Financial Crime World

Money Laundering in Brazil: Laws, Definitions, and Penalties

Brazil, one of the world’s largest economies, has strict regulations against money laundering. In this article, we will discuss the definitions, laws, and penalties related to money laundering in Brazil.

Money Laundering Laws in Brazil (1998 & 2012)

  • Money laundering became a criminal offense in Brazil with the enactment of the Brazilian Anti-Money Laundering Law (Lei de Combate à Lavagem de Dinheiro), Federal Law No. 9,613/98.
  • The law was later amended in 2012 by Federal Law No. 12,683/2012.
  • Money laundering is a federal offense, and there are no state or municipal laws that prohibit money laundering in Brazil.

Definition of Money Laundering

The crime of money laundering in Brazil is defined as:

  1. Concealment or disguise of the true nature, origin, location, disposition, movement, or ownership of assets.
  2. Use or acquisition of assets knowing they are the proceeds of criminal offenses.
  3. Conversion or exchange of assets into legal assets.
  4. Participation in groups, associations, or offices involved in the commission of money laundering crimes.

Predicate Offenses (2012 Reform)

  • As of 2012, any crime or misdemeanor can constitute a predicate offense to money laundering in Brazil.
  • Tax crimes are not explicitly excluded but can be controversial regarding generating proceeds of crimes.
  • A crime is committed in Brazil if the criminal conduct, omission, or result of the crime took place within its territory (ubiquity theory).

Extraterritorial Jurisdiction

Brazil has extraterritorial jurisdiction over money laundering offenses when:

  1. At least part of the money laundering conduct was committed in national territory.
  2. The money laundering conduct harmed national public assets, even if committed abroad.
  3. Brazil is required to repress such conduct under international conventions.
  4. Predicate offenses were committed against the Brazilian public administration.

Corporate Criminal Liability

  • Legal entities are only subject to criminal liability for environmental crimes in Brazil.
  • However, the Brazilian Anti-Money Laundering law establishes administrative liability for legal entities and individuals for failure to comply with AML compliance requirements.

Investigating and Prosecuting Money Laundering Offenses

  • Criminal investigations are conducted by state or federal police and/or state and federal prosecutors.
  • Money laundering offenses are investigated by federal authorities when they are committed against the national financial system, related to the federal government, or when federal justice is competent for the prosecution of the predicate offense.

Penalties for Money Laundering

Penalties for money laundering range from 3 to 10 years in prison, plus a fine:

  1. Three to five years for individuals.
  2. Five to ten years for those involved in criminal organizations or with reiterated offenses.

Civil Penalties

There are no civil penalties for violations of the money laundering laws in Brazil.

Asset Forfeiture

  • Individuals may lose all assets, rights, and values related to money laundering offenses upon a criminal conviction through articles 7 and 91 of the AML Law and the Brazilian Criminal Code.
  • Assets, rights, and values derived from criminal offenses can be forfeited.