Circular No. 3.858

The Collegiate Board of the Central Bank of Brazil, in a session held on 14 November 2017, based on the provisions of art. 13 of Law No. 9.613, of 3 March 1998, and on art. 14, sole paragraph, of Decree No. 2.799, of 8 October 1998, and taking into account the provisions of arts. 9 to 12 of the aforementioned Law,

R E S O L V E S :

CHAPTER I

PRELIMINARY PROVISIONS

Art. 1 This Circular provides for the parameters for the application of the administrative penalties referred to in art. 12 of Law No. 9.613, of 3 March 1998.

Art. 2 The provisions of this Circular apply:

• I - to financial institutions;

• II - to the other institutions supervised by the Central Bank of Brazil and to the members of the Brazilian Payment System; and

• III - to the natural person who acts as administrator of an institution mentioned in items I and II.

CHAPTER II

ON THE PENALTIES

Section I

On the Types of Penalties

Art. 3 The following penalties apply, cumulatively or not, to the persons referred to in art. 2 of this Circular, who commit an infraction provided for in Law No. 9.613, of 1998:

• I - warning;

• II - variable pecuniary fine, not exceeding:

  • a) twice the value of the operation;

  • b) twice the actual profit obtained or that presumably would be obtained by carrying out the operation; or

  • c) the amount of R$20,000,000.00 (twenty million reais);

• III - temporary disqualification, for a period of up to ten years, from holding the positions referred to in item III of art. 2 of this Circular; and

• IV - revocation of authorization to carry out activity, operation or functioning.

§ 1 Irregularities in compliance with the instructions referred to in items I and II of art. 10 of Law No. 9.613, of 1998, may subject those responsible to the penalty of warning.

§ 2 Temporary disqualification shall be applied when the infraction is considered serious or when specific recidivism occurs, duly characterized in an infraction previously punished with a fine.

§ 3 Revocation of authorization shall be applied in cases of specific recidivism of infractions previously punished with temporary disqualification.

§ 4 For the purposes of this Circular, specific recidivism occurs when the agent commits a new infraction of the same nature after having been punished by virtue of a final administrative decision, unless three years have elapsed from the compliance with the respective punishment or the extinction of the penalty.

Section II

On the Application of Penalties

Art. 4 In the application of the penalties mentioned in art. 3 of this Circular, the base penalty shall initially be set, considering in its calculation, to the extent that they can be determined:

• I - the economic capacity of the offender;

• II - the degree of harm, or danger of harm, to the National Financial System, the Consortium System, the Brazilian Payment System, the institution itself or third parties;

• III - the reprehensibility of the offender's conduct;

• IV - the amounts of the irregular operations; and

• V - the duration of the infraction.

Art. 5 The following are circumstances that aggravate the penalties of fine and disqualification, when they do not constitute autonomous infractions:

• I - systematic or repeated practice;

• II - the representativeness of the irregular operations; and

• III - the advantage obtained or intended by the offender.

§ 1 The penalty of fine shall be increased by 20% (twenty percent) for each aggravating factor verified.

§ 2 The penalty of disqualification shall be increased by one year for each aggravating factor verified.

Art. 6 The following are circumstances that mitigate the penalties of fine and disqualification:

• I - the collaboration of the offender that results in the identification of the other parties involved in the infraction, if applicable, and in obtaining information and documents that prove the commission of an infraction punishable under the legislation in force, provided that they are not previously known to the Central Bank of Brazil;

• II - the offender's antecedents; and

• III - the regularization of the conduct before its detection by the Central Bank of Brazil, so as to avoid or mitigate the consequences of the infraction.

§ 1 The incidence of mitigating circumstances does not result in the decharacterization of the gravity of the conduct.

§ 2 The penalty of fine shall be reduced by 20% (twenty percent) for each mitigating circumstance verified.

§ 3 The penalty of disqualification shall be reduced by one year for each mitigating circumstance verified.

§ 4 The mitigating circumstance provided for in item I of the caput of this article shall not be applied in the dosimetry of the penalty of the accused who has entered into an administrative agreement in a supervision process referred to in art. 30 of Law No. 13.506, of 13 November 2017, regarding the facts addressed in the process.

Art. 7 If the occurrence of the infraction has contributed to leading to the application of recovery measures referred to in Resolution No. 4.502, of 30 June 2016, of the measures provided for in art. 5 of Law No. 9.447, of 14 March 1997, or to the decreeing of any of the regimes provided for in Law No. 6.024, of 13 March 1974, and in Decree-Law No. 2.321, of 25 February 1987, the penalty shall be increased by up to 100% (one hundred percent).

Art. 8 In the calculation of the penalty to be applied, the following shall apply, in this order:

• I - the aggravating circumstances;

• II - the mitigating circumstances; and

• III - the cause of increase provided for in art. 7 of this Circular.

§ 1 In the occurrence of aggravating circumstances, mitigating circumstances or concurrence of both, the increase or decrease of the penalty may not exceed half of the value or term set for the base penalty.

§ 2 When the application of the aggravating circumstances, the mitigating circumstances and the cause of increase of penalty results in a fractional period of disqualification, the final term of the penalty shall be rounded to the whole number of years immediately lower.

Art. 9 The sum of the penalties of fine applied in a single administrative sanctioning process shall be limited:

• I - for legal entities, to the highest value among:

  • a) 25% (twenty-five percent) of the share capital, when applicable, obtained from the last balance sheet available at the Central Bank of Brazil;

  • b) 50% (fifty percent) of the minimum required capital, when applicable; and

  • c) 25% (twenty-five percent) of the Net Equity (PL), obtained from the last balance sheet available at the Central Bank of Brazil; and

• II - for individuals, to the amount of R$5,000,000.00 (five million reais).

CHAPTER III

ON ADMINISTRATIVE INFRACTIONS

Section I

On Customer Identification and Record Keeping

Art. 10. The base fine penalty applicable to irregularities related to customer identification, registration updating, and maintenance of transaction records, as addressed in items I and II of art. 10 of Law No. 9,613 of 1998, shall be:

• I - R$250,000.00 (two hundred and fifty thousand reais) to R$1,000,000.00 (one million reais); and

• II - R$500,000.00 (five hundred thousand reais) to R$2,000,000.00 (two million reais) when it constitutes a serious infraction.

Section II

On Policies, Procedures, and Internal Controls

Art. 11. The base fine penalty applicable to irregularities related to policies, procedures, and internal controls for money laundering prevention (PLD), as addressed in item III of art. 10 of Law No. 9,613 of 1998, shall be:

• I - R$500,000.00 (five hundred thousand reais) to R$3,000,000.00 (three million reais); and

• II - R$1,000,000.00 (one million reais) to R$6,000,000.00 (six million reais) when it constitutes a serious infraction.

Section III

On Communications

Art. 12. The base fine penalty applicable to irregularities related to communications addressed in art. 11 of Law No. 9,613 of 1998 shall observe the following limits on the total value of operations subject to communication:

• I - in the case of communication carried out inadequately or outside the deadline, regarding operations that exceed the limit set by the Central Bank of Brazil based on art. 10, item II, of Law No. 9,613 of 1998, of:

  • a) 1% (one percent) to 2% (two percent); and

  • b) 2% (two percent) to 4% (four percent), when it constitutes a serious infraction;

• II - in the case of non-communication of operations that exceed the limit set by the Central Bank of Brazil based on art. 10, item II, of Law No. 9,613 of 1998, of:

  • a) 2% (two percent) to 5% (five percent); and

  • b) 3% (three percent) to 6% (six percent), when it constitutes a serious infraction;

• III - in the case of communication carried out inadequately or outside the deadline, regarding proposals or operations that contain indications of the crimes provided for in Law No. 9,613 of 1998, or that relate to them, of:

  • a) 5% (five percent) to 7% (seven percent); and

  • b) 6% (six percent) to 8% (eight percent), when it constitutes a serious infraction;

• IV - in the case of persons referred to in item III of art. 2 of this Circular failing to abstain from giving notice of the communication act to other persons, including those subject to the communication, of:

  • a) 7% (seven percent) to 9% (nine percent); and

  • b) 8% (eight percent) to 10% (ten percent), when it constitutes a serious infraction; and

• V - in the case of non-communication of proposals or operations that contain indications of the crimes provided for in Law No. 9,613 of 1998, or that relate to them, of:

  • a) 10% (ten percent) to 15% (fifteen percent); and

  • b) 15% (fifteen percent) to 20% (twenty percent), when it constitutes a serious infraction.

Art. 13. The base fine penalty applicable to irregularities in the communication about the non-occurrence of communicable operations, as addressed in art. 11, item III, of Law No. 9,613 of 1998, shall observe the following gradation:

• I - in the case of carrying out the communication provided for in the caput outside the deadline or in disagreement with the form and conditions established by the Central Bank of Brazil, of:

  • a) R$20,000.00 (twenty thousand reais) to R$50,000.00 (fifty thousand reais); and

  • b) R$30,000.00 (thirty thousand reais) to R$80,000.00 (eighty thousand reais), when it constitutes a serious infraction; and

• II - in the case of omission of the communication provided for in the caput, of:

  • a) R$50,000.00 (fifty thousand reais) to R$100,000.00 (one hundred thousand reais); and

  • b) R$60,000.00 (sixty thousand reais) to R$150,000.00 (one hundred and fifty thousand reais), when it constitutes a serious infraction.

Section IV

On Serious Infraction

Art. 14. Serious infractions are those infractions that produce or may produce any of the following effects:

• I - contribute to the distortion of the purposes of the instruments and operations used within the scope of activities subject to the supervision of the Central Bank of Brazil;

• II - cause damage to the image of the institution or the segment in which it operates;

• III - contribute to generating indiscipline in the financial market or to affecting the stability or regular functioning of the National Financial System, the Consortium System, or the Brazilian Payment System;

• IV - severely affect the continuity of activities or operations within the scope of the National Financial System, the Consortium System, or the Brazilian Payment System; and

• V - contribute to stimulating irregular conduct in the segment.

Sole paragraph. Also constitute serious infractions those infractions committed through fraud or simulation.

Section V

On Disqualification and Revocation Penalties

Art. 15. The base disqualification penalty shall be set in whole number of years and shall observe the following gradation:

• I - disqualification of three to five years, in the case of irregularities related to the carrying out, inadequately or outside the deadline:

  • a) of the communication addressed in art. 11, item II, subitem "a", of Law No. 9,613 of 1998, observing the limit set by the Central Bank of Brazil based on art. 10, item II, of Law No. 9,613 of 1998; and

  • b) of customer identification, registration updating, and maintenance of transaction records;

• II - disqualification of four to six years, in the case of irregularities related to:

  • a) carrying out, inadequately or outside the deadline, of communication of proposals or operations that contain indications of the crimes provided for in Law No. 9,613 of 1998, or that relate to them;

  • b) failure to communicate as established in art. 11, item II, subitem "a", of Law No. 9.613, of 1998, observing the limit set by the Central Bank of Brazil based on art. 10, item II, of Law No. 9.613, of 1998; and

  • c) failure to refrain from giving notice of the act of communication to other persons, including those subject to the communication;

• III - disqualification for six to 8 eight years, in the case of irregularities related to:

  • a) policies, procedures and internal controls for AML; and

  • b) failure to communicate proposals or operations that may constitute evidence of the crimes provided for in Law No. 9.613, of 1998, or that are related to them.

Art. 16. Once the penalty of revocation of authorization to operate is applied, the penalized institution shall immediately communicate the fact to its clients and shall adopt within ninety days the following measures:

• I - closure or transfer of operations and contracts exclusive to an institution supervised by the Central Bank of Brazil or of members of the Brazilian Payment System to an institution regularly authorized to operate; and

• II - change of its name and its corporate purpose, with the respective registration at the Commercial Registry and proof to the Central Bank of Brazil.

§ 1º The penalized institution shall use the available communication channels to inform its clients about the impediment to continuing with its operations at the institution, the procedures and the deadline for closure or transfer of operations.

§ 2º Any omission of measure or opposition on the part of the client in relation to the determination in item I of the caput does not prevent the adoption of the determination in item II of the caput, and the penalized institution shall be responsible for complying with its contractual obligations before third parties.

§ 3º The new corporate name to be adopted as provided in item II of the caput may not contain the original name of the institution, the trade name used by it until the date of revocation, or any expression that may indicate the exercise of activities exclusive to an institution supervised by the Central Bank of Brazil or member of the Brazilian Payment System.

CHAPTER IV

FINAL PROVISIONS

Art. 17. This Circular enters into force on the date of its publication.

Art. 18. Art. 17 of Circular No. 3.461, of 24 July 2009, is revoked.

Sidnei Corrêa Marques Director of Organization of the Financial System and Resolution