Brazil AML Obligations for Accountants: Law 9.613, COAF and the CFC

Brazil brings accountants and other advisers directly into its anti-money-laundering law. If you provide accounting, audit, consulting or advisory services in Brazil, or you are comparing how countries treat the profession, this guide explains what Law 9.613 of 1998, as strengthened in 2012, and the accounting profession's own resolution say about who is covered, reporting to the financial intelligence unit (COAF) and sanctions. For the general ideas behind customer due diligence, see our guide to KYC and customer due diligence for accountancy practices.

Where this guide comes from

We read the text of Law 12.683 of 2012 on the Brazilian presidency's legislation site, which rewrites several articles of Law 9.613/1998, and the news page on the Federal Accounting Council (CFC) website announcing CFC Resolution 1.530 of 22 September 2017. We did not read the full resolution or the current consolidated law, so some details below are marked as unconfirmed. This is general information, not legal advice.

Who is covered

Article 9 of Law 9.613, as rewritten in 2012, lists the persons subject to the duties. Item XIV covers people who provide, even occasionally, advisory, consulting, accounting or audit services in certain operations that the article lists in sub-items. The text we read does not spell out which operations those are, so check the full article. The CFC resolution applies to professionals and accounting organisations that provide, even occasionally, advisory, consulting, accounting, audit, counselling or assistance services of any kind in operations carried out by individuals or companies.

Know your client and internal controls

The CFC page summarises the resolution as aiming for professionals to know the client, its operations and its ultimate beneficial owner. Article 10 of the law, in the part we could read, requires internal policies, procedures and controls compatible with the business's size and volume of operations, registration with the regulator or, failing that, with COAF, and responses to COAF requests. The first two items of article 10, which cover client identification and record keeping, were not in the excerpt, so we cannot confirm the retention period. Our guide to ultimate beneficial ownership explains why owners matter.

Reporting to COAF

Article 11 requires reporting suspicious operations to COAF within 24 hours, and it prohibits telling anyone about the report. It also requires reporting the absence of suspicious transactions to the regulator or, failing that, to COAF. Our guide to suspicious activity reports and tipping off explains the principle behind the no-disclosure rule.

According to the CFC page, two articles of the resolution deal with the practicalities. Article 8 says advisory services for risk analysis of another company are not the subject of a communication to COAF. Article 11 says a communication made by an accounting organisation exempts its partners or owners from reporting individually, provided they do not provide services as individuals.

Sanctions

Article 12 sets out penalties. The part we read shows a variable fine not exceeding limits set by reference to twice the value of the operation, twice the actual (or presumed) profit, or R$20 million, and it also refers to cancellation or suspension of the authorisation to carry on the activity. Paragraph 2 applies the fine when the persons in article 9 fail to meet the duties in article 10, items I to IV, or fail to respond to a COAF request within the deadline. We did not see the lower tiers such as warnings, and we have not resolved how the three limits interact, so check the consolidated text.

Practical steps (our suggestions)

• Work out whether your Brazilian activity falls under article 9, item XIV, even if the services are occasional.
• Register with the competent regulator, or with COAF if there is none, as the law requires.
• Write down who has authority to file a suspicious operation report and how a 24-hour deadline will be met.
• Keep client identification and beneficial owner information organised and ready for COAF requests.
• Keep your team current. Our CPD courses include financial crime topics.

What we could not confirm

We did not read the full text of CFC Resolution 1.530 and cannot say whether it has since been replaced. We also did not read articles 9 sub-items, articles 10 I and II, or the full text of article 12, so the list of covered operations, record-keeping period and lower penalty tiers are unconfirmed. The CFC page itself cites two different 2012 laws in different places. Check the current consolidated law and the CFC's latest resolution before relying on this guide.

Frequently asked questions

Are accountants covered by Brazil's AML law?

Yes. Article 9, item XIV, covers people who provide accounting, audit, consulting or advisory services, even occasionally, in the operations the article lists.

How fast must a suspicious operation be reported?

Within 24 hours, according to article 11.

Who receives the reports?

COAF, the financial intelligence unit.

Can a firm report once for all of its partners?

According to the CFC page, a communication by an accounting organisation exempts partners from reporting individually if they do not also provide services as individuals.

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