Financial Crime World

Boosting Brazil’s Fight Against Financial Crime: Ministry Unveils New Plan

The Ministry of Justice has announced plans to enhance its operational capacity and improve coordination between regulatory agencies to combat financial crime in Brazil.

Strengthening Supervision of Financial Institutions

One key area of focus is the supervision of financial institutions. The Ministry of Justice has designated competent authorities to oversee banks, credit cooperatives, exchange brokerage companies, travel agencies, hotels, and other financial entities. These authorities include:

  • National Monetary Council (CMN)
  • Central Bank of Brazil (BACEN)
  • Superintendence of Private Insurance (SUSEP)
  • Securities and Exchange Commission (CVM)

Addressing Areas for Improvement

However, officials acknowledge that there are still areas where improvement is needed. For instance:

  • Bank secrecy provisions prevent regulators from accessing complete information, which hinders their ability to fully supervise financial institutions and cooperate with foreign counterparts.
  • Non-banking currency exchange facilities, such as exchange brokers, hotels, and travel agencies, need to introduce internal controls and compliance evaluation procedures.

Enhancing Domestic Cooperation

The Ministry of Justice is working to enhance domestic cooperation between regulatory agencies. While officials say that coordination between regulators appears generally comprehensive, there are still areas where improvement is needed, such as:

  • CVM’s inability to access certain information due to bank secrecy provisions.

Training and Compliance Officers

The Ministry of Justice has emphasized the importance of training and compliance officers within financial institutions to ensure effective Anti-Money Laundering (AML) programs. While there is no formal audit requirement for these programs, officials stress that it is crucial to have a robust system in place to detect and prevent financial crimes.

Conclusion

The new measures aim to strengthen Brazil’s fight against financial crime by enhancing supervision, improving coordination between regulatory agencies, and ensuring that financial institutions have effective AML programs in place.