Brazil eyes offshore cash in bid to boost gov’t revenue

PSDB amendment in Lower House cuts Speaker Cunha out of deal, but Senate still has final say

BRASILIA — The Lower House of Brazil’s Congress has approved a controversial amnesty bill for undeclared offshore assets, despite criticism from opposition lawmakers who say it would allow the laundering of illegally gained money.

To reduce its budget deficit, President Dilma Rousseff’s government is hoping to raise 11 billion reais (US$2.9 billion) by offering amnesty from prosecution to Brazilians, if they bring unreported foreign funds home and pay a 30-percent fine. A last-minute amendment however blocked politicians from benefitting.

The bill passed the House by a vote of 230-213 — but it must still be approved by the Senate, where it may face complications.

In a defeat for Lower House Speaker Eduardo Cunha, who is being investigated for holding Swiss banks accounts with possible links to the Petrobras “CarWash” corruption scandal, lawmakers also passed an amendment to the bill which prohibits politicians and their familiy members from signing the programme.

Cunha finally admitted last week that the Swiss accounts were indeed his, but said the deposited funds had not come from illegal financial deals.

The amendment was drafted by the biggest opposition force the Brazilian Social Democratic Party (PSDB), which only a few days before had asked Cunha to step down from his post until the investigation into his offshore accounts had concluded.

Witnesses in the chamber claimed an angry Cunha called the PSDB “ungrateful” and said the party had “thrown away its chance to impeach the president.”

Leader of the Solidariedade party Paulo Pereira da Silva, who has also submitted an impeachment request against Rousseff, said the PSDB had “pushed Cunha back into the government’s hands.”

Rousseff’s cash-strapped government sees the fine as a way to raise revenue, and the funds as a source of new investment in Brazil.

New revenue would allow the government to ease the cuts it believes necessary to pull the world’s seventh-largest economy out of its worst recession in at least 25 years. The government says it could lure back as much as US$150 billion in unreported assets held in tax havens and secret accounts.

In the Senate the bill could run into trouble for being too lenient on tax dodgers and other law breakers. Some critics say the bill allows the laundering of bribe money from the massive corruption scandal at Petrobras that prosecutors are trying to trace to the secret bank accounts in Switzerland and offshore financial havens.

Passage in the Senate may have been made easier by the approval of an amendment to the bill in the House that lets money declared in the amnesty to be used as evidence in criminal cases if it is related to an investigation or charge based on other sources of information, the GloboNews TV network said.

A previous version of the bill debated in the Senate would have allowed beneficiaries to come clean if they disclosed the origins of their funds and paid a 35-percent penalty. Tax evasion and currency fraud would be overlooked as long as beneficiaries had not been convicted.

The Lower House bill set a more favourable exchange rate for repatriation and widened the amnesty for crimes, such as money-laundering and slush funds.

“This bill will legalize the biggest laundry in the world for dirty money. It is a slap in the face for honest Brazilians who pay their taxes,” Congressman Wherles da Rocha of the PSDB told the House.

Abortion protest

The Brazilian womens’ rights organization Artemis yesterday claimed a new abortion bill awaiting a Senate vote to become law is unconstitutional and made an official complaint to the Organization of American States (OAS) yesterday.

Thousands of women protested yesterday in various Brazilian cities holding signs reading slogans such as: Minho corpo, minhas regras (My body, my rules).

The controversial bill, known in Brasil as the PL 5069, was drafted by Lower House Speaker Cunha. It was approved by the Justice and Constitution Committee (CCJ) on October 21 and limits access to legal abortions for victims of sexual violence.

In also reintroduces the need for a forensic examination to establish whether or not the victim has suffered sexual violence before receiving medical treatment, and removes mandatory service access to the morning-after pill.

Womens’ rights activists yesterday called for Cunha’s resignation, branding the proposed law “retrogressive.”

Atemis accuses the CCJ, Cunha and other deputies behind passing the bill in the Lower House of “seriously violating womens’ human rights” and trying to “eliminate fundamental rights” from the Brazilian Constitution.

“We are asking the OAS to intervene, in a friendly way. We believe the bill is unconstitutional and we want to avoid it being sent to the Upper House,” Artemis representative Raquel Marques yesterday. “It violates international treaties. The CCJ should have rejected it at first hand.”