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Conformity assessments of transactions involving artists’ or athletes’ rights to start in Brazil
The 2024 Electronic Conformity Assessment will address AML/CFT compliance from August 5
On August 5, 2024, Brazil’s Financial Activities Control Council (Coaf) will start running the 2024 Electronic Conformity Assessment (Avec), an automated inspection mechanism for measuring the extent to which supervised entities have complied with obligations to prevent money laundering, the financing of terrorism and the proliferation of weapons of mass destruction (AML/CFT).
The Avec will target natural and legal persons whose work involves the promotion, intermediation, sale, agency, or negotiation of artists’ or athletes’ transfer rights in Brazil.
Rather than being designed to sanction supervised entities, the Avec seeks to help guide them in meeting their obligations. At the same time, the Avec’s results do form part of the criteria Coaf uses to select future targets for preliminary investigations. In other words, although Coaf does not apply sanctions as a direct result of the Avec, it may still lead to the following consequences:
- Coaf assessing whether the supervised entities have adopted adequate controls;
- Coaf assessing whether lower-risk inadequacies exist. If so, supervised entities will need to implement Coaf’s recommendations without the need for subsequent monitoring;
- Coaf assessing whether there are higher-risk inadequacies, which will result in an official notification with recommendations that will be monitored. In such cases, Coaf will provide a deadline for the adjustments to be implemented. After this deadline, a new Avec form will be sent for the supervised entity to fill out.
Coaf will send the 2024 Avec via the Financial Activities Control System (Siscoaf). It is therefore important that the obligated entities are aware of notifications generated in the system, as there is a deadline for acknowledging, completing and sending responses. Step-by-step instructions can be found in the Electronic Conformity Assessment Completion Guide (available in Portuguese).
Natural and legal persons involved in the promotion, intermediation, sale, agency, or negotiation of artists’ or athletes’ transfer rights must comply with the provisions of Coaf Resolution No. 30/2018.
For more information, please contact Mattos Filho’s Compliance & Corporate Ethics and Entertainment practice areas.
