Financial Crime World

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Brazil’s Financial Intelligence Units Crack Down on Money Laundering and Terrorism Financing

In order to strengthen its financial sector and prevent illegal activities, Brazil has established two key financial intelligence units: the Council for Financial Activities Control (COAF) and the Central Bank of Brazil (BCB). These entities work together to regulate financial institutions, detect suspicious transactions, and combat money laundering and terrorism financing.

COAF Takes the Lead

As Brazil’s primary financial intelligence unit, COAF is responsible for:

  • Regulating financial institutions
  • Enforcing sanctions
  • Investigating suspicious transactions
  • Monitoring clients or accounts that pose a risk to the country’s financial sector

With technical and operational autonomy, COAF is administratively connected to the Brazilian Central Bank (BCB).

BCB Ensures Compliance

The BCB, as the competent authority, ensures that national financial system institutions comply with anti-money laundering and combating the financing of terrorism (AML/CTF) legislation and regulations. The bank aims to prevent the financial system from being used for illegal purposes such as money laundering or terrorism funding.

Complying with COAF Regulations

Institutions subject to regulation must adhere to strict guidelines, including:

  • Implementing internal controls to identify clients and maintain up-to-date records
  • Providing effective training programs for employees on AML/CTF requirements
  • Monitoring transactions in domestic and foreign currencies, instruments, and securities
  • Registering with the regulatory authority and/or COAF
  • Complying with COAF’s reporting requirements on a regular basis

AML/CTF Reporting Obligations

Financial institutions must report suspicious transactions to COAF in confidence. Transactions that may be evidence of money laundering or terrorism financing include:

  • Cash transactions exceeding BRL 10,000
  • Transactions to non-Brazilian bank accounts exceeding BRL 100,000
  • Immediate reporting of suspicious transactions within 24 hours
  • Reporting of sanctions matches
  • Serious evidence of terrorism financing acts

In a bid to combat financial crime, Brazil’s financial intelligence units are working tirelessly to detect and prevent illegal activities. By understanding the country’s AML/CTF regulations and reporting obligations, financial institutions can ensure compliance and contribute to a safer financial system.