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 globally, with a nominal GDP growth forecast of 1.78 percent for 2024. The country attracted $86 billion in foreign direct investment in 2022, marking a significant recovery post-pandemic, although it faces challenges such as high unemployment at 7.4 percent and a budget deficit of 8.1 percent of GDP. Recent reforms under President Lula aim to simplify tax legislation and promote public-private partnerships to enhance economic growth.

Brazil has emerged as a significant destination for foreign direct investment (FDI), ranking as the fifth largest globally in 2022 with inflows of $86 billion, a 68 percent increase from 2021. The government actively encourages FDI, particularly in sectors like renewable energy and transportation infrastructure, while offering tax incentives and equal treatment for foreign and domestic investors in most sectors. However, challenges such as high transportation costs, rigid labor laws, and complex regulatory requirements continue to hinder investment.