Guatemala

In Guatemala, the following laws apply to anti-corruption, bribery and money laundering:

• Criminal Code (Código de Penal), including the set of reforms known as the Laws Against Corruption (Leyes Anti-Corrupción).
• Law Against Money Laundering (Ley Contra el Lavado de Dinero y Otros Activos).
• Law to Prevent the Financing of Terrorism (Ley de Prevención Contra el Financiamiento de Terrorismo).
• Law to Extinguish Property (Ley de Extinción de Dominio).

a) Employee representative bodies, such as a works council or union.

No, there is no local regulation applicable to this matter. Collective agreements are usually limited to economic and social issues. Provisions regarding internal investigations are usually not included in these types of agreements.

b) Data protection officer or data privacy authority.

There is currently no specific data privacy law in Guatemala. As such, companies do not have an obligation to appoint a data protection officer, and there is no data privacy authority or agency. Companies do not have an obligation to report internal investigations to these agents or authority, and such agents or authority do not have the right to participate in corporate investigations.

c) Other local authorities.

According to the Anti-Money Laundering Act (Ley Contra el Lavado de Dinero u Otros Activos), all entities subject to the supervision of the Superintendence of Banks (Superintendencia de Bancos, or SIB) have the obligation to report unusual or suspicious transactions, including information regarding the parties involved, to the Prosecutor’s Office (Ministerio Público) or the Special Verification Office (Intendencia de Verificación Especial – a division of SIB). This includes banks, financial groups, financial organizations, insurance agencies, credit card issuing agencies, offshore companies, factoring companies, and any other organization or financial institution that may be used as a tool for money laundering due to its everyday business operations.

d) What are the consequences in case of noncompliance?

Failure by an individual or legal entity subject to the supervision of SIB to comply with the obligation to inform the Prosecutor’s Office or the Special Verification Office of money laundering activity may result in a fine of US$10,000.00 to US$50,000.00 (or its equivalent in local currency). Moreover, this conduct could be considered hampering and interfering with an investigation, both of which are crimes under Guatemalan criminal law.

No, there is no duty to cooperate with an investigation. However, it is recommended that all interviews are documented in writing before an official administrative authority or by affidavit signed by the employee. Moreover, interviews should be carried out within regular working hours. Interview records should contain as many details and facts as possible.

Finally, since the interview is to be held voluntarily, the employee can stop or leave at any time.

Under circumstances where the employer is the owner of phones, computers, tablets, and other electronic devices used by the employee, these may be reviewed by the employer without prior authorization.

The statute of limitations for an employer to sanction employees is 20 business days from the day the company or employer learns of the event triggering the investigation. If the investigation will surpass the 20 business day term, the employer can make a written request to the Ministry of Labor to interrupt or stay the term for an additional 20 business days.

This request may be filed as many times as needed. During that period, the employer’s sanction rights are preserved and disciplinary measures may be applied for the duration of the new time limit, including dismissals with justified cause.

a) Conducting interviews?

As of the time of this guide, there is no specific data privacy law in Guatemala applicable to corporate interviews. However, the Guatemalan Constitutional Court has set certain precedents stating that the Free Access to Public Information Law (Ley de Acceso a la Información Pública, Decree 57-2008 of the Congress of the Republic of Guatemala) applies to parties that manage employee databases and/or obtain and have access to employee personal information.

This regulation applies to both individuals and legal entities, granting the following rights to the owner of the information: (a) information cannot be transferred without the prior written authorization of the owner; (b) information can only be used for the purpose for which it was obtained; (c) the owner of the information can request to have the information classified as confidential; and (d) the owner of the information can request updates and clarifications on the use of such information. There is an obligation to protect these rights if information is obtained through an interview.

Interviews are voluntary and can only be compelled by court order. Prior authorization is required for the transfer or disclosure of information obtained during the interview, including in cases where the interview was held by court order.

b) Reviewing emails?

The Constitution of Guatemala acknowledges the confidentiality of communications and states that information obtained without authorization or court order is not admissible in court. The Guatemalan Criminal Code provides that illegal access to communications is a crime punishable by fines of US$10 to US$ 150 and imprisonment of six months to three years. The maximum fine applies if the information obtained by the employee(s) pertains to official matters and/or if the information is published in any way.

If the company reviews employee e-mails under its domain, it could be argued that the company is the owner of such communications, and thus the penalties mentioned above will not apply. In addition, employees may authorize employers to review e-mails in their employment agreement or in writing in a separate document.

c) Collecting (electronic) documents and/or other information?

The same rights mentioned previously in section (a) apply. Therefore, if documents or information are collected, it is necessary to have prior written authorization from the owner of the information before such collection. Authorization may be granted by any written means, including electronic communications, as long as the grantor is properly identified.

d) Analyzing accounting and/or other mere business databases?

The rights mentioned previously in section (a) apply. However, this information may only be analyzed by its owner, the Tax Authority and by the District Attorney’s Office with an appropriate court order.

Currently, there are no legal requirements or procedures in this regard in Guatemala. Nonetheless, companies with compliance systems usually have internal procedures and protocols that must be followed when a whistleblower report triggers an investigation.

With regard to antitrust, Guatemala has not enacted an antitrust law as of the time of publication.

Therefore, there are no specific procedures to be considered in this respect. However, the Guatemalan Congress has discussed and debated several antitrust bill projects, which have not obtained definitive congressional approval as of the time of this guide. As a result, it is uncertain what effects, if any, this law could have on whistleblower reports until a final version of the legislation is adopted.

a) Receive written instructions?

No. However, it is advisable to inform the interviewee that the interview is voluntary and that he/she may stop or walk away at any time.

b) Be informed that he/she must not make statements that would mean any kind of self-incrimination?

No. However, it is advisable to inform the interviewee that the interview is voluntary and that he/she may stop or walk away at any time.

c) Be informed that the lawyer attending the interview is the lawyer for the company and not the lawyer for the interviewee (so-called Upjohn warning)?

No, however, it is recommended to do so.

d) Be informed that he/she has the right to have his/her lawyer attends?

No, it is not mandatory to be informed that a lawyer may be present at an interview for a corporate investigation.

e) Be informed that they have the right to have a representative from the works council (or other employee representative body) attend?

No. This is not required by law. However, a Collective Agreement may include this type of provision.

f) Be informed that data may be transferred across borders (in particular to the United States of America)?

No, although it is recommended.

g) Sign a data privacy waiver?

No.

h) Must the interviewee be informed that the information gathered might be passed on to third parties, including local or foreign authorities?

No. However, it is recommended.

i) Be informed that written notes will be taken?

No. However, it is recommended.

These interviews are commonly recorded by affidavits duly signed by the interviewee and a Public Notary, or in a deed, including notes and statements

made by the interviewee executed by those present during the interview.

Document hold notices are not regulated nor required under Guatemalan law. However, a criminal court can order the preservation of certain information or documents as a precautionary measure during a criminal trial.

Under Guatemalan law, an attorney must not reveal a client’s secret. Attorneys have a duty of loyalty towards their clients and are responsible for any damages or harm caused to the client for having disclosed confidential information. An attorney that is called as a witness and is asked to produce evidence may not disclose any information provided by the client that is confidential (privileged). Therefore, an attorney may claim the attorney-client privilege protection if he/she is called to disclose the findings of an internal investigation for which he/she was properly engaged and provided services as an attorney.

There are no precedents on this matter nor is it specifically regulated under Guatemalan laws. However, we are of the opinion that the relationship between in-house counsel and the company as employer-client qualifies as an attorney-client relationship and, as such, the privilege should apply.

a) To insurance companies (D&O insurance, etc.) to avoid losing insurance coverage.

Early notice to insurance companies in these cases is not legally required but may be contractually required in order to claim insurance coverage under the terms of an insurance policy.

b) To business partners (e.g., banks and creditors).

There is no legal obligation to give notice to business partners, but it may be required by contract.

c) To shareholders.

There is no legal obligation to give notice to shareholders, but it may be required by contract or the company’s articles of incorporation, bylaws or SHA.

d) To authorities.

There is no legal obligation to give notice to authorities.

Guatemalan law does not require any immediate measure to be taken once an internal investigation has started. However, if a crime is discovered during the course of an investigation or once it is finalized, the Guatemalan Criminal Code establishes the obligation to report such crime to the competent authorities. The sanction for failing to report criminal activity is a fine of up to US$125.00.

Regarding investigations carried out by the Prosecutor’s Office, there is no immediate measure neither required nor established by law. However, it is advisable to provide any evidence to authorities and to cooperate with ongoing investigations.

Regarding antitrust, as stated above, an antitrust bill, still pending to be enacted by the Guatemalan Congress and thus, the requirements of the final version of the law that may eventually be adopted by Congress are unknown at this time. In anticipation of the adoption of this antitrust legislation, many Guatemalan companies have begun to implement tailor-made antitrust compliance training programs for all executives, managers, and employees, especially those with sales and pricing responsibilities. Companies implementing such programs will be in a better position to detect the existence of anticompetitive conduct and, if necessary, to seek corporate leniency from antitrust authorities.

There are no steps that must be taken to comply with the rules of local prosecutors. However, local prosecutors would probably be concerned if they consider that an internal investigation affects, interferes, or hinders an ongoing or future criminal investigation.

Under the Guatemalan Criminal Code, a search warrant can only be issued by a criminal court at the request of the Prosecutor’s Office and will only be enforceable for the following 15 business days. The order must contain: (i) the name of the criminal court and a brief summary of the proceeding; (ii) the specific place to be searched; (iii) the authority that will carry out the search; (iv) the reason(s) for the search warrant; and (v) the date and signature of the judge issuing the order. The search may only take place from 6 am to 6 pm.

If those requirements are not fulfilled, any gathered evidence is not admissible in court.

Yes. The Prosecutor’s Office may enter into plea agreements with companies involved in criminal investigations to prevent prosecution of underlying crimes. Such agreement can only be made for crimes for which imprisonment does not exceed five years, non-intentional crimes, and for tax-related offenses.

Once the company has pled guilty and has paid any damages or taxes owed as a result of the criminal activity, the criminal court then accepts the agreement and the company is placed on probation for a period of two to five years.

Such arrangements are common in Guatemala, particularly in tax-related crimes.

Directors, officers or employees of a company are held responsible for the crimes of a company only if they participated in the alleged conduct and their participation made such crimes possible. In those cases, penalties can include fines, imprisonment, disgorgement and debarment. Additionally, a fine of US$10,000.00 to US$625,000.00 can be imposed on a company for each crime committed.

Employees, however, could be held liable for the civil responsibility and damages caused by the criminal act.

Tax-related felonies and corruption investigations are still a trend in Guatemala. There has been an important number of investigations regarding money laundering, tax fraud, and an increased number of corruption cases discovered within local public authorities.