Brazil, the largest and most populous country in South America, grapples with a significant issue of money laundering. For years, money laundering, along with fraud, corruption, drug trafficking, and tax evasion, has posed substantial threats to the nation. These financial crimes, executed through the financial systems, undermine the stability of Brazil’s economy. In response to this pressing concern, the Government of Brazil is actively implementing Anti-Money Laundering regulations to safeguard financial stability and counter these illicit activities.

In 1998, the Government of Brazil established the Council for Financial Activities Control (Conselho de Controle de Actividades Financieras – COAF) under Law No. 9.613, within the Ministry of Finance. This law also prescribes penalties for those involved in money laundering, terrorist financing, and drug trafficking crimes.

COAF holds regulatory and supervisory authority over the financial sectors. Its primary objective is to detect and prevent suspicious transactions, especially those related to money laundering. Brazilian financial institutions play a crucial role in this process by identifying suspicious transactions and reporting them to COAF. Subsequently, COAF reviews these reports and takes legal action if it identifies any criminal transactions.

Over the years, significant developments have taken place in the Anti-Money Laundering (AML) field in Brazil. Regulators have provided training to financial institutions, enhancing their ability to combat financial crime more effectively. These training programs have empowered financial institutions to detect suspicious transactions and promptly report them to COAF.

Additionally, Brazil updated its AML/Combating the Financing of Terrorism (CFT) measures in accordance with the recommendations issued by the Financial Action Task Force (FATF) in 2012. While the FATF’s assessment report on Brazil acknowledged progress in the AML field, it also highlighted areas that still require improvement.