Brazil’s Financial Intelligence Unit Cracks Down on Financial Crimes: COAF Takes Center Stage

Regulating Financial Institutions and Preventing Financial Crimes

In an effort to curb financial crimes, Brazil has placed its Council for Financial Activities Control (COAF) at the forefront of the fight. As the country’s financial intelligence unit, COAF is responsible for regulating financial institutions and preventing money laundering, terrorism financing, and tax evasion.

Expanding Mandate and Reporting Directly to the Central Bank

This year, COAF’s mandate was expanded, with the organization now reporting directly to the Central Bank in Brasilia. This move enables COAF to take a more proactive approach in combating financial crimes and protecting the integrity of Brazil’s financial system.

Primary Function: Gathering and Disseminating Financial Crime Intelligence

COAF’s primary function is to act as a clearinghouse for information on financial crimes, gathering intel from investigations and mandatory reports submitted by financial institutions. This data is then disseminated to relevant enforcement agencies, enabling them to take swift action against suspected offenders.

• COAF gathers intelligence through:
  • Investigations
  • Mandatory reports from financial institutions
• COAF disseminates data to:
  • Relevant enforcement agencies
  • Enables swift action against suspected offenders

Know Your Customer (KYC) and Onboarding Processes

In addition to monitoring transactions and reporting suspicious activities, COAF requires financial companies to establish their own know your customer (KYC) and onboarding processes, in line with national anti-money laundering (AML) laws and a risk-based approach. This means that background screening checks must be proportionate to the level of risk posed by an individual’s appointment.

Global Anti-Money Laundering Efforts

As Brazil’s FIU, COAF plays a critical role in combating financial crime at the national and international levels. It is a member of the Financial Action Task Force (FATF), a global AML standards-setting organization, and represents the country on international forums.

Expanded Responsibilities

COAF’s responsibilities have been expanded over time, with the organization now also responsible for:

• Examining instances of money laundering
• Applying penalties for non-compliance
• Seizing assets at the request of the judiciary

Enhanced Powers Under the Central Bank

In its new role under the Central Bank, COAF is better equipped to tackle financial crimes head-on. With its enhanced powers, the organization is poised to make a significant impact in Brazil’s efforts to combat financial crime and protect the integrity of its financial system.