The New Law against Money Laundering in Brazil

By Dialogo
July 17, 2012

The crime of money laundering is directly linked to national and transnational criminal organizations, being something that exists together with organized crime. Thus, it dramatically affects the political and economic expressions of national power, posing a constant threat to the country’s security and development. Facilitated by the process of globalization, with the opening of economic markets in search of new business opportunities, transnational illicit activities expand in countries with deficient legislation and passive governments that encourage foreign investment.

A few days ago, Brazil took a major step toward improving its mechanisms targeting money laundering with the enactment of Law No. 12,683 of July 9, 2012, which amends Law No. 9,613/98, expanding its impact. The new law expands the range of illicit activities. Only drug trafficking, terrorism, weapons smuggling, kidnapping, crimes committed by criminal organizations, and crimes against the public administration and the financial system were previously listed.

Numbers running (o jogo do bicho), slot machines, and assets obtained from any illicit activity, including human trafficking, have now been added. The penalty of three to ten years in prison was maintained, but the maximum fine was increased from 200,000 reais to 20 million reais.

Other advances made by this law include authorizing the judiciary to carry out the prior confiscation of the assets of those involved in a crime, in the event of a conviction, and auction them off, with the proceeds going to the public treasury. The law also regulates the seizure of assets in the name of third parties or straw owners, which used to be allowed only during the police investigation or in the course of the trial, and only for assets in the name of the individual accused of money laundering. The benefits granted to those who cooperate with the authorities, taken into consideration only during trial in the previous legislation, can be implemented at any time under the new law, even after a conviction.

With the enactment of this law, the country is moving forward as one of those with the strictest measures for combating this type of crime and is contributing to more effective criminal prosecution. Penalizing the perpetrators is the most difficult part, due to the complexity of the criminal networks and the countless ways that exist to file judicial appeals, factors that end up encouraging this practice.

*André Luís Woloszyn is a strategic-affairs analyst, specialized in terrorism, with a diploma from the Brazilian Army War College