Brazil must redouble efforts to fight corruption, OECD official says

Brazil must continue its efforts to fight corruption, Organization for Economic Cooperation and Development Anti-Illicit Trade Expert Group Chair David Luna told MLex.

He said it's also important that the private sector become engaged in putting more pressure on the government to take the issues of corruption and money laundering more seriously.

In October 2022, the Brazilian government submitted an initial memorandum to the OECD, which is a required document for countries that intend to join the organization.

Brazil formalized its interest in becoming a member of the OECD in 2017. In January 2022, the organization sent the country an invitation letter.

In an exclusive interview with MLex, Luna said that to become an OECD member, "there are various procedures, various assessments, to make sure that, in this case, Brazil meets certain standards of the OECD in different areas."

Luna highlighted illicit trade as an important area because it “helps to destabilize communities and to increase more insecurity.”

“It fuels more corruption, more criminality that hampers economic modernization, issues of structural reform, issues of governance, transparency and regulatory efficiencies that the OECD looks to in working with a candidate like Brazil to improve its legal systems, regulatory and its governance. So the illicit trade hinders the ability to work in those areas,” he said.

During an event today* in Brazil, Luna presented a global report on hubs of illicit trade and corruption, which was organized by the Terrorism, Transnational Crime and Corruption Center.

He also said political will is a key factor. "If there's no will, it's really hard to make progress on modernizing.”

“If Brazilian leaders are truly committed to having greater enforcement to fight corruption and crime and terrorist financing, I think it just helps to increase the governance, increase the confidence of Brazilians that the government can do some good for them and their future,” he told MLex.

Additionally, Luna said “it is important as well that the private sector becomes engaged” on these issues. “To put more pressure on, in this case, [Luiz Inácio Lula da Silva], because he is the president now, on his administration to take the issues of corruption, organized crime, of criminality, of money laundering more seriously because it weakens efforts in other areas to have more prosperity, to have more development, to have more stability.”

Luna mentioned a draft bill that was presented by the Brazilian federal Senator Sergio Moro that proposes to establish a whistleblower program enforced by Brazil's Securities and Exchange Commission (CVM) in the securities market.

The draft bill also proposes "instruments of protection, incentives and rewards for whistleblowers of illicit crime in the securities market, or in publicly traded corporations”.

Luna said such an initiative is significant and well regarded by the organization. “That's something that I think the OECD really cares about,” Luna said.

In addition to encouraging government leaders, Luna said it's necessary to address the issue of enablers. “That includes the lawyers, banks, to be able to fight the money laundering and corruption war.”

“Those are areas that the OECD is very concerned about for any member state, but certainly for countries like Brazil, to make improvements in their good governance,” he added.

Luna also said public-private partnerships can “play a leading role in pushing for better reforms, for better laws, and for more regulatory enforcement.”

“I think Brazil makes progress in some areas, and sometimes it takes steps backwards, but they need to continue to redouble efforts to fight corruption,” he concluded.

*"5th IPLD International Congress," Institute for the Prevention and Combat of Money Laundering and Terrorism Financing (IPLD), Brazil, May 23-24, 2023.