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 has established laws and regulations to combat corruption, but enforcement is inconsistent, particularly at the state level. Despite being a signatory to various international anti-corruption agreements, Brazil's ranking on Transparency International's Corruption Perceptions Index has declined, highlighting ongoing concerns about the rule of law and the effectiveness of anti-corruption measures. The legacy of Operation Carwash and recent legislative changes indicate a need for continued efforts to strengthen law enforcement and judicial independence to effectively address corruption in the long term.

Brazil is the second largest economy in the Western Hemisphere and the eleventh largest in the world, with a nominal GDP that has shown modest growth in recent years. In 2022, Brazil attracted $86 billion in foreign direct investment, making it the fifth largest destination for such investments globally, although the economy has faced challenges including a high unemployment rate of 7.4% and a rising debt-to-GDP ratio of 74.3% as of 2023.

Brazil has emerged as a significant destination for foreign direct investment (FDI), ranking fifth globally with inflows of $86 billion in 2022, a 68% increase from the previous year. The government actively encourages FDI, particularly in sectors like renewable energy and infrastructure, offering incentives such as tax exemptions and low-cost financing, although restrictions exist in certain areas like healthcare and telecommunications. Despite these efforts, challenges such as high transportation costs, low productivity, and complex regulatory requirements continue to hinder the investment climate.