Committee approves transfer of the Control Council of Financial Activities to the Central Bank
1 noviembre 2019

On October 30, the ‘Mixed Committee’ passed a proposed Executive’s measure under which the Control Council of Financial Activities (Coaf) will be transferred from the Ministry of Economy to the Central Bank. The Chamber of Deputies is expected to debate the measure in the coming weeks, which will then be discussed in the Senate.

The government, through this measure, proposed changing the name of the Coaf to the Financial Intelligence Unit (FIU), and it proposed removing the obligation for the Council Against Money Laundering to be composed exclusively of public officials. The Committee, however, restored the Coaf name in its report and also modified the organizational structure outlined in the original text.

According to the approved text, the board will be composed of permanent officials linked to key economic areas, such as the Federal Revenue Service and the Brazilian Securities and Exchange Commission (CVM). In addition, the organization and functioning of the Coaf, including its structure, competencies and responsibilities of the presidency, the plenary and the technical staff, will be defined in its internal regulations, which must be approved by the collegiate board of the Central Bank.

Although in Brazil these kinds of executive measure have the force of law from the moment they are published in the Official Gazette, after that Congress has up to 120 days to ratify them, approving the text sent by the government or modifying its content. The modifications introduced will have to be ratified in the plenary of both chambers. 

On the other hand, we inform you that the Senate approved the appointment of Fabio Kanczuk as Director of Economic Policy of the Central Bank. His designation comes after Carlos Viana de Carvalho left office “for personal reasons”. Kanczuk is an electronic engineer with a doctorate in economics from the University of California, Los Angeles. In 2018, he was executive director for Brazil and eight other World Bank countries.