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, leading to a drop in its ranking on Transparency International's Corruption Perceptions Index. Despite being a signatory to various international anti-corruption agreements, the country faces challenges, including the controversial handling of the Lava Jato investigation and the need for stronger law enforcement and judicial independence. Long-term solutions require not only intensified anti-corruption efforts but also systemic reforms to effectively reduce corruption risks.

Brazil is the second largest economy in the Western Hemisphere and the eleventh largest in the world, with a nominal GDP growth of 2.9 percent in both 2022 and 2023. The country attracted $86 billion in foreign direct investment in 2022, marking a 68 percent increase from the previous year, and the U.S. remains the largest foreign investor. Despite steady economic performance, Brazil faces challenges such as a high unemployment rate of 7.4 percent and a budget deficit of 8.1 percent of GDP.

Brazil has emerged as a significant destination for foreign direct investment (FDI), ranking fifth globally with inflows of $86 billion in 2022, marking a 68 percent increase from the previous year. The government actively encourages FDI, particularly in sectors like renewable energy and infrastructure, while providing investment incentives such as tax exemptions. However, challenges such as high transportation costs, rigid labor laws, and complex regulatory requirements continue to hinder the investment climate.