Originally published in the August 3 edition of World Tax Daily (Copyrights Tax Analysts)
Two Central Bank regulations published in Brazil’s official gazette on July 27 tighten controls and procedures used by Brazil’s financial institutions to fight money laundering.
Central Bank Circular 3,461 broadens financial institutions’ internal procedures for the registration and identification of transactions carried out by regular and sporadic clients. It expands the control requirements in connection with:
- transactions or proposed transactions that involve parties, amounts, instruments, a lack of business purpose, or other indications of potential money laundering crimes;
- proposals for banking relationships or transactions with politically exposed persons — whether Brazilians or foreigners from countries with which Brazil has significant trade or financial transactions, common borders, or ethnic, linguistic, or political proximity;
- indications of attempts to bypass identification and registration procedures established in the circular;
- clients and transactions for which the identification of the final beneficiary is impossible;
- transactions with clients from countries that do not sufficiently apply the Financial Action Task Force recommendations; and
- situations in which it is not possible to keep clients’ updated information.
Central Bank Circular 3,462 updates existing exchange control regulations — including information gathering on foreign clients — to combat money laundering in international financial transactions.
Brazilian financial institutions have 30 days to adapt their internal procedures in accordance with the new regulations.
David Roberto R. Soares da Silva