Anti Money Laundering (AML) in Brazil

Brazilian authorities report that the major sources of illegal proceeds are crimes against the financial system (such as fraud and embezzlement), drug trafficking, and tax evasion. Money laundering in Brazil seems to be primarily associated with domestic crime, including the smuggling of contraband goods and corruption, narcotics trafficking, and organized crime, which generates funds that may be laundered through the banking system, real estate investment, or financial asset markets.

As a result, the Government of Brazil (GOB) has a comprehensive Anti-Money Laundering (AML) regulatory regime in place.

In 1998, the GOB enacted Law 9.613 criminalizing money laundering related to drug trafficking, terrorism, arms trafficking, extortion, and organized crime.

Law 9.613 also created a Financial Intelligence Unit (FIU), the Conselho de Controle de Actividades Financieras (COAF), which is housed within the Ministry of Finance. The COAF consists of representatives from regulatory and law enforcement agencies, including the Central Bank and Federal Police. The COAF regulates those financial sectors not already under the jurisdiction of another supervising entity.

This law was updated in 2002. Then, Law 12,683 was amended in July of 2012, providing a more wide-ranging definition of the types of illicit activity that fall under the category of "harmful acts."

Law 10.701 of 2003 criminalizes terrorist financing as a predicate offense for money laundering. The law also establishes crimes against foreign governments as predicate offenses, requires the Central Bank to create and maintain a registry of information on all bank account holders, and enables the Brazilian Financial Intelligence Unit (COAF) to request from all government entities financial information on any subject suspected of involvement in criminal activity.

The Brazilian Central Bank’s (BACEN) AML unit (DECIF) supervises compliance for AML regulations.

AML Training in Brazil

Brazil's Law 9.613 provides information for crimes related to money laundering or the concealment of assets, rights, and valuables. This and other laws require financial institutions to train their employees on how to recognize suspicious activity that may be tied to money laundering or terrorist financing activities.

In 2012, following the publication of the Financial Action Task Force's (FATF's) executive summary of the mutual evaluation report summarizing AML/CFT measures in place in Brazil, the Central Bank amended the rules applicable to procedures that must be adopted by financial institutions in order to prevent and combat money laundering and terrorist financing.

Banking in Brazil

The National Monetary Council, under the direction of the Minister of Finance, is Brazil’s chief financial policy-making body. The Brazilian Central Bank (BACEN), created by Law no. 4595 in 1964, issues currency and controls the money supply, credit, foreign capital, and other high-level financial activities.

The federal government also uses other public financial institutions to implement its policies, the most important of these being the Bank of Brazil. The largest bank in the country, Bank of Brazil has numerous agencies at home and abroad and is the main source of long-term loans for farmers and exporters of manufactured goods.

Brazilian financial institutions operating in the domestic market are in general diversified, dynamic, and competitive. Brazil has approximately 168 multiple and commercial banks with total assets of approximately USD 349 billion and equity of approximately USD 49 billion.

Many states have their own government banks, among which the Bank of São Paulo is the most important. A lesser share of Brazil’s commercial banking is in the hands of private banks, which also provide short-term loans and savings accounts. In the 1990s, federal and state governments privatized or closed several formerly state-owned banks and allowed foreign investors to control more financial institutions.

Economy in Brazil

Characterized by large and well-developed agricultural, mining, manufacturing, and service sectors, Brazil's economy outweighs that of all other South American countries with a GDP purchasing power parity of 1.836 trillion BRL. Brazil continues to expand its presence in the global market place.

Having weathered 2001-03 financial turmoil, capital inflows are regaining strength and the currency has resumed appreciating. The resilience in the economy stems from commodity-driven current account surpluses, and sound macroeconomic policies that have bolstered international reserves to historically high levels, reduced public debt, and allowed a significant decline in real interest rates. A floating exchange rate, an inflation-targeting regime, and a tight fiscal policy are the three pillars of the economic program. However, the government's goal of achieving strong growth while reducing the debt burden may create inflationary pressures.

Currency in Brazil

The currency in Brazil is the Real. However, the name of the money was only adopted in 1994. This was because in the past Brazil had many different currencies due to fluxes and changes in the economy.

In the Brazilian currency there are 1, 2, 5, 10, 20, 50 and 100 bills. Most bills have pictures of animals on one side and then the feminine character that is a representation of Brazil on the other. Coins are available in values of 1 cent, 5 cents, 10 cents, 25 cents, 50 cents and 1 Real. Coins vary in size and color.

Other Statistic of Brazil

Time Zone: BRT (UTC -2 to -5).

Location: Eastern South America, bordering the Atlantic Ocean.

Population: 202,768,562 (2014 estimate.)

Capital: Brasilia

Languages Spoken: Portuguese, LIBRAS.