Brazil Considers Revival of Fintech Reporting Regulations Amidst…

Brazil is contemplating reintroducing fintech reporting rules to combat money laundering, as concerns arise regarding lesser-known payment institutions. Robinson Barreirinhas noted the need for improved account opening controls and the suspension of earlier plans due to public backlash. The tax revenue service remains focused on targeting financing for organized crime.

Brazil is considering resuming discussions on imposing reporting requirements for financial technology companies to the country’s tax revenue service. Robinson Barreirinhas, the head of the tax agency, expressed concerns during a Senate hearing about indications that lesser-known payment institutions are being misused for money laundering activities.

Barreirinhas emphasized that the tax revenue service possesses intelligence capabilities for tracking transactions, which it aims to extend to fintechs. Previously announced plans for such measures had been suspended due to public backlash. He stated, “I don’t want to demonize fintechs … but the truth is that many end up being used (for illicit transactions) due to the ease of opening accounts.”

In September, a rule was introduced requiring fintechs to report transactions, including those made via the popular Pix instant payment system. This requirement was aligned with obligations for traditional banks and set to commence in January. However, opposition to President Luiz Inacio Lula da Silva’s government accused the administration of attempting to impose additional taxes on citizens, leading to the suspension of this measure amid declining approval ratings.

Barreirinhas reiterated concerns about various forms of organized crime financing within Brazil, particularly relating to smuggled goods, cryptocurrencies, and online gambling activities within the region, exacerbating issues tied to public security and economic integrity.

In conclusion, Brazil is reassessing its stance on reporting requirements for fintechs in light of money laundering concerns, particularly in connection with lesser-known payment institutions. While there was an attempt to enforce reporting similar to banks, public resistance led to a suspension of these efforts. The tax revenue service remains vigilant, particularly with organized crime threats linked to various illegal activities.

Original Source: www.marketscreener.com