Brazil lower house passes amnesty for unreported offshore assets
BRASILIA, Nov 11 (Reuters) – The lower house of Brazil’s Congress approved amnesty for undeclared offshore assets on Wednesday despite criticism from opposition lawmakers who said 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 ($2.9 billion) by offering amnesty from prosecution to Brazilians if they bring unreported foreign funds home and pay a 30 percent fine.
The bill passed the House by a vote of 230-213; it must still be approved by the Senate.
President Dilma 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 $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 state-run oil company Petrobras that prosecutors are trying to trace to 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 favorable 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 opposition PSDB party told the House. ($1 = 3.7661 Brazilian reais) (Reporting by Anthony Boadle; Editing by Jeb Blount and Leslie Adler)
