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Brazil: Provisional Measure Creates Financial Intelligence Unit

(Sept. 5, 2019) On August 19, 2019, Brazilian president Jair Bolsonaro enacted Provisional Measure No. 893 (Medida Provisória No. 893, de 19 de Agosto de 2019), which transforms the Financial Activities Control Board (Conselho de Controle de Atividades Financeiras, COAF) into the Financial Intelligence Unit (Unidade de Inteligência Financeira).

The Provisional Measure makes the Financial Intelligence Unit responsible for producing and managing financial intelligence information to prevent and combat money laundering, terrorist financing, and the financing of the proliferation of weapons of mass destruction, as well as to promote institutional dialogue with agencies and relevant national, foreign, and international entities. The powers assigned to COAF under the legislation currently in force are to be transferred to the Financial Intelligence Unit.

The Provisional Measure provides that the Financial Intelligence Unit, which is administratively linked to the Central Bank of Brazil (equivalent to the US Federal Reserve), has technical and operational autonomy and operates throughout the national territory. Moreover, the Provisional Measure requires that the Ministry of Economy and the Ministry of Justice and Public Security provide the necessary technical and administrative support for the functioning and operation of the Financial Intelligence Unit until otherwise provided for in an act of the executive branch or a joint act of the ministries involved. (Provisional Measure No. 893, art. 2, §§ 1–2; art. 3; art. 14.)

Provisional Measures

Article 62 of the Brazilian Constitution (Constituição da República Federativa do Brasil) provides that in relevant and urgent cases, the president of the republic may adopt provisional measures that have the force of law. Such measures must be submitted immediately to the National Congress.

Provisional measures may not be enacted with respect to

  • nationality, citizenship, political rights, political parties and electoral law;
  • criminal law, criminal procedure and civil procedure;
  • organization of the Judiciary and the Public Prosecutor’s Office, as well as the careers and guarantees of their members; and
  • multi-year plans, budgetary directives, the budget, and additional and supplementary credits, except as provided for in article 167, § 3 of the Constitution;

In addition, provisional measures may not be enacted for matters

  • that deal with the detention or sequestration of property, popular savings, or any other financial assets;
  • that are reserved for supplementary law; and
  • that have already been regulated in a bill approved by the National Congress that is awaiting approval or veto of the president of the republic.

Except as provided for in sections 11 and 12 of article 62 of the Constitution, provisional measures lose their effectiveness as of the day of their issuance if they are not converted into law within a period of 60 days, which may be extended once under the terms of section 7 of article 62 of the Constitution for an equal period of time. (Const. art. 62, §§ 1, 3.)