{"id":95470,"date":"2025-08-22T12:46:11","date_gmt":"2025-08-22T15:46:11","guid":{"rendered":"https:\/\/murray.adv.br\/?p=95470"},"modified":"2025-08-22T12:46:11","modified_gmt":"2025-08-22T15:46:11","slug":"banks-start-blocking-transactions-of-justice-moraes","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/banks-start-blocking-transactions-of-justice-moraes\/","title":{"rendered":"Banks start blocking transactions of Justice Moraes"},"content":{"rendered":"
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Mastercard cancelled by Banco do Brasil as financial institutions weigh potential legal impacts of Magnitsky Act sanctions<\/strong><\/em><\/h6>\n<\/div>\n<\/div>\n
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08\/22\/2025\u00a0<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n

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The cancellation of a credit card issued by Banco do Brasil (BB) marked the first known consequence of applying the Magnitsky Act to Federal Supreme Court (STF) Justice Alexandre de Moraes. The move, revealed Thursday (21) by\u00a0Valor, reignited debate over the scope of the measure and the risks it poses for financial institutions.<\/p>\n<\/div>\n

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The unprecedented step, combined with the law\u2019s vague wording, has led banks to seek multiple legal opinions. For now, financial institutions are taking a narrow approach, complying with the act strictly as written. That means closing accounts of sanctioned individuals in U.S. subsidiaries and blocking cards with international networks. In Brazil, Mastercard, Visa, and Amex \u2014 all American brands \u2014 operate alongside Elo, controlled by BB, Bradesco, and Caixa.<\/p>\n<\/div>\n

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In Mr. Moraes\u2019 case, his card was canceled because it carried an American brand, not because BB has significant operations in the United States. He was offered an Elo card as a replacement, but it can only be used for domestic purchases, not dollar transactions. The justice does not hold accounts abroad, and banks have interpreted that nothing prevents him from maintaining his domestic BB account, through which he receives his salary.<\/p>\n<\/div>\n

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Although this is the first time the Magnitsky Act has been applied to a Brazilian citizen, banks with U.S. operations are not entirely unfamiliar with the measure. Around 700 people worldwide are subject to sanctions, and financial institutions routinely cross-check that list against their client base.<\/p>\n<\/div>\n

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An industry executive with decades of experience said the concern lies in the Trump administration\u2019s \u201cdistorted use\u201d of the law, originally designed to target terrorists and combat money laundering. \u201cInternational sanctions of that kind, the ones that go onto OFAC\u2019s [U.S. Treasury\u2019s Office of Foreign Assets Control] list, are truly broad \u2014 no American company could have a relationship with a Brazilian bank holding an account for Moraes. But this law is not applicable to him, so Brazil should just stay put, wait for things to calm down, and this might all amount to nothing,\u201d he said.<\/p>\n<\/div>\n

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Another industry source noted that restrictions on Mr. Moraes are not as severe as those imposed on terrorists. \u201cBanks are trying to do the minimum, within the law, with the options available, and then wait. If the U.S. government presses them, claiming the rules aren\u2019t being enforced, they\u2019ll adjust,\u201d said another sector leader.<\/p>\n<\/div>\n

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Much of the industry believes further sanctions can be avoided if the STF and the Brazilian and U.S. governments refrain from escalating tensions.<\/p>\n<\/div>\n

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Even so, the climate is tense, partly because this is a technical application of a politically charged issue. The situation grew more complex after Justice Fl\u00e1vio Dino ruled that foreign laws must be ratified by local authorities before being enforced in Brazil.<\/p>\n<\/div>\n

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On Wednesday (21), Mr. Moraes himself backed Mr. Dino\u2019s view. \u201cIf banks decide to apply the law internally, they cannot. And then they could be penalized domestically,\u201d he told Reuters.<\/p>\n<\/div>\n

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Mr. Dino\u2019s decision has prompted banking representatives to make the rounds in Bras\u00edlia, seeking to prevent the crisis from worsening. Some interlocutors believe the restrictions adopted so far do not defy the minister\u2019s ruling.<\/p>\n<\/div>\n

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Similarly, a BTG Pactual report circulated this week suggested that banks could close or segregate accounts as an internal policy, avoiding direct confrontation with the STF.<\/p>\n<\/div>\n

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Some industry voices argue Brazil could find support among American companies. Local banks are major consumers of U.S. card networks, technology providers, and service firms. \u201cBrazil is among the top three markets for a major card network. Will it want to lose that?\u201d asked a representative of a large bank.<\/p>\n<\/div>\n

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Although not considered the base case, banking executives see risks of more radical measures if the dispute between Brazil and the United States worsens. \u201cIf Trump decides to push this to the limit, the consequences could be drastic,\u201d one source said. \u201cWe\u2019ve been consulting with many lawyers. For now, that\u2019s not the expected scenario, but the list of sanctioned individuals could grow, penalties could deepen. In the extreme, an entire bank could be sanctioned, or even Brazil as a country,\u201d said another.<\/p>\n<\/div>\n

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BB declined to comment, as did other financial institutions, citing banking secrecy in Mr. Moraes\u2019 case. The bank has been the target of social media rumors, and its shares are down 15.58% this year.<\/p>\n<\/div>\n

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On Wednesday, BB president Tarciana Medeiros, without naming names, criticized those who undermine the institution. \u201cIt is highly irresponsible when a Brazilian calls into question the soundness and integrity of a company like Banco do Brasil,\u201d she said. Her remarks echoed the rhetoric of government officials who have criticized Congressman Eduardo Bolsonaro (Liberal Party, PL, S\u00e3o Paulo) for lobbying in the U.S. for sanctions against Brazil.<\/p>\n<\/div>\n

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Mr. Moraes did not immediately respond to requests for comment.<\/p>\n

*By\u00a0Talita Moreira\u00a0and\u00a0\u00c1lvaro Campos\u00a0\u00a0\u2014 S\u00e3o Paulo<\/p>\n

Source: Valor International<\/p>\n

https:\/\/valorinternational.globo.com\/<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Mastercard cancelled by Banco do Brasil as financial institutions weigh potential legal impacts of Magnitsky Act sanctions     08\/22\/2025\u00a0 The cancellation of a credit card issued by Banco do Brasil (BB) marked the first known consequence of applying the Magnitsky Act to Federal Supreme Court (STF) Justice Alexandre de Moraes. 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