Brazilian banks have begun enforcing new compliance rules to detect and shut down accounts linked to illegal betting, proxy operations and money laundering.
The measures, announced by the Brazilian Federation of Banks (Febraban), apply to all institutions under its self-regulation system and are aimed at curbing criminal use of the financial network.
Under the new framework, Febraban stated that banks are required to identify and close "straw man" accounts, those opened under another person's name and "cold" accounts that have been created without the knowledge or consent of the supposed holder.
Financial institutions must also block accounts belonging to betting operators not authorized by the Secretary of Prizes and Betting of the Ministry of Finance and report the cases directly to the Central Bank, allowing for information sharing across the sector.
Febraban President Isaac Sidney described the initiative as "a landmark step to eliminate toxic relationships between banks and clients who rent or sell their accounts to criminals."
He added that "banks cannot allow the opening or maintenance of fake accounts or those linked to illegal betting."
The new rules mandate rigorous internal policies, active fraud monitoring and cooperation among legal, compliance and anti-money laundering divisions.
Non-compliance may lead to disciplinary actions, ranging from formal warnings to exclusion from the federation's self-regulatory framework.
The initiative follows a federal police operation which uncovered a multibillion-real money laundering scheme involving organized crime and several front companies, including operators.
The move also comes amid growing Government scrutiny of financial transactions linked to betting and organized cybercrime.
Brazil recently enacted rules banning social welfare beneficiaries from gambling online
