MONEY LAUNDERING LAW IS PRAISED (em inglês)
Por Arnaldo Galvão
GAZETA MERCANTIL March 2, 1998
International Weekly Edition
Printed in São Paulo and Washington(DC)
Nearly ten years after the Vienna Convention in December 1988, when the UN first warned about the use of financial institutions for laundering money from the international drug trade, Brazil is very close to joining the ranks of countries with advanced legislation on the matter
Despite delays, the 1996 law aimed at curbing money-laundering as well as concealment of goods and values was approved by the Chamber of Deputies and the Senate, and now awaits presidential sanction.
"This is an important step", commented Judge Walter Fanganiello Maierovitch, from São Paulo's Criminal Auxiliary Court and president of the Brazilian Institute for Criminal Studies Giovanni Falcone (IBGF). He explained that the money-laundering law is closely related to the draft bill on the flexibility of bank secrecy, recently approved by the Senate and remitted to the Chamber of Deputies.
Maierovitch highlighted some positive aspects of the bill: courts will be authorized to reduce the penalties of involved parties who cooperate with authorities; financial institutions are obliged to report suspect situations to authorities; the possible seizure of goods; judges will have more flexibility to enforce the sentences of others countries regarding the arrest of foreign convicts and the seizure of goods. The draft bill stipulates prison penalties ranging from three to ten years, in addition to fines.
Another item highlighted by Maierovitch was the precautionary measures which a judge may establish in order to appropriate assets and valuables from the defendant. The IBGF president also stressed that judges will have the right to try and condemn fugitive defendants. Maierovitch observed that the new law compensates for serious loop-hole in the Brazilian Penal Code, recently revoked amidst much controversy. There is an in article in the code that obliges judges to suspend the course of the laws suit if the defendant, convoked by the Justice System does not appear in court. He said that as a consequence of this legal loophole, the collection of evidence can be damaged, and law suits can last indefinitely.
The judge affirmed that according to the US Treasury, Brazil houses roughly 17% of the bank accounts belonging to large international drug-traffickers. He added that Brazil is the Latin American country where the highest number of members of the Italian Mafia reside.Maierovitch observed that though it is welcome, the new law is not enough. "Brazil is attempting to make up delay in the global race against organized crime, and if other countries do not cooperate, it will practically impossible to do anything", he said.
Next June, the General Assembly of the UN will meet, by request of the general vice-secretary, former Italian Senator Pino Arlacchi, to discuss how to combat money laundering, and specially how to control the transfer of money through electronic devices.
Officials suggest that companies which render services to banks in the electronic transfer segment be closely supervised. The UN should also discuss cooperation between the police and Justice Systems of countries and the so-called "fiscal havens".
Paolo Bernasconi, a law professor in Switzerland and former consultant for the Italian judges who created the "Clean Hands Operation" (against Mafia), said that the most risky financial centers are certain Caribbean islands, Monaco, Liechtenstein, Singapore, Hong Kong and the Gulf Emirates.Maierovitch insisted that the best way to fight money laundering and to protect the world economy from criminal organizations is international cooperation, if possible through the Financial Action Task Force (FATF). The group, founded in 1989, is comprised of 46 countries, including the United States, England, France, Germany, Japan, Italy and Canada.
In 1996, the Brazilian Bankers Federation (Febraban) formed a committee in order to draft a preventive policy designed to offset the legalization of illicit money through local institutions. The committee proposed the use of common procedures, massively supported by Febraban's members. Banks enforced operational measures, which have been included in their routine, and are training employees to detect irregularities. Bankers are willing to cooperate with the police and the Justice system by transmitting information to aid in restraining illicit activities within the financial system.Judge Maierovitch praised the inclusion of some articles in the money-laundering law which demand supervision by financial institutions. It means that any suspect operation must be reported to authorities within 24 hours.
The requirement applies to banks, credit card, leasing and factoring companies, besides corporations dealing with jewels, precious stones and metals, art objects and antiques.
Those who do not comply with the law will be subject to penalties varying from a simple warning to the cancellation of authorization to operate.