1. Legal Challenges for Foreign Investment in Latin America ABA - Section of International Law Latin American Caribbean Committee The war against money laundering and corruption May 2008 Sao Paulo, Brazil

2. The war against Money Laundering Law n. 9.613, 3 March 1998:  Defines money-laundering as a criminal offence (article 1);  Sets forth special procedural provisions (articles 2-8);  General rules of compliance (articles 9-13);  Creates COAF – Financial Activities Control Counsil (the Brazilian FIU) (articles 14-17).

3. The war against Money Laundering key-features of the offence of money laundering in Brazil It follows the general provisions set forth in the UN Vienna Convention of 1988. The offence of money-laundering is described in article 1 of Law n. 9.613, and on its paragraphs 1 and 2 (the only rule that criminalizes such conduct). Predicate crime : list of specific predicate offences (article 1) = the only ones able to turn the proceeds of crime “dirty” in connection with the money-laundering offence defined thereto.

4. The war against Money Laundering key-features of the offence of money laundering in Brazil According to Article 1, it is crime “to conceal or to disguise the true nature, origin, location, disposition, movement, or ownership of assets, rights and valuables that result directly or indirectly from the following crimes [...]”. Sentence : incarceration for a period of 3 to 10 years and a fine.

5. The war against Money Laundering key-features of the offence of money laundering in Brazil The predicate offences are: 1. Illicit drug trafficking; 2. Terrorism and its financing; 3. Smuggling or trafficking of weapons, ammunitions or materials used for their production; 4. Extorsion through kidnapping;

6. The war against Money Laundering key-features of the offence of money laundering in Brazil 5. Crimes against the public administration, including direct or indirect demands of benefits on behalf of oneself or others, as a condition or price for the performance or the omission of any administrative act; 6. Crimes against the Brazilian national financial system; 7. Crimes committed by a criminal organization; 8. Crimes against a foreign public administrative office.

7. The war against Money Laundering key-features of the offence of money laundering in Brazil Article 1, paragraphs 1 and 2 The predicate offences are the same for the next forms of money-laundering. “§ 1. The same punishment shall apply to anyone who, in order to conceal or disguise the use of the assets, rights and valuables resulting from the crimes set forth in this article: I – converts them into licit assets; II - acquires, receives, exchanges, trades, gives or receives as guarantee, keeps, stores, moves, or transfers any such assets, rights and valuables; III – import or exports goods at prices that do not correspond to their true value.”

8. The war against Money Laundering key-features of the offence of money laundering in Brazil “§ 2. The same sentence also applies to anyone who: I – through economic or financial activity, makes use of any assets, rights and valuables that he/she knows are derived from the crimes referred to in this article; II – knowingly takes part in any group, association, or office set up for the principal or secondary purpose of committing crimes refered to in this Law.”

9. The war against Money Laundering key-features of the offence of money laundering in Brazil Requisite mental element Mens rea. Offences require both knowledge and purpose to committ the crime. It is excluded, under Brazilian law, any possibility of liability on a negligence basis.

10. The war against Money Laundering key-features of the offence of money laundering in Brazil Final remarks: position of lawyers and legal professionals 1. If a legal professional obtains, in the performance of his/her duties, the information that a ML offence was or is being committed, there is no reporting obligation under Brazilian law.[1][1]

11. The war against Money Laundering key-features of the offence of money laundering in Brazil Final remarks: position of lawyers and legal professionals 2. If a legal professional (especially criminal attorney) receives in payment of fees valuables derived from a predicate offence he/she is not committing ML.

12. The war against Money Laundering key-features of the offence of money laundering in Brazil Final remarks: position of lawyers and legal professionals 3. If a legal advisor, through his/her legal advice, is actually taking part in money laundering activities, he/she is committing the crime of ML. A recent case.

13. The war against Money Laundering key-features of the offence of money laundering in Brazil Contact: Heloisa Estellita heloisa@toronadvogados.com.br + 55 11 3822 6064