BCB Circular 3,978/2020 sets risk-based AML/CFT controls for institutions authorised by Banco Central do Brasil. Customer and beneficial-owner identification feed transaction monitoring and internal governance, with suspicious operations reported to COAF and records retained.
TL;DR:
- Authorised institutions must apply risk-based customer and beneficial-owner checks.
- Monitoring and analysis support suspicious-operation reports to COAF.
- Requires AML/CFT governance, internal controls and record retention.
Summary
Risk-based controls for BCB institutions
Circular BCB No. 3,978/2020 establishes anti-money-laundering and counter-terrorist-financing controls for institutions authorised by Banco Central do Brasil. Its framework connects institutional policy, internal risk assessment and customer due diligence with monitoring and reporting. In payments, it is relevant to covered banks and payment institutions rather than every merchant or technology supplier connected to a transaction.
Knowing customers and their risk
The Circular requires covered institutions to identify customers and beneficial owners and to understand the risks associated with their relationships and operations. A risk-based approach links the information gathered at onboarding with the controls applied afterwards. A customer record is therefore part of an ongoing process: identification, risk assessment and monitoring are connected steps rather than interchangeable checks.
Monitoring, analysis and COAF reporting
Institutions must monitor and analyse operations and report suspicious activity to COAF under the applicable framework. Payment accounts, transfers, acquiring and other customer transactions can provide relevant signals. Suspicion should not be equated with a single generic transaction threshold; the institution's risk assessment, monitoring scenarios and analysis determine how potentially unusual activity is investigated and escalated. Monitoring and a report to COAF are distinct stages of that process.
Governance and evidence
The Circular also addresses internal controls, staff responsibilities and retention of customer, risk-assessment and transaction records. These elements make the institution accountable for how its AML/CFT programme operates, including the decisions behind monitoring and reporting. Detailed procedures, record-retention periods and reporting triggers depend on the current official BCB provisions and related COAF rules, rather than a single threshold applied to every customer or transaction.
Keywords
- Circular 3978
- BCB AML
- beneficial ownership
- customer identification
- risk assessment
- transaction monitoring
- COAF reporting
- record retention
- internal controls
- staff responsibilities