By Marcela Ayres
BRASILIA/RIO DE JANEIRO (Reuters) -Brazil will seek U.S. cooperation in fighting organized crime in its fuel sector, Finance Minister Fernando Haddad said on Thursday, after a police operation flagged money laundering by Delaware-based firms to help one of the worst tax dodgers in the South American country.
Haddad said the issue may be included in the bilateral agenda between Washington and Brasilia as they seek a wider trade deal after U.S. President Donald Trump began rolling back tariffs on some Brazilian goods.
Brazil’s government said U.S.-based firms are being used for money laundering and disguising foreign investments in Brazil. Haddad said he also raised with President Luiz Inacio Lula da Silva concerns about illegal U.S. weapons shipments.
“We conveyed to President Lula the need to include in the negotiations, which are going well, the issue of money laundering and the illegal export of weapons to Brazil,” he told reporters.
Haddad said the government could show Washington how funds were being illegally funneled out of Brazil and present footage showing weapons arriving in Brazil in containers from the U.S.
“This partnership is essential,” the minister said. “If we want to stop drugs from reaching consumer markets there … we need to crack down on crime in our own territory, and prevent heavy weapons from entering Brazil.”
REFINERY TARGETED
The main target of Thursday’s police operation was privately owned refinery Refit, sources told Reuters.
Brazil’s tax authority said the raid followed an August operation targeting billions of reais of money laundering and fraud in the fuel sector, including businesses linked to the First Capital Command, a major organized crime gang.
Without naming the company, the federal revenue service said it was cracking down on one of Brazil’s most delinquent taxpayers, which owes federal, state and local governments more than 26 billion reais ($4.9 billion).
The revenue service said the group allegedly shifted 72 billion reais in a year through companies, funds and offshore entities to hide profits.
In a statement, Refit said the firm is disputing the tax debt in court, and that it is not trying to hide revenue or engage in tax fraud.
“We are closing in on those who, from the upper floors of Faria Lima or from their mansions in Miami and Europe, undermine public security in Brazil,” tax revenue secretary Robinson Barreirinhas said at a press conference in Sao Paulo.
He said Delaware firms exploited rules that exempt them from U.S. tax if they earn no local income, leaving them untaxed in both countries, a scheme often tied to money laundering.
($1 = 5.35 reais)
(Reporting by Marcela Ayres in Brasilia and Rodrigo Viga Gaier in Rio de Janeiro; Editing by Brad Haynes, Alexandra Hudson and Bill Berkrot)
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