LatinFinance - November/December 2017 - 15
COVER
STORY
BRAZIL
The Brazilian government says it is cracking down on money
laundering by instituting tighter reporting rules on the financial
industry. Local banks, considered complicit by some, are finding they
may have to foot the bill. By Rodrigo Amaral
In the wash
The bribery and corruption scandals that have racked Brazil in recent years could not have
come to pass without the help of money launderers. Now a growing cadre of critics suspects
the problems go beyond crooked politicians and shady business people to the heart of Latin
America's largest financial services industry.
"The colossal amounts of money that have been laundered in the past decade would not
have been possible without a degree of leniency from certain financial institutions," says
Carla de Carli, a money laundering expert at Brazil's public prosecutors' office, or MPF.
But if Brazil is serious about fighting corruption, Carli says, it has to eliminate suspicious
financial transactions. "Investigations have shown that it is impossible to dissociate
corruption from money laundering," she says.
The Lava Jato investigation, for example, started as a probe into a suspected money
laundering scheme at a gas station in Brasília. It has since ballooned to involve accusations
of laundering more than 30 billion reais ($9.25 billion). Unlike some other countries in Latin
America, experts say bribes in Brazil move more laundered money than drug trafficking.
Brazil has strengthened its laws in recent years and requires banks to report all suspicious
activities, Carli says. But as the government piles more regulations on to the financial sector,
some critics say lawmakers have gone overboard, making it too difficult and too expensive to
conduct legitimate business in Brazil.
Legislators, however, say the sheer size of Lava Jato and other corruption investigations in
Brazil means cooperation from local financial institutions is key.
"The central question is, how can there be the transfer of billions of reais in resources
between the corrupt and the corrupted without the criminal complicity of the banks?"
Roberto Requião, a senator from the state of Paraná, asked during a speech in September. "It
just looks impossible."
Requião occupies the left wing of the centrist Brazilian Democratic Movement Party,
or PMDB, the same party as the reform-minded President Michel Temer, but he voices a
suspicion that many Brazilians share after years of investigations have shown that corrupt
politicians and business people were able to move money at will. Some of the suspects who
have signed plea bargain agreements with federal prosecutors have hinted at the possible
connivance of financial entities in the corruption schemes.
November/December 2017 - L ATINFINA NCE.COM 15
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Table of Contents for the Digital Edition of LatinFinance - November/December 2017
Contents
LatinFinance - November/December 2017 - Cover1
LatinFinance - November/December 2017 - Cover2
LatinFinance - November/December 2017 - Contents
LatinFinance - November/December 2017 - 2
LatinFinance - November/December 2017 - 3
LatinFinance - November/December 2017 - 4
LatinFinance - November/December 2017 - 5
LatinFinance - November/December 2017 - 6
LatinFinance - November/December 2017 - 7
LatinFinance - November/December 2017 - 8
LatinFinance - November/December 2017 - 9
LatinFinance - November/December 2017 - 10
LatinFinance - November/December 2017 - 11
LatinFinance - November/December 2017 - 12
LatinFinance - November/December 2017 - 13
LatinFinance - November/December 2017 - 14
LatinFinance - November/December 2017 - 15
LatinFinance - November/December 2017 - 16
LatinFinance - November/December 2017 - 17
LatinFinance - November/December 2017 - 18
LatinFinance - November/December 2017 - 19
LatinFinance - November/December 2017 - 20
LatinFinance - November/December 2017 - 21
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LatinFinance - November/December 2017 - Cover3
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