🛁 Brazil🇧🇷: where is money most likely to be laundered, and what does the regulator think ❓

🛁 Brazil🇧🇷: where is money most likely to be laundered, and what does the regulator think ❓
The main indicators of sectors most exposed to this risk are, of course, high transaction volumes, high liquidity and minimal controls. This is common in most countries, although there are some particularities.

⏩ Under Law 9.613/1998, the Council for Financial Activities Control (COAF) classifies the sectors most exposed to money laundering as “obligated entities”. In Brazil (and elsewhere), these most commonly include banks, fintech companies and brokerage firms.

⏩ Therefore, Brazil's financial sector is the most heavily regulated in terms of risk prevention:

🟢 Banks and fintech companies are required to maintain identity verification processes when onboarding new customers and continuously monitor transactions, including checking customers against sanctions lists and the list of politically exposed persons (PEPs).

🟢 Monitoring does not end when an account is opened: it continues throughout the customer's relationship with the institution and tracks changes in behavior that may indicate a potential risk.

⏩ Jewelry stores, precious metal dealers and real estate agencies rank second, as they handle large amounts of cash. These sectors face a specific challenge: transactions are generally one-off and high-value, unlike the continuous flow observed in financial institutions.

⏩ Unlike in many other jurisdictions, online betting ranks third, as the country's gambling sector is regulated separately and has its own prevention measures, including monitoring betting patterns and reporting suspicious transactions to COAF.

⏩ How is it punished?: law No. 9.613/1998 provides for imprisonment for 3 to 10 years, as well as the payment of a fine with a maximum amount of USD 3,854,000 (although financial penalties are sometimes calculated on a daily basis). The penalty may be increased by 1/3 or even 2/3 in cases of recidivism, involvement in a criminal organization or criminal conspiracy.

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