Title: Brazil’s National Risk Assessment: Medium Money Laundering, Terrorist Financing, and Weapons Proliferation Risks
Brazil, as a member of the Financial Action Task Force (FATF), conducted its first National Risk Assessment (NRA) on Money Laundering, Terrorist Financing (TF), and Weapons of Mass Destruction (WMD) Financing (AML/CFT) threats and vulnerabilities. The report identified Brazil’s medium risk level.
NRA Methodology
The National Risk Assessment was conducted using a systematic approach developed by the Working Group for the National Risk Assessment of Money Laundering, Terrorist Financing, and the Financing of Weapons of Mass Destruction (WGNRA). The assessment focused on evaluating threats, vulnerabilities, and combat capabilities.
Money Laundering Threats
- Corruption: High risk
- Drug trafficking: High risk
- Criminal organizations: High risk
- Financial crimes: High risk
- Tax evasion: High risk
Money Laundering Vulnerabilities
- Banking and non-banking financial institutions: Medium vulnerability
- Securities: Medium vulnerability
- Real estate: Medium vulnerability
Terrorist Financing Threats and Vulnerabilities
Threat Actors
- International terrorist organizations and their affiliates
Threat Activities
- Smuggling
- Donations
- Human trafficking
- Piracy
The risk level was categorized as low, but Brazil’s vulnerabilities, particularly in regulating and effectively supervising non-profit organizations and virtual assets, were identified as areas of concern.
Commendations and Areas for Improvement
Brazil was commended for its legal framework and operational capacity in investigating and prosecuting TF crimes. However, there is room for improvement in areas such as data collection and the evaluation of international cooperation to better understand and counter TF risks.
This comprehensive National Risk Assessment will support Brazil in taking effective actions to counter AML/CFT risks and work towards full compliance with international standards.