Search for:

The Brazilian Control Council for Financial Activities (COAF) published on December 9 a new resolution on Politically Exposed Persons (PEP). Resolution No. 29/2017 will enter into force within 90 days after its publication, revoking the previous resolution regarding the matter (Resolution No. 16/2007).

The new resolution foresees the expansion of the list of people defined as PEP, including mayors from all cities (the previous resolution considered only the mayors of capitals as PEPs), councilors (previously limited to the president of the city council), state representatives, national presidents and treasurers, or equivalent, of political parties, presidents of courts and councils of municipal auditors, among others.

The resolution also stipulates that COAF-regulated persons should dedicate special attention to family members to the second degree, as well as “closest collaborators” who have a straight connection of  public knowledge with a politically exposed person, or have business partnership or arrangement, or that participate in legal entities for the benefit of a PEP.

With the new resolution, COAF aims to change the approach to money laundering risk, focusing on operations rather than on individuals.

Author

Alessandro da Cruz is a senior associate at the Compliance & Investigations practice group of Trench Rossi Watanabe (in cooperation with Baker McKenzie) in São Paulo, Brazil. In the anticorruption compliance field, his practice includes assistance in matters involving the Brazilian anticorruption framework, FCPA and other anticorruption legislation, internal investigations (including multijurisdictional cases), development, revision and implementation of compliance programs, training of employees, risk assessments and due diligence in the context of M&A transactions.