Promising Anti-Money Laundering Legislation in Brazil | FTI Consulting

Promising Anti-Money Laundering Legislation in Brazil

Forensic & Litigation Consulting

August 20, 2013

In light of new anti-money laundering trials in Brazil which are expected to take place with greater frequency and in addition to the new enactment of a tough anti-bribery law required by OECD that is shades of the Foreign Corrupt Practices Act and the UK Bribery Act, FTI Consulting delves into the genesis of the new anti-money laundering law and its implications for both companies and individuals who conduct business in Brazil.

2005 in Brazil observed one of the largest corruption scandals when the embezzlement of public funds to purchase political support came to light. This scandal, known as Mensalão,1 involved the purchase of congressional votes by the ruling political party in Brazil. 38 defendants were charged, among whom included the President´s Chief of Staff, José Dirceu. The long list of charges during the lengthy trial included: money laundering, embezzlement, corruption, conspiracy and the misuse of public funds. During the trial, several of the defendants had money laundering charges dropped due to the fact that the Brazilian anti-money laundering (AML) law at the time required actual knowledge of the origin of the funds.

In July of 2012, Brazilian President Dilma Rousseff signed an amendment, enacting the country´s Anti-Money Laundering Law. This new law known as “12.683/2012” changed the manner in which the country previously addressed this type of economic and financial crime. The new law defines money laundering as the concealment of proceeds of any crime or misdemeanor, no matter how large or small. The new law also excludes the requirement that actual knowledge of the origin of the illicit fund must exist.

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