Financial Crime World

Brazil Strengthens Its Fight Against Financial Crimes

Progress in Combating Money Laundering and Terrorist Financing

According to a recent report by the Financial Action Task Force (FATF), Brazil has made significant progress in its fight against financial crimes. The country’s National Strategy Against Corruption and Money Laundering (ENCCLA) has enabled it to enhance its implementation of anti-money laundering (AML)/combating the financing of terrorism (CFT) measures.

Key Developments

  • Coherent AML/CFT strategy: Brazil has developed a coherent AML/CFT strategy, which has led to the approval of a bill to amend Federal Law 9613/1998 and criminalize terrorist financing.
  • Specialized Federal Courts: The country has implemented a system of Specialized Federal Courts, bringing together federal prosecutors and judges specialized in handling cases involving money laundering and other financial crimes.

Sources of Proceeds of Crime

The main sources of proceeds of crime in Brazil are:

  • Corruption
  • Crimes against the national financial system, including fraud and capital flight
  • Drug trafficking
  • Weapons trafficking
  • Organized crime
  • Smuggling
  • Embezzlement of governmental funds

Risk of Terrorist Financing

The government of Brazil has been working to mitigate the risk of terrorist financing in its territory through close co-operation with other interested governments. Initiatives such as regional intelligence structures, joint operations, and exchange of information are used to identify, prevent, and disrupt activities that could be related to terrorism and its financing.

Recommendations for Further Strengthening AML/CFT Regime

To further strengthen its AML/CFT regime, Brazil is recommended to:

  • Criminalize terrorist financing: Criminalize terrorist financing in a manner consistent with international requirements
  • Support Specialized Federal Courts: Continue to support the Specialized Federal Courts and other measures to enhance the ability to apply final sanctions for money laundering
  • Extend corporate liability: Extend corporate civil or administrative liability to legal persons who commit money laundering/terrorist financing
  • Ensure confiscation: Ensure that confiscation is systematically pursued
  • Implement freezing action: Implement effective laws and procedures to take freezing action pursuant to the relevant United Nations Security Council Resolutions (UNSCRs)
  • Broaden declaration obligation: Broaden the obligation to declare physical cross-border transportations of currency and bearer negotiable instruments
  • Enhance supervisory powers: Enhance supervisory powers and resources in some areas
  • Increase supervision of non-bank financial institutions: Increase supervision of non-bank financial institutions
  • Extend AML/CFT requirements: Extend AML/CFT requirements to all categories of designated non-financial businesses and professions (DNFBP).