VIE 29 DE MARZO DE 2024 - 03:51hs.
To prevent and fight money laundering

Brazil’s Coaf becomes the Financial Intelligence Unit with Ricardo Liáo as head

The Provisional Measure (PM) 893, published this Tuesday (8/20) in the Official Gazette of the Union, transformed Brazil’s Financial Activities Control Council (Coaf) into the Financial Intelligence Unit (FIU). The President of the Central Bank, Roberto Campos Neto, has appointed Ricardo Liáo to chair the Unit. The former Coaf, now FIU, is in charge of preventing money laundering and fraud in lottery and sports betting awards, among other responsibilities.

According to the PM text, the Central Bank (CB) is responsible for approving the governance structure of the new body, observing the alignment with international recommendations and best practices. CB’s President, Roberto Campos Neto, has appointed Ricardo Liáo to chair the Unit. In the same ordinance, it was confirmed the dismissal of Roberto Leonel, president of Coaf and official of the IRS.

The FIU will be responsible for producing and managing financial intelligence information for preventing and combating money laundering, terrorist financing and the financing of the proliferation of weapons of mass destruction. The new president of the FIU is a BC career server. He was former executive secretary of Coaf and head of the BC's Department of Financial Illegal Prevention. He was currently retired.

Internal pressure

In recent weeks, sectors of the government have been pushing for Leonel's resignation. He had made public criticism of the ruling by the Supreme Court (STF) president, Minister Dias Toffoli, who suspended the use, without prior judicial authorization, of data provided by the FIU (then Coaf) in investigations. The decision benefited Senator Flavio Bolsonaro. (PSL-RJ), son of President Jair Bolsonaro.

The Minister of Economy, Paulo Guedes, had been advocating an "institutional solution" to the case - the transfer of the FIU Economy to the BC - which took place on Monday night, via a Provisional Measure (PM).

During an interview outside the Dawn Palace, Bolsonaro was asked about an open gap in the PM to make political indications for the FIU. The text enables the appointment of people in commissioned positions, who may not be employees, to compose the technical-administrative staff of the body.

"So far Coaf nominations have been 100% political, it's decreasing that. If there is any failure in the PM, I reissue," said Bolsonaro. "The initial proposal of the decree would have a filter by the Executive for some people, I took off, when I saw took off. It will be totally in the hands of Roberto Campos Neto."

Relation of Coaf with Gaming in Brazil

In Brazil gaming sector, Coaf has an important role. Caixa is required by law to inform Coaf of the names of all prize winners over R$ 10,000 (US$ 2,460), as well as suspicious transactions regarding repeatedly drawn winners. The Coaf, in turn, crosses the data received with those already available in its files and sends reports reporting suspicious cases to the PF and the prosecutor.

It is also moving forward in the Chamber a request for information to own Coaf about possible fraud in the awards of Caixa. The opinion of the Rapporteur, Deputy Marcos Pereira (PRB-SP), was by the approval of Information Request (RIQ) 786/2019 requesting to the Minister of Economy, through the Financial Activities Control Council, information on evidence of fraud in the awards. Now, the request awaits Order of the President of the Chamber of Deputies.

A participation of Coaf is also included in Provisional Measure 846/2018, which provides for the National Fund for Public Security (FNSP) the destination of the proceeds from the collection of lotteries and the commercial promotion and the lottery mode called fixed odd sport betting. Regarding the tax aspect, on the gains obtained, the legal entity holding the authorization will send to Coaf, in accordance with the rules issued by the Executive Power, information on gamblers regarding the prevention of money laundering and terrorist financing.

The projects to legalize games of chance in Brazil also contemplate the figure of Coaf. In them, the proposed models are based on an oversight structure as executive branch authorities with the Central Bank and the Financial Activities Control Board (Coaf). Last November, in an exclusive conversation with Games Magazine Brasil, former Coaf President Antonio Ferreira de Sousa explained how the country will work on the gaming market in case the activity is legalized. “Some regulatory improvements will be needed to adapt Brazil to this possible new reality,” commented Ferreira de Sousa, who also described at that moment his meeting with representatives of the Las Vegas Sands Group.

Source: GMB/Valor/Banco Central