Brazil Country Summary

FATF Status

Brazil is not on the FATF AML Deficiency list.

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Brazil was undertaken in 2023. According to that Evaluation, Brazil was deemed Compliant for 10 and Largely Compliant for 19 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 2 with regard to the 11 areas of Effectiveness of its AML/CFT Regime.

Brazil faces significant challenges related to crime and corruption, despite having established laws and regulations aimed at combating these issues. Corruption enforcement is inconsistent, particularly at the state level, and while there have been efforts to strengthen anti-corruption measures, societal norms that enable corruption persist, necessitating ongoing reforms and independent law enforcement to ensure accountability.

Criminal activities, including drug trafficking and arms smuggling, are prevalent, with powerful groups like the Primeiro Comando da Capital (PCC) and Comando Vermelho (CV) exerting considerable influence. The resilience of Brazilian society is tested by these criminal networks, which often fill gaps in public services in marginalized areas, highlighting the need for improved governance and social protection to reduce reliance on such organizations.

Brazil stands as the second-largest economy in the Western Hemisphere and the eleventh-largest globally, with a nominal GDP that reflects steady but modest growth in recent years. In 2022, Brazil emerged as the fifth-largest recipient of foreign direct investment (FDI), attracting $86 billion, a significant increase from previous years, indicating a robust investment climate despite ongoing challenges such as high labor costs and complex regulatory frameworks. The current administration under President Lula has introduced reforms aimed at simplifying the tax code and promoting public-private partnerships, while also focusing on sectors like agro-industrial chains and renewable energy, which are expected to enhance Brazil's economic resilience and attractiveness to foreign investors.