Jeremy Paner Speaks to Veja on Risks for Brazilian Banks Following US Sanctions on Brazilian Supreme Court Justice

Jeremy Paner discussed the risks for Brazilian banks after U.S. sanctions were imposed against Justice Alexandre de Moraes of the Supreme Federal Court of Brazil, in an article for Brazilian publication Veja.

The sanctions leave Brazilian banks caught between risking billions in fines from the United States if they don’t comply, and being punished by the Brazilian courts if they do.

Paner explained that in this scenario it’s often easier for the banks to make exceptions under their domestic law, rather than run the greater risk of disobeying U.S. sanctions.

“Banks often argue that failure to comply with sanctions jeopardizes their business models and drives away other customers,” Paner said in the article.

Paner went on to illustrate how the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) enforces sanctions and maintains the list of individuals and entities prohibited from making transactions in dollars, or from using US-based credit cards like Visa and Mastercard.

Because of this, Paner explains that a financial institution’s greatest fear is being included on the OFAC list themselves, losing access to international payment networks, customers and partners.

“I think it's unlikely that OFAC will sanction Banco do Brasil as a whole—that would be very disruptive. But a subsidiary or part of its operations could be targeted,” Paner said.

Read the article.