Financial Crime Trends and Predictions in Brazil: Challenges Remain Despite Progress

Brazil has made significant strides in strengthening its system to combat money laundering and terrorist financing. However, key challenges persist, including improved cooperation and coordination among authorities and enhanced prosecution of financial crimes.

Progress and Positive Results

• Strengthened International Cooperation: Brazil has strengthened its international cooperation with the Financial Action Task Force (FATF) and the Group of Latin American and Caribbean Countries against Money Laundering (GAFILAT).
• Risk Assessment and Policy Coordination: The country has improved its risk assessment and policy coordination since its last evaluation in 2010.
• Comprehensive Understanding of Money Laundering Risks: Brazil has a comprehensive understanding of its money laundering risks, which include corruption, organized crime, tax evasion, drug trafficking, and environmental crimes.

Challenges and Areas for Improvement

Police-Prosecution-Tax Office Cooperation

• The country lags behind in regulating non-financial sectors, such as lawyers, for anti-money laundering/combating the financing of terrorism/countering proliferation financing (AML/CFT/CPF) purposes.
• Enhancing asset recovery is also a pressing concern, with confiscation results not entirely aligned with the country’s risk profile.

Asset Recovery and Company Misuse Detection

• Initiatives like REDESIM have improved company misuse detection, but challenges persist in ensuring transparency over business entities.
• The database for beneficial ownership information remains largely underutilized.

Terrorist Financing Measures

• Although Brazil has demonstrated some improvement in recent years, more significant advancements are needed to make these measures effective.
• The country should enhance its risk understanding and mitigation strategies to address the threat of terrorist financing.