1. What laws in your jurisdiction prohibit money laundering?
Money laundering became a criminal offence in Brazil in 1998, with the enactment of the Brazilian Anti-Money Laundering Law, Federal Law No. 9,613/98 (AML Law), later amended by Federal Law No. 12,683/2012.
Criminal offences and their respective sanctions are part of the federal congress’ exclusive law-making powers and, therefore, must be established by federal statute. As such, there are no state or municipal laws prohibiting money laundering.Answer contributed by Antenor Madruga, Ana Maria Belotto and Mariana Tumbiolo
2. What must the government prove to establish a criminal violation of the money laundering laws?
The crime of money laundering is defined in Federal Law No. 9,613/98 as the concealment or disguise of the true nature, origin, location, disposition, movement or ownership of assets, rights, and values that result directly or indirectly from a criminal offence.
The law further establishes that the same penalties apply to those who:
- To conceal or disguise the use of assets, rights or amounts/value deriving from a criminal infraction:
- Convert them into legal assets;
- Acquire, receive, exchange, negotiate, grant or receive as
- guaranty, deposit in checks, or transfer;
- Import or export assets/goods at amounts that do not correspond to their real value.
- Use, in their financial and economic activity, assets, rights or amounts/value deriving from criminal infractions; and
- Participate in groups, associations or offices knowing that its main or secondary activity is directed at the crimes described in Law No. 9,613.
To prosecute an act of money laundering, the prosecution must establish a predicate offence. The prosecution of the predicate and money laundering offences is independent. The defendant may be liable for both criminal acts, but does not need to be convicted of the predicate offence to be convicted of money laundering.
The prosecution must show an intent of the defendant to launder money/assets, reckless or negligent conduct does not constitute the crime of money laundering.Answer contributed by Antenor Madruga, Ana Maria Belotto and Mariana Tumbiolo
3. What are the predicate offences to money laundering? Do they include foreign crimes and tax offences?
As of the 2012 reform in the AML Law (Federal Law No. 12,683/2012), any crime or misdemeanour can constitute a predicate offence to money laundering.
Tax crimes are not specifically excluded as a category of predicate offence, but it is controversial whether they can generate proceeds of crimes that could be laundered.
A crime is considered to be committed in Brazil if either the criminal conduct or omission or the result of the crime took place in Brazil (ubiquity theory). Therefore, even if the predicate offence was committed abroad, if money laundering acts took place in Brazil or harmed Brazilian entities, the individuals can be subject to criminal liability under Brazilian law.Answer contributed by Antenor Madruga, Ana Maria Belotto and Mariana Tumbiolo
4. Is there extraterritorial jurisdiction for violations of your jurisdiction’s money laundering laws?
The rules regarding extraterritorial jurisdiction are regulated by article 7 of the Brazilian Criminal Code and include: (i) crimes against the federal government, states, municipalities or the Federal District, or against government entities, government agencies, or government foundations (article 7, I, “b”); and (ii) crimes that due to treaties or conventions, Brazil has a duty to combat (article 7, II, “a”).
Based on the legal provisions above, the Brazilian Supreme Court and the Superior Court of Justice have recently ruled that Brazil has extraterritorial jurisdiction over money laundering offences when: (i) at least part of the money laundering acts were committed in national territory; (ii) the money laundering acts harmed national public assets, even when committed abroad; (iii) Brazil is required to repress such acts under international conventions; (iv) predicate offences were committed against the Brazilian public administration (STJ, AgRg HC No. 112,868/ STF, AgRG HC No. 185,223).Answer contributed by Antenor Madruga, Ana Maria Belotto and Mariana Tumbiolo
5. Is there corporate criminal liability for money laundering offences, or is liability limited to individuals?
Legal entities are only subject to criminal liability for environmental crimes under Brazilian law. Therefore, criminal liability for acts of money laundering is limited to individuals.
Legal entities subject to AML compliance requirements can be held administratively liable for failure to comply with the applicable obligations.Answer contributed by Antenor Madruga, Ana Maria Belotto and Mariana Tumbiolo
6. Which government authorities are responsible for investigating violations of the money laundering laws?
Criminal investigations are conducted by the state or federal police and/or state and federal prosecutors. Prosecutors oversee investigations conducted by the police and have the prerogative to file criminal actions against individuals for white-collar offences. In general, white-collar offences are investigated by specialised police departments and prosecutors.
Money laundering offences are investigated by federal authorities when the acts are committed against the national financial system or against the financial-economic order, goods, services, and interests of the federal government, or when the Federal Justice is competent for the prosecution of the predicate offence (article 2 of the Anti-Money Laundering Law).Answer contributed by Antenor Madruga, Ana Maria Belotto and Mariana Tumbiolo
7. Which government agencies are responsible for the prosecution of money laundering offences?
Criminal violations of the anti-money laundering law are prosecuted by federal, state or specialist prosecutors.
If there is no indication of an electoral or military crime, the money laundering offence will be prosecuted by ordinary federal or state prosecutors.
As discussed above, the Federal Prosecution will be responsible for prosecuting such offences when committed against the financial system or the financial-economic order, or against goods, services, interests of the federal government, its public companies, and entities or when the Federal Justice is competent to try the predicate offence.
The authority of Prosecutions from the different states of the Brazilian Federation is residual. State Prosecutors only prosecute money laundering offences that are not related to electoral, military or federal offences.Answer contributed by Antenor Madruga, Ana Maria Belotto and Mariana Tumbiolo
8. What is the statute of limitations for money laundering offences?
As provided for by article 109 of the Criminal Code, the limitation periods for crimes ranges according to the applicable penalty. The maximum applicable penalty for money laundering is ten years of imprisonment. Therefore the limitation period to prosecute is of 16 years, counted from the date the crime was committed.
As a general rule, the limitation period runs from the day the crime was committed to the time when the charges are confirmed by a judge. After the charges are confirmed, the limitation period is only interrupted when a sentence has been issued by a criminal judge or by a court of appeals.
In the case of continuing offences, the limitation period starts to run when that course of conduct ceases. The Supreme Court has ruled (Criminal Action No. 683/2017) that the concealment element of a money laundering offence is a continued crime and the limitation period only starts when the concealment ends.
In recent decisions, the Superior Court of Justice ruled that money laundering in general is a continuing offence, regardless of the modality in which it was committed (ie, AgRg no HC no. 574.573).
As the prosecution of money laundering is independent from the predicate offence, the limitation period of the predicate offence will not bar a money laundering prosecution.Answer contributed by Antenor Madruga, Ana Maria Belotto and Mariana Tumbiolo
9. What are the penalties for a criminal violation of the money laundering laws?
Penalties for the crime of money laundering range from three to 10 years of imprisonment, plus a fine. If the crime was committed through a criminal organisation or if there were reiterated acts of money laundering, the penalty may be increased from one-third to two-thirds, plus a fine.Answer contributed by Antenor Madruga, Ana Maria Belotto and Mariana Tumbiolo
10. Are there civil penalties for violations of the money laundering laws? What are they?
There are administrative sanctions for the violation of AML compliance requirements of the law.
Failure to comply with these obligations may subject legal entities and individuals to administrative sanctions that include a warning, the withdrawal or suspension of authorisation of the legal entity or individual to function or to conduct the specific activity, and financial fines not exceeding: (i) twice the value of the operation; (ii) twice the real profit obtained or that could possibly be obtained from the operation; or (iii) 20 million reais.Answer contributed by Antenor Madruga, Ana Maria Belotto and Mariana Tumbiolo
11. Is asset forfeiture possible under the money laundering laws? Is it part of the criminal prosecution? What property is subject to forfeiture?
Article 7 of the AML Law establishes that, as a result of a criminal conviction, individuals may lose, in favour of the federal government or the states, all assets, rights and values directly or indirectly related to money laundering offences. The object of the forfeiture under the AML Law is not only the profit obtained from the money laundering offence, but also the values that originated from the predicate offences.
Article 91 of the Brazilian Criminal Code, which is subsidiarily applied to money laundering offences, determines that a conviction automatically leads to the loss of the instruments of the crime – if its possession constitutes an illicit fact – and of the product or the profit of the crime. If the products or profits of the crime cannot be recovered or are located abroad, the forfeiture of equivalent goods and values may also be determined.
In 2019, the Anti-Crime Law introduced article 91-A to the Brazilian Criminal Code, which establishes the possibility of asset forfeiture when a sentence imposes an imprisonment penalty of over six years. Under these circumstances, the judge will determine the loss of the assets corresponding to the difference between the total amount of the wealth of the defendant and the amounts that are compatible with the defendant’s licit income.Answer contributed by Antenor Madruga, Ana Maria Belotto and Mariana Tumbiolo
12. Is civil or non-conviction-based asset forfeiture permitted under the money laundering laws? What property is subject to forfeiture?
The Brazilian Anti-Money Laundering Law only sets forth asset forfeiture related to criminal convictions. There is no civil asset forfeiture permitted under the money laundering law.Answer contributed by Antenor Madruga, Ana Maria Belotto and Mariana Tumbiolo