The move by Brazilian authorities to weaken AML and anti-corruption efforts should be noted by companies and financial institutions doing business in the region. This may be particularly concerning for entities who are classifying Brazil as a low or medium-risk geography, even as the Financial Action Task Force (FATF) improved it's outlook for the country in February 2017:
"The FATF recognizes that Brazil has taken several significant steps to improve its CFT regime; however deficiencies remain regarding targeted financial sanctions.
The FATF calls on Brazil to fulfill its FATF membership commitment by taking further action to fully address these shortcomings. Should Brazil continue to fail to adequately rectify these deficiencies, the FATF may consider the next steps in its follow-up process."
Brazil's action highlights the need for continual updates to AML risk assessments due to the constant changes in political, geographic, and market risk factors.
Brazil’s Federal Police announced this week that it would shut down a crusading anticorruption task force, drawing a rebuke from prosecutors who warned the move could throttle investigations that have exposed systemic corruption among the country’s political and business elites.