The analysis of an investigation opened a decade ago into an alleged ‘horse money changer’ and an irregular equine import scheme could lead the Federal Supreme Court (STF) to limit, in a judgment this Thursday, the sharing of financial intelligence reports for investigations across the country.
The STF will judge the action in which minister Alexandre de Moraes, rapporteur, determined that the Financial Activities Control Council (Coaf) can only provide reports when criminal investigations have already been initiated or administrative and judicial proceedings of a sanctioning nature.
The decision that will impact investigations across the country comes from a specific case that dates back ten years ago, in the so-called Operation Impure Blood.
At the time, the name of an alleged ‘horse money changer’ emerged amid investigations into the irregular importation of horses landed at Viracopos International Airport in Campinas.” According to the MPF, the scheme resulted in revenue losses of R$160 million.
In 2018, he became the subject of a police investigation for alleged currency evasion and, the following year, he was the target of searches. According to the Federal Public Ministry, he would be responsible for payments abroad to exporters and transporters of imported horses, with underinvoicing of prices.
The Prosecutor’s Office maintained that the ‘money dealer’ had been involved in importing horses and mares such as Cancelier Van de Boswinning, Dingo, Watja, Abernante and Deuly Z.
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The alleged money changer’s defense questioned the investigation in court, arguing that the investigation had used a financial intelligence report, produced by Coaf at the request of the Federal Public Ministry, as the starting point of an accusation. According to the lawyers, there was no police investigation before the request and, therefore, the investigation would be illegal.
The case ended up at the Superior Court of Justice (STJ), which blocked the investigation and annulled the evidence against the alleged ‘horse money changer’. The Court recognized that the Coaf report was requested before the formal opening of the investigation and thus understood that there was, in this case, a fishing expedition, an undue “fishing” for evidence.
The Federal Public Ministry appealed and the case reached the STF. The Prosecutor’s Office maintains that providing financial intelligence reports only after the formal opening of investigations “excessively limits” the body’s investigative powers. The MPF says that the MP’s “investigative measures” cannot be conditioned on the prior opening of a police investigation.
The Supreme Court recognized that the judgment of the ‘horse money changer’ case would impact ongoing investigations throughout the country. Therefore, Moraes determined, in August last year, the suspension of all pending processes that involved the discussion on the validity of financial intelligence reports when requested before the opening of a police investigation.
In March, the Attorney General’s Office gave its opinion on the case, arguing that the Supreme Court reinforces the understanding that the spontaneous sharing of financial intelligence reports is permitted and also establishes that such transfer of information can occur regardless of whether or not there is an open police investigation into the matter.
According to the body, only a formal investigative procedure should be required, as well as respect for confidentiality and certification of the recipient of the information, with “effective instruments for investigating and correcting any deviations”.
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Twenty days after the opinion, Moraes handed down the decision that limited the sharing of RIFs. The order generated repercussions because it also dealt with the sharing of Coaf data with Parliamentary Commissions of Inquiry, amid the impasse between the Supreme Court and the CPIs on Organized Crime and INSS fraud.
The STF has already decided on the sharing of RIFs prepared by the Financial Activities Control Council in 2019. At the time, the Supreme Court gave approval for the spontaneous sharing of financial intelligence reports with investigative bodies, regardless of a court decision.
Now, the STF will decide whether to reiterate the permission to share the reports without judicial authorization and also the moment in which the information should be passed on.
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