On May 2, 2024, Provision No. 161 (“Provision”) came into force, which amended the National Code of Standards of the National Inspectorate of Justice of the CNJ, to update the provisions related to duties to prevent money laundering and the financing of terrorism and proliferation of weapons of mass destruction (“AML/CTF”), in addition to updating the rule for cumulating notarial and registration activities with the exercise of elective office.
The updates arise from the experience accumulated with the entry into force of Provision No. 88/2019, which determined the inclusion of notaries and registrars as subjects obliged by the Financial Activities Control Council (“COAF”). Since then, there have been proposals to improve the aforementioned standard, including in the context of the 4th round of mutual evaluation of the Brazilian AML/CFT system conducted by the Financial Action Group (“FATF”) and concluded in October 2023.
The FATF, the main intergovernmental entity that sets international standards and promotes the implementation of AML/CTF measures, highlighted in its December 2023 mutual evaluation report that the notary and registrar sector demonstrate significant commitment to the AML/CTF system. However, the report highlighted major deficiencies in understanding and communicating suspicious transaction reports (“STRs”). Many of these reports do not address actual suspicions of ML/TF, indicating the need for improvements in the quality of communications.
Thus, the Provision defined "payment in kind" as paper currency notes and increased the base value for mandatory communications to COAF BRL 30,000 to BRL 100,000. Communications must include the justification of the reasons that indicate the practice of ML/TF or a related offense, relevant data from the case and indication of sources. This change aims to reduce the number of unused communications and allow COAF to pass on more consistent information to criminal investigation bodies, the Public Prosecutors Office and the judicial police.
If no suspicious operation is identified, notification of non-occurrence will be required by January 31st of the following year. Finally, notaries and registrars must adopt policies, procedures and internal controls guided by a risk-based approach to ML/TF, aiming for effective mitigation.
Our Compliance, Investigation, and White-Collar practice group is available to assist you and clarify any doubts regarding this new Provision.