Amicus Brief to the Republic of Guatemala in support of Beneficial Ownership Transparency (BOT)

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SUMMARY

The Vance Center for International Justice submitted an amicus brief urging the Constitutional Court of Guatemala to uphold the constitutionality of Article 9(d)(ii) of Governmental Agreement 133-2024, which requires disclosure of Beneficial Ownership Transparency (“BOT”) information in public procurement. The amicus explains that BOT is a cornerstone of anti-corruption frameworks, helping to prevent illicit financial flows, tax evasion, and conflicts of interest in public procurement. It argues that the rule does not violate constitutional rights to privacy or freedom of commerce, since the information remains confidential, disclosure is voluntary for entities contracting with the state, and the measure serves the overriding public interest of accountability and transparency. The brief further emphasizes that the provision is consistent with Guatemala’s binding international obligations and brings the country in line with regional and global best practices. It warns that suspending or invalidating the rule would undermine Guatemala’s recent transparency reforms, stall pending legislation, weaken institutional integrity, and damage the country’s credibility as a regional leader on anti-corruption. Conversely, upholding Article 9(d)(ii) would strengthen oversight of public funds, bolster public trust, and reinforce Guatemala’s commitment to fighting corruption and organized financial crime.

REPORT

INTRODUCTION
1 Beneficial Ownership Transparency (“BOT”) is a fundamental pillar of modern anti-corruption frameworks. It is also essential for preventing illicit financial flows and fighting tax evasion.

2 In the past year, Guatemala has made significant efforts to combat corruption and safeguard the integrity of public spending, including through strengthening transparency in the identification of the ultimate beneficial owners of legal entities in public procurement processes. Article 9(d)(ii) of Governmental Agreement 133-2024 is one such initiative. It is designed to ensure transparency in public contracting processes, reveal undisclosed affiliations and conflicting interests between public officials and private entities, and promote institutional oversight of public expenditures to deter corrupt practices.

3 Contrary to the assertions by the Petitioner, Article 9(d)(ii) does not contravene Articles 24 and 43 of the Guatemalan Constitution. As set forth below, this Court has consistently rejected such arguments in challenges to similar regulations regarding information transparency in state contracting. Article 9(d)(ii) of Governmental Agreement 133-2024 serves the public interest in transparency and oversight. It deters misuse of corporate vehicles to conceal improper relationships or illicit gains, guarantees the transparent and efficient use of state resources, and prevents the state from contracting with persons who use or invest assets originating from criminal acts. Given that information of shareholders and the individuals who effectively control legal entities is protected as it is considered confidential information, in accordance with Article 10 bis of the same agreement, Article 9(d)(ii) of Governmental Agreement 133-2024 is entirely consistent with the Guatemalan Constitution. It also directly advances Guatemala’s binding international commitments to anti-corruption and anti-money laundering standards under the Financial Action Task Force (“FATF”) Regulations, the United Nations Convention against Corruption (“UNCAC”), and the Inter-American Convention against Corruption (“IACAC”).

4 For the reasons detailed below, we respectfully request that the Constitutional Court of Guatemala (the “Court”) issue a ruling that Article 9(d)(ii) of Governmental Agreement 133-2024 is constitutional. To rule otherwise would be a grave setback to Guatemala’s transparency and integrity reforms and create a regressive precedent for anti-corruption efforts.