP): Natural person who holds or has held prominent public positions in Guatemala or in another country, or that person who has or has been entrusted with a prominent function in an international organization. A person shall be considered a PEP from the moment he/she has legally taken possession of the office and for a subsequent period of one (1) year from the moment he/she ceases to exercise the functions and obligations for which he/she was initially qualified as a PEP. Consequently, upon expiry of the time limit of one (1) year, the person shall not be considered a PEP, without any prior procedure being required therefor.

PEP status is preventive in nature, and it shall not limit access to products and services.

For such purposes, the Superintendency of Banks, by means of a decision to be published in the month of January of each year in the Official Gazette and in another newspaper of wider circulation, shall establish in detail the prominent public positions that shall give rise to a person being considered a PEP. Said decision shall be based on a report issued by the Special Verification Intendency, which shall be updated periodically; in which case, said updates shall likewise be published in the Official Gazette and in another newspaper of wider circulation.

h)State Supplier: Natural or legal person, national or foreign, registered and prequalified in the General Register of State Acquisitions or in other similar or equivalent registers, with capacity to provide goods, supplies, works, services or other object of acquisition to the entities established in the law on the matter.

i)Virtual asset service provider: Natural or legal person who, on a regular basis, as an activity or course of business, provides to third parties one or more of the following services or operations: (i) exchange between virtual assets and legal tender; (ii) exchange between one or more types of virtual assets; (iii) transfer of virtual assets on behalf of a third party; (iv) custody, safekeeping or administration of virtual assets or of the instruments enabling control over them; (v) creation, offering or intermediation of financial instruments based on virtual assets, or the provision of services facilitating leverage, lending or yield generation on said assets; and, (vi) provision of critical infrastructure services or fiduciary management services that are determinative for the execution of operations with virtual assets on behalf of third parties, including the provision of external data or the delegated administration of rights inherent in the asset.

j)Business relationship: Any contractual, professional, commercial, or service relationship between the Obligated Person and the client.

k)Money laundering or other assets, financing of terrorism or financing of the proliferation of weapons of mass destruction risk: It is the contingency of loss, damage or other adverse consequence to which the Obligated Person is exposed, of being used directly or indirectly for activities of money laundering or other assets, financing of terrorism or financing of the proliferation of weapons of mass destruction. For purposes of this Law it may be denominated LD/FT/FPADM Risk.

l)Suspicion: Reasoned and documented assessment, based on objective and verifiable indicia, that generates reasonable grounds to consider a possible link of a transaction, whether or not concluded, with money laundering or financing of terrorism, without technical certainty or full evidence of the commission of an unlawful act being necessary.

m)Transaction: It is any financial or commercial operation involving the transfer, acquisition, deposit, withdrawal, exchange or administration of funds, property, securities or other assets, carried out by a client, or by a third party on his/her behalf or benefit, through Obligated Persons. Only those fulfilling the following shall be considered transactions:

i.Generate a verifiable record, whether physical or electronic;

ii. Involve the mobilization, modification or disposition of money, property, securities or assets; and,

iii. Fall within the products or services or regulated activities provided by Obligated Persons.

Excluded from this definition are informational inquiries, requests without effective execution and any other interaction that does not produce a verifiable legal or economic change with respect to the client’s assets.

n)Unusual transaction: It is a transaction, operation or act which by its amount, characteristics or frequency does not fit the client’s risk profile, without reasonable economic or legal justification.

o)Suspicious transaction: It is that unusual transaction, whether or not concluded, duly examined and documented by the Obligated Person, which, after analyzing it and carrying out customer due diligence measures, determines that it lacks evident economic or legal basis or that, despite having an appearance of legality, the Obligated Person suspects or has reasonable grounds to suspect that the funds derive from or are intended for criminal activity or are related to financing of terrorism.

p)Transfer of funds: Any banking or non-banking operation, carried out by an originator, by any means, including electronic means, for the purpose of making available a sum of money both within the national territory and outside it, to a person denominated beneficiary who may be the same originator.

q)Transfer of securities: Any operation carried out by an originator, by any means, including electronic means, for the purpose of making available documents, titles or certificates, shares, typical or atypical negotiable instruments, which incorporate or represent, as the case may be, property, credit or participation rights whether created, issued or negotiable through book entries, or financial instruments, physical or dematerialized, both within the national territory and outside it, to a person denominated beneficiary who may be the same originator.