Title: FATF Report: Brazil’s Progress and Challenges in Money Laundering and Terrorist Financing

Overview

The Financial Action Task Force (FATF) and Regional Bodies (GAFILAT) have released a mutual evaluation report on Brazil’s progress in combating Money Laundering and Terrorist Financing.
The report acknowledges significant improvements but outlines key challenges.

Brazil has made significant strides since the previous evaluation in 2010 with improved international cooperation, risk assessment, and policy coordination.

Cooperation and coordination between authorities:
- The Police, Prosecution Authority, and Tax Office need to improve cooperation and coordination.
Prosecuting money laundering cases:
- Brazil must focus on prosecuting money laundering cases.
Environmental crimes and laundering of proceeds:
- Progress against environmental crimes and the laundering of proceeds needs to be made.
Unregulated sectors and AML/CFT/CPF:
- The unregulated status of sectors like lawyers needs attention for AML/CFT/CPF.

Brazil faces various money laundering risks, primarily corruption, organized crime, tax evasion, drug trafficking, and environmental crimes.

The Brazilian financial sector’s supervision has strengths, but gaps exist in supervision of the non-financial sector.

Initiatives to combat asset misuse, such as REDESIM, are in place, but Brazil needs improvement:
- Inadequate progress in confiscating corruption-related and other crime-related assets.
- Lack of transparency regarding business entities, mainly due to a largely unpopulated database for beneficial ownership information.

Brazil’s progress in fighting terrorist financing has been recognized. However, the report highlights:
- The need to enhance risk understanding and mitigation.
- Brazil cannot afford complacency despite the relatively low risk of terrorist financing.