Widely used in cross-border operations, the Central Bank of Brazil is now considering “Remessas de Pequeno Valor” a loophole and will begin to apply controls to prevent fraud and guarantee compliance with money laundering prevention practices
As presented and discussed by Valor Econômico, the Central Bank of Brazil (Banco Central) met last week with all the Brazilian independent exchange brokers to launch a new remote fiscalization system. The system aims to prevent fraud and improve the controls in the foreign exchange market, especially in low-value transactions that have simplified procedures.
“Some players wrongly declare every remittance as Merchandise on purpose. This prevents them from paying Withholding Taxes when they transfer funds abroad”, said Philipp Bock, CEO of allpago international.
The Central Bank of Brazil has heavily invested in technology to remotely supervise the market. The development of software and methodologies seek to control the entire financial system and not only the foreign exchange market.
The new system named Siscom will link the information captured by the brokers with the data available in the Central Bank of Brazil. According to one of the participants of the meeting at which the measure was announced, the main idea is to guarantee the compliance with money laundering prevention practices.
According to one broker director, there is a real “loophole”. Fraudulent currency exchanges transactions and fictitious remittances are often classified as “Remessas de pequeno valor” to keep it off the Central Bank of Brazil’s radar.
In accordance with the regulation, operations up to the equivalent of US$ 10.000 are made by the simplified exchange. Until the end of July this limit was US$ 3.000. A currency buyer only needs to present the CPF (Brazilian Social Security Number) to close a currency exchange contract. This simplified procedure allows exchanging large volumes of currencies without a detailed record.
The brokers have already received the first forms to be filled and have to return them to the Central Bank of Brazil within 30 days. If the inspection finds criminal evidences, the Central Bank of Brazil will refer the cases to the Prosecution Service of the Union (Ministério Público) and the Federal Police (Polícia Federal).
allpago international (www.allpago.com) provides a full-spectrum of payment services in the LATAM region. allpago works as a payment gateway, a white label payment service provider (PSP) or a product and service reseller for merchants and payment service providers interested in the LATAM markets.
allpago’s features include one-click payments, recurring payments, instalments, dynamic descriptor and mobile payment solutions. The company’s html 5.0 code allows multiscreen and is as easy to implement into the store through the “plug and pay” feature. Furthermore, the company offers a fully integrated Risk Management Solution with more than 70 checks. allpago has recently become the first LATAM payment solution provider of the Merchant Risk Council (MRC).
Current clients include Art.com, Busuu.com, McAfee, Teamviewer, Twoo.com and many other leading payment or digital companies from various sectors.
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