With each news story about a cryptocurrency scam or a new scandal involving celebrities associated with sports betting companies, the popular Bets, the feeling is that the criminal underworld is many steps ahead of the civilized world in its strategies for transforming illegally obtained resources into assets that appear to be legitimate, the so-called money laundering.
Ultimately, given the clamor from the business world for innovations that lead to the emergence and spread of mechanisms like cryptocurrencies, and the popular clamor for the possibility of combining the useful (making money) with the enjoyable (trusting your favorite team) in betting, how can we monitor the occurrence of thousands of transactions every minute to prevent all this goodwill from being used to finance criminal activities and terrorism, for example?
In Brazil, Law No. 9,613 of 1998, known as the Money Laundering Law, is the legal basis that defines the crime and establishes severe penalties for those involved. Furthermore, it created the Council for the Control of Financial Activities (COAF), responsible for receiving reports of suspicious transactions and producing financial intelligence to combat this type of crime.
In turn, the Central Bank acts directly within the Brazilian System for the Prevention and Combat of Money Laundering and the Financing of Terrorism (PLD/FT). It regulates the rules for financial institutions to implement PLD/FT policies, monitoring and overseeing their adherence and applying administrative sanctions when necessary. Furthermore, the Central Bank maintains the National Financial System Customer Registry (CCS) and reports suspicious activities to the COAF (Council for Financial Activities Control) and the Public Prosecutor's Office.
But in practice, technology is key to preventing money laundering. Advanced data analysis tools allow financial institutions to detect patterns of suspicious activity and identify potential cases. The implementation and integration of specialized software is recommended to improve detection efficiency and strengthen compliance and internal audit processes.
One of the fundamental requirements in this regard is that financial institutions have a deep understanding of their clients. This involves conducting a complete identification of all parties involved in financial transactions, both individuals and legal entities. The KYC process is not limited to just collecting documents; it also includes verifying the origin of funds and continuously analyzing transactions to identify suspicious behavior.
Concerned about this issue, Febraban will hold the 14th edition of the Congress on Prevention of Money Laundering and Terrorist Financing (PLDFT) in São Paulo between October 15th and 16th, considered the largest event on the subject in Brazil. Not surprisingly, this year's central theme will be "Integrated approach between control areas".
The program will allow for reflection on sensitive and strategic topics, not only for banks, but for society as a whole, which ends up being threatened by this practice in one way or another.
Some of the topics already defined include: "Challenges in the interaction of Financial Intelligence Units", "Strategic actions to combat and prevent illicit activities", "Use of artificial intelligence in AML/CFT", "Sports betting and its impacts" and "Socio-environmental crimes – slave labor, money laundering and corruption".
As we can see from the breadth of the discussions, it becomes completely utopian to imagine that a new law or a new technological solution alone will be able to meet the challenge.
In this scenario, the sharing of information and integrated technologies is the only way to strengthen the fight against financial crime and mitigate the risks associated with money laundering, ensuring compliance with current regulations.
