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 remains inconsistent, particularly at the state level, leading to a decline in its ranking on Transparency International's Corruption Perceptions Index. Despite being a signatory to various international anti-corruption agreements, recent judicial decisions have raised concerns about the rule of law and the effectiveness of anti-corruption measures. The country’s ongoing challenges highlight the need for sustained efforts to strengthen law enforcement and judicial independence, alongside preventive reforms to address the root causes of corruption.

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 has been experiencing steady but slow economic performance, with a current unemployment rate of 7.4 percent and a rising debt-to-GDP ratio of 74.3 percent.

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