Brazil Makes Progress in Fight Against Financial Crime, But More Work Remains
According to a recent report by the Financial Action Task Force (FATF) and the Latin American Financial Action Task Force (GAFILAT), Brazil has made significant strides in improving its system to combat money laundering and terrorist financing. While the country has shown improvement in international cooperation, risk assessment, and policy coordination since the last evaluation in 2010, key challenges remain.
Challenges Ahead
One of the major areas of concern is the need for enhanced cooperation and coordination among authorities, particularly the Police, Prosecution Authority, and Tax Office. The report highlights that Brazil’s banking and securities sectors are exposed to cross-border threats due to the country’s porous borders and its position as a major economy in South America.
Understanding Money Laundering Risks
Brazil has demonstrated a deep understanding of its money laundering risks, including those arising from:
- Corruption
- Organized crime
- Tax crime
- Drug trafficking
- Environmental crimes
However, the report notes that the country needs to improve its supervision of the non-financial sector, which includes sectors such as lawyers that are currently unregulated for anti-money laundering (AML) and combating the financing of terrorism (CFT).
Asset Recovery and Terrorism Financing
The report also highlights the need for Brazil to enhance the recovery of assets linked to crime and terrorism. While the country has made some progress in confiscating corruption-related assets, its overall results are not entirely in line with the risks it faces.
Brazil’s measures to combat the financing of terrorism have improved in recent years, but more work remains to be done to ensure their effective implementation. The report notes that while the risks of terrorist financing are relatively low in Brazil, the country should enhance its risk understanding and mitigation from terrorist financing risks.
Conclusion
Overall, while Brazil has made progress in combating financial crime, it is clear that there is still much work to be done to strengthen cooperation and coordination among authorities, improve supervision of the non-financial sector, and enhance asset recovery and terrorism financing measures.