Skip to content
Brazil, anti-corruption, Pandora Papers

What the Pandora Papers Reveal about Brazil

Brazil’s anti-corruption laws need an update.

Words: Ligia Maura Costa and Roberto di Cillo
Pictures: William F. Santos

The Pandora Papers, the largest cross-border investigative journalism work in history, with contributions from 600 journalists and 150 media outlets from all over the world, unveiled a legal-financial web that benefits the world’s rich and powerful from almost 200 countries. Nearly 12 million files in 2.94 terabyte of confidential information have been exposed to show transactions from 14 offshore services providers and 38 low tax jurisdictions, including the British Virgin Islands, Panama, Belize, Seychelles Islands, and Hong Kong. The Pandora Papers also leaked information on more than 2,000 Brazilians.

Many structures in low tax jurisdictions are complex and opaque. In an attempt to create transparency, the Financial Action Task Force has just proposed changes to its beneficial ownership standard, which is meant to further develop access to information about beneficial owners of organizations that include companies and trusts. Transparency International, a self-defined “global movement working in over 100 countries to end the injustice of corruption,” created a Global Corruption Barometer in 2003 to be able to better track corrupt actions, like bribes. It is, however, still hard to know how much of the wealth in or through offshore structures is linked to illegal, unethical, and illicit conducts and how much of it is not — and that will likely take some time to change globally.


The Pandora Papers cast a doubt about how seriously some countries take their anti-bribery and anti-money laundering laws and revealed an important contradiction. On one hand, there is a great deal of demand to keep pressure on those countries that are struggling with corruption and urge them to reduce it within their borders by passing and enforcing a variety of anti-bribery and anti-money laundering laws. On the other hand, there is peer pressure on the various laws themselves, ensuring that they are not too restrictive, resulting in laws that don’t have teeth to actually reduce corruption.

Another issue that the Pandora Papers revealed is the problem with registers, and how accessible they should be. Countries that historically were considered low tax jurisdictions — or tax havens — have implemented access to registers for verification of beneficial ownership. In Malta, for instance, a search of beneficial ownership costs merely 5 Euros and it can be done online. Many records are freely available in Luxembourg as well. However, in the Caribbean, the favored tax haven, searches are more costly and some systems are not fully online.


Brazil has the fifth largest group of citizens named in the Pandora Papers. The list includes Minister of Economy Paulo Guedes, the President of the Central Bank Roberto Campos Neto, and well-known business people, such as: Andrea, Eduardo, and Fernando Parrillo, owners of the Prevent Senior health plan; Luciano Hang, owner of the Havan department store chain; and Rubens Menin and his children, owners of MRV (one of Brazil’s largest real estate companies), Banco Inter (Brazil’s first digital bank), and CNN Brasil, and several others.

Revelations from the Pandora Papers have highlighted the need for a careful review of Brazil’s anticorruption and anti-money laundering laws.

What is the problem if Brazil’s Minister of Economy, his wife, and daughter were shareholders and managers of a British Virgin Islands company that owns deposits close to $10 million USD — unearthed by the Pandora Papers — while the country’s currency suffers from acute devaluation? In other words, can a Brazilian senior official, and/or his immediate family, be owners of an offshore company? To add more complexity, what if the same senior official’s office is responsible for tax benefits of investments in low tax jurisdictions, even if he/she does not manage the offshore company, as the management was delegated to a spouse or child? What if a trust or a Private Trust Company is used?

According to Brazil’s laws, it is not necessarily illegal for an individual or a legal entity to establish or keep offshore companies if investments are declared locally. Many investments of the kind may be legal even if the benefits may be ethically debatable. Yet, findings from the Pandora Papers have highlighted the need for a careful review of Brazil’s anticorruption and AML laws.

Brazil’s Clean Company Act, for example, deals with conflicts of interest and the use of privileged information. Senior officials must “avoid or prevent possible conflicts of interest and safeguard privileged information,” and that includes a duty to refrain from acting “in the interest of a legal entity in which they, their spouses, partners or relatives are part of (…), and that may benefit from or influencing their acts.” The 1992 Administrative Improbity Act has changed it for a softer version by Brazil’s Congress where liability will heavily depend on a showing of a Brazilian version of willful misconduct.

Although Brazil’s Minister of Economy had declared the offshore company before he took office to local authorities, as requested by domestic legislation, he sits on the National Monetary Council, which has broad authority over the country’s economic policies. Importantly, the Code of Conduct for Senior Officials of 2000 prohibits investing “in assets whose value or price may be affected by a governmental decision or policy” due to the position held and the fact that they have privileged information (Article 5 § 1 Code of Conduct for Senior Officials of 2000). More recently the press reported that the Minister of Economy had disclosed his resignation as manager of the BVI company he still owns, but there was nothing quite as clear about a continuing role played by his wife or daughter after he took office in 2019.


Brazil, of course, is just one country that is grappling with the findings of the Pandora Papers. Brazil’s case highlights, however, four important questions that need to be asked at the global level.

The first question is about the potential for conflicts of interest. Shouldn’t the government have more tools in place to ensure that conflicts of interests are revealed? Laws are never enough but legislation with simple and clear implementation mechanisms, and appropriate sanctions and penalties, should be a priority, especially in Brazil.

Second, what requirements were made, enforced, and applied at the low tax jurisdictions named in the Pandora Papers? Another focused investigation is needed.

Third, did the organizations named in the Pandora Papers conduct any kind of due diligence of its members, especially governmental officials and their immediate family members, including spouses and children? In other words, did these organizations address the various conflicts of interest? And if so, how? More information about the due diligence process would be helpful in better understanding how so many political figures could be able to get away with immoral or even illegal activity for so long, and the institutional mechanisms they used to do so.

The fourth question, in connection with the previous one, is about the celebrated acronym KYC or “Know Your Customer” that financial services and other industries have used for decades to prevent money-laundering. KYC became particularly important after the Sept. 11 attacks, where counterterrorism and illicit financing caught the world’s attention. The revelations of the Pandora Papers, however, raises the question: Was the policy just for show and an attempt to hide ownership of shell and other questionable companies by prominent individuals? After all, the financial sector claimed to “know” the customer.

In other words, there could be still more corruption to unearth.

Ligia Maura Costa is the Director of FGVethics research center, full professor at Getulio Vargas Foundation Business School São Paulo (FGV EAESP), and a lawyer in Brazil.

Roberto di Cillo is a Senior Research Fellow at FGVethics, a lawyer, and a member of the Union Internationale des Avocats in Brazil.    

Ligia Maura Costa and Roberto di Cillo

Hey there!

You made it to the bottom of the page! That means you must like what we do. In that case, can we ask for your help? Inkstick is changing the face of foreign policy, but we can’t do it without you. If our content is something that you’ve come to rely on, please make a tax-deductible donation today. Even $5 or $10 a month makes a huge difference. Together, we can tell the stories that need to be told.