Financial Crime Prevention Strategies in Brazil Fall Short

Progress Made in Strengthening Financial System to Combat Money Laundering and Terrorist Financing

Brazil has made significant progress in strengthening its system to combat money laundering and terrorist financing, according to a recent report by the Financial Action Task Force (FATF) and the Inter-American Group of Experts on Money Laundering (GAFILAT). However, authorities still face challenges in preventing financial crimes.

Key Challenges

• Enhanced Cooperation and Coordination: Authorities struggle with cooperation and coordination among themselves, particularly between the Police, Prosecution Authority, and Tax Office.
• Improved Prosecution of Money Laundering Cases: The country needs to improve prosecution of money laundering cases, including those related to environmental crimes and the laundering of proceeds.

Risks and Vulnerabilities

As one of the largest economies in the world, Brazil is exposed to various cross-border threats due to its significant banking and securities sectors. The country’s porous borders further exacerbate this vulnerability.

• Deep Understanding of Money Laundering Risks: Brazil has a deep understanding of its money laundering risks, particularly those related to corruption, organized crime, tax crime, drug trafficking, and environmental crimes.
• Gaps in Regulating Non-Financial Sector: Despite strong supervision of most financial sector institutions, Brazil still faces gaps in regulating its non-financial sector.

Recommendations for Improvement

Brazilian authorities can take several steps to address these challenges:

• Improving Cooperation and Coordination among Authorities
• Strengthening Regulation of the Non-Financial Sector
• Enhancing Asset Recovery
• Increasing Transparency of Business Entities

By addressing these challenges, Brazil can strengthen its financial system and prevent financial crimes more effectively.