Institutions that are regulated by the Central Bank of Brazil take note. Effective July 1, 2020, the Central Bank of Brazil is increasing the record retention periods related to many Anti-Money Laundering (AML) and terrorist financing activities to 10 years. By moving from 5 to 10 years, this change sets Brazil on the high end of the global AML standard. See below for details and action items.
Significance of Change
For financial institutions, the AML record retention requirement often impacts and drives the retention period for the “client transactions” and “account” categories of records. Because these categories often contain personal information, most companies are avoiding over-retaining these records. As a result, this AML law will likely set the retention period for Brazil.
Details: Document Types and Retention Periods
As outlined in Circular 3,978, institutions that are regulated by the Central Bank of Brazil should retain the following documents for the corresponding minimum retention periods:
- Information collected in the know your customer procedures | keep for 10 years counting from the first day of the year following the end of the relationship with the customer;
- information collected in the procedures intended to know employees, partners, and providers of outsourced services | keep for 10 years counting from the date of termination of the contractual relationship;
- registration of transactions, transactions carried out, products and services contracted, withdrawals, deposits, contributions, payments, receipts or transfers, payment and receipt of transactions and transfers of funds, and In-Kind Transactions | keep for 10 years counting from the first day of the year following that when the transaction was performed;
- the dossier of the analysis of transactions and situations selected by means of monitoring and selection procedures in order to characterize them, or not, as suspicious money laundering and terrorist financing activities | keep for 10 years;
- the contract between the authorized institution and one not authorized by the Central Bank, allowing for a payment arrangement and which requires that the identification of the final recipients of funds to be set forth in contract, for the purposes of AML | keep for 5 years after the end of the contractual relationship;
- the know-your-customer procedures manual; the procedures for monitoring, selecting and analyzing suspicious transactions and situations manual; the procedures aimed at knowing the employees, partners, and providers of third-party services; previous versions of the assessment report of effectiveness; the data, records and information regarding the follow-up and control mechanisms; the action plan and respective follow-up report | keep for 5 years.
If you are regulated by the Central Bank of Brazil, be sure to update your retention periods for the relevant categories of records. Zasio’s Versatile Retention software is a great way to stay up to date on new and updated laws, as well as to manage retention schedules. If you need help setting up or maintaining your retention schedule considering ever-changing laws like this one, contact Zasio today.
Disclaimer: The purpose of this post is to provide general education on Information Governance topics. The statements are informational only and do not constitute legal advice. If you have specific questions regarding the application of the law to your business activities, you should seek the advice of your legal counsel.