by Isadora Corrêa e Natália Ariza
Law No. 9.613/98 (Money Laundering Law) provides for the crimes of money laundering and concealment of assets, in addition to consolidating guidelines for the prevention of the use of the financial system for the unlawful acts provided for in its normative text. This legal framework inaugurated criminal compliance in the legislative sphere, requiring financial institutions to adopt internal policies, procedures, and controls to identify and report suspicious transactions to the competent regulatory or supervisory body.
Among the measures to be adopted by the private sector, the identification and monitoring of PEPs (Politically Exposed Persons) are essential to mitigate the risks of using regulated institutions to integrate assets from illicit activities into the national financial system.
COAF (Financial Activities Control Council) Resolution No. 40/2021 consolidates the positions considered PEPs. In summary, these are agents who perform or have performed in the last five years relevant public functions, such as holders of elective offices in public administration entities. Furthermore, the Resolution extends the definition of PEP to individuals who hold similar positions abroad, such as heads of state and leaders of political parties, among others.
Institutions should pay special attention to transactions or proposals involving a PEP, in order to avoid potential involvement in possible corruption or money laundering schemes. To this end, the Resolution determines that companies must adopt procedures of i) obtaining prior authorization from the managing partner of the company for the establishment of a business relationship or the continuation of an existing relationship; ii) adoption of due diligence to verify the origin of the funds and iii) enhanced and continuous monitoring of the business relationship (due diligence).
The implementation of the guidelines should not be restricted to negotiations and transactions carried out with PEPs, but also to their family members and close associates. This oversight is necessary given the possibility of exploitation of this type of relationship by the exposed person as a strategy to conceal assets or commit other crimes.
Therefore, the implementation of compliance policies for the effective identification and monitoring of PEPs is fundamental to the prevention of money laundering. This is because non-compliance with the requirements provided for in the Money Laundering Law may result not only in the application of penalties, such as fines or suspension of the exercise of activity, but also reputational risks that may affect the credibility of the company in the market, causing the loss of customers, investors, and business relationships.
