- New Regulation Determine The Concept Of High Value Products And Luxury Goods Which Were Include In The Brazilian Anti-Money Laundering Law
- May 7, 2013
- Law Firm: WFaria Advocacia - São Paulo Office
New Resolution # 25 issued by COAF - Council for Financial Activities Control, which enlarged the scope of Resolution # 24 and regulates Law # 9613, of March 3, 1998 (Brazilian Anti-Money Laundering Law), requires that all individuals or legal entities who markets or intermediates the marketing of high value products and luxury goods, considered those of individual amount equal or superior to R$ 10,000.00 (USD 5,000.00) , to maintain in its records the information of its customers and their operations for five years. This resolution also imposes the communication to COAF any operation or set of operations for a customer in a six-month period, involving the payment or receipt of an amount equal or superior to R$ 30,000.00 in cash or bearer checks.
Thus, traders and brokers of high value products and luxury goods shall, as from March 1st, 2013, take the following procedures.
- get registered before COAF;
- Keep records of their customers and other stakeholders, and, for a period of five years, of the operations that amount equal or superior to R$ 10,000.00 or its equivalent in foreign currency;
- Communicate to COAF, by electronic means, any operation or set of operations for a customer in a six-month period, involving the payment or receipt of an amount equal or superior to R$ 30,000.00 (USD 15,000.00) in cash or bearer check;
- Communicate to COAF any transaction that involve the parties, other stakeholders, values, form of payment, or lack of economic or legal purpose that may constitute serious evidence of the occurrence of any of the crimes state at Law 9.613/98 .
For those who do not comply with this new standard and, therefore, do not cooperate with the system to prevent money laundering, the fines may reach up to R$ 20 million (USD 10 million), and the loss of the operating its activity permit.
The regulation does not determine that the non-compliance with these new rules will affect the entire economic chain. In general, only the retailer distributor, or dealer would be held accountable. However, more than the loss of fine or activity permit, there is a much greater loss for the end of the chain - the reputation of the manufacturer and brand. In this sense, considering the size and potential of the manufacturers and the impact of loss that they may suffer, they should guide, train and support their representatives in the faithful compliance with this regulation.