Compliance with International Anti-Money Laundering (AML) Standards in Brazil

Brazil has implemented a robust framework to achieve compliance with international AML standards set by the Financial Action Task Force (FATF). This framework is built upon several key aspects, ensuring that Brazil’s domestic AML and counter-terrorist financing (CTF) regime aligns with global best practices.

Adoption of FATF Recommendations

Brazil has adopted the FATF Recommendations as the foundation for its domestic AML and CTF regime. This ensures that Brazil’s framework is consistent with international standards, promoting a cohesive approach to preventing money laundering and terrorist financing.

Legislative Framework

Brazil has enacted domestic legislation, such as Law No. 9,613/1998 (the Anti-Money Laundering Law), to establish the legal basis for its AML regime. This legislation provides a clear framework for financial institutions and other entities to implement effective AML measures.

Financial Intelligence Unit (FIU)

Brazil has established a dedicated FIU known as the Council for Financial Activities Control (COAF). COAF is responsible for receiving, analyzing, and disseminating reports related to suspicious transactions. This enables the effective detection and reporting of potential money laundering and terrorist financing activities.

Risk-Based Approach

Brazil has adopted a risk-based approach in its AML efforts. This involves assessing and addressing risks associated with money laundering and terrorist financing in a targeted manner. By identifying and mitigating high-risk areas, Brazil can ensure that its resources are focused on the most critical threats.

Customer Due Diligence (CDD)

Brazilian AML regulations mandate customer due diligence, including the identification and verification of customer identities. This ensures that financial institutions have a clear understanding of their customers and can detect potential money laundering or terrorist financing activities.

International Cooperation

Brazil actively engages in international cooperation in matters related to AML and CTF. This includes cooperating with foreign jurisdictions and law enforcement agencies, exchanging information, and providing assistance in cross-border investigations. By working together, Brazil can leverage global expertise and resources to combat money laundering and terrorist financing.

Sanctions Compliance

Brazil complies with international sanctions regimes, screening financial transactions against lists of sanctioned individuals and entities. This ensures that Brazil’s financial system is not used for illicit purposes, such as evading sanctions or supporting terrorism.

Assessments and Evaluations

Brazil participates in mutual evaluations conducted by FATF and regional AML bodies, such as the Financial Action Task Force on Money Laundering in South America (GAFILAT). These evaluations enable Brazil to assess its compliance with international AML standards and identify areas for improvement.