The U.S. Department of State designated Primeiro Comando da Capital (“PCC”) and Comando Vermelho (“CV”)—Brazil’s two largest criminal organizations—as Specially Designated Global Terrorists (“SDGTs”) on May 28, 2026, under Executive Order (“EO”) 13224, effective immediately, with Foreign Terrorist Organization (“FTO”) designations under Section 219 of the Immigration and Nationality Act (“INA”) taking effect June 5, 2026. These designations extend the full U.S. counterterrorism enforcement architecture to Latin America’s largest economy and create sweeping criminal, civil, and regulatory exposure for companies operating in or transacting with counterparties in Brazil. As we have been advising since the initial Mexican cartel designations in February 2025, companies that have not already adapted their compliance programs face material risk.
I. The Designations and Their Legal Consequences
The dual designations trigger three categories of legal consequence. First, because PCC and CV are now SDGTs under EO 13224, all of their property and interests in property within U.S. jurisdiction are blocked, and U.S. persons are prohibited from transacting with these organizations or their agents. The Office of Foreign Assets Control’s (“OFAC”) 50percent Rule extends blocking to any entity owned 50 percent or more by a designated party, even if not separately listed. Foreign financial institutions face Correspondent Account or Payable-Through Account (“CAPTA”) sanctions risk if found to have knowingly facilitated significant transactions for SDGTs—effectively an existential threat.
Second, the FTO designation activates 18 U.S.C. § 2339B, which criminalizes providing “material support or resources” to a designated FTO—defined to include any property, service, currency, financial services, lodging, training, expert advice, communications equipment, facilities, or transportation. Penalties include up to 20 years in prison—or life if the conduct results in death—and the statute applies extraterritorially to U.S. persons worldwide, individuals who later enter the United States, or conduct that affects U.S. commerce.
Third, the Anti-Terrorism Act (“ATA”) (18 U.S.C. § 2333) provides U.S. nationals injured by international terrorism a private right of action for treble damages, with aiding-and-abetting liability for those providing “substantial assistance” to FTOs.
PCC was already on OFAC’s Specially Designated Nationals (“SDN”) List since December 2021 under EO 14059 for involvement in the global illicit drug trade; the new designations significantly expand available enforcement tools. Secretary of State Marco Rubio has characterized CV and PCC as “two of the most violent criminal organizations in Brazil” whose “influence and illicit networks extend far beyond Brazil’s borders.”
II. DOJ Strategic Context: The Counterterrorism-Organized Crime Convergence
The Brazil designations represent the culmination of an 18-month campaign to extend the U.S. counterterrorism framework to Latin American organized crime. The arc is clear: EO 14157 (January 20, 2025) declared cartels and Transnational Criminal Organizations (“TCOs”) an “unusual and extraordinary threat” to national security; the Attorney General’s (“AG”) “Total Elimination of Cartels” memorandum (February 5, 2025) directed all U.S. Department of Justice (“DOJ”) components to prioritize TCO investigations and suspended Main Justice approval requirements for terrorism charges; eight Mexican and Latin American organizations were designated as FTOs/SDGTs (February 20, 2025); DOJ’s Criminal Division identified “material support by corporations to foreign terrorist organizations, including recently designated Cartels” as a white-collar enforcement priority (May 12, 2025); the Corporate Whistleblower Awards Pilot Program expanded to cover material support and sanctions violations with awards up to $50 million (May 12, 2025); the Trade Fraud Task Force launched (August 2025); five additional organizations were designated (September–December 2025); and now, on May 28, 2026, the framework reaches Brazil. As our prior analysis of DOJ enforcement priorities has documented, this represents a fundamental convergence of anti-corruption, sanctions, anti-money laundering (“AML”), counterterrorism, and trade-fraud enforcement into a single national-security framework.
The structural changes within DOJ amplify practical enforcement risk. The AG decentralized prosecution authority by suspending pre-indictment approval requirements, accelerating case initiation across 93 U.S. Attorney’s Offices. Joint Task Forces Vulcan and Alpha—elite federal initiatives restructured to directly dismantle transnational criminal networks—have been elevated to the Office of the Attorney General. The Criminal Division has created dedicated sections integrating expertise from the Money Laundering and Asset Recovery Section (“MLARS”), the Counterterrorism Section, and the Fraud Section. The revised Foreign Corrupt Practice Act (“FCPA”) guidelines (June 2025) state that DOJ will prioritize “national security” enforcement “including enforcement involving foreign terrorist organizations and cartels.”
III. Lessons from Mexico: Enforcement Since February 2025
Criminal Prosecutions
DOJ moved rapidly following the February 2025 Mexican designations. In May 2025, Mexican nationals Angel Noriega-Flores and associates were charged in the Southern District of California with narco-terrorism, material support, and International Emergency Economic Powers Act (“IEEPA”) violations for providing weapons, funds, and fentanyl precursors to the Sinaloa Cartel—among the first uses of terrorism charges against cartel operatives. The same month, DOJ secured the superseding indictment of Erick Navarro-Sanchez in the Western District of Texas for material support to Jalisco New Generation Cartel (“CJNG”) through arms trafficking and cross-border weapons smuggling. By December 2025, DOJ had brought more than 40 individual material support prosecutions across at least 15 federal districts. The emerging pattern is that terrorism charges are layered atop traditional narcotics and money laundering counts and extraterritorial jurisdiction is invoked aggressively.
OFAC and Sanctions Actions
Between March and December 2025, OFAC added more than 200 individuals and entities to the SDN List as associates, facilitators, or front companies of the eight designated Mexican organizations. Designated entities included transportation companies, agricultural firms, real estate holding companies, and money service businesses—reaching deep into the legitimate economy. While OFAC has not yet imposed major monetary penalties for violations of the February 2025 designations (reflecting the typical 18–24-month investigation cycle), the strict liability standard means companies need not have known they were transacting with a designated party to face penalties. As our compliance advisory noted, the first wave of civil monetary penalties should be expected in late 2026 or 2027.
FinCEN Section 311 Actions
A significant enforcement development targeted financial institutions directly. In June 2025—only four months after the underlying designations—The Financial Crimes Enforcement Network (“FinCEN”) designated CIBanco as a “primary money laundering concern” under Section 311 of the USA PATRIOT Act, finding reasonable grounds to conclude the institution facilitated significant transactions for the Sinaloa Cartel. FinCEN subsequently issued Section 311 findings against Intercam and Casa de Bolsa Vector in September and November 2025. All three institutions were forced to cease U.S. dollar operations or substantially restructure correspondent banking relationships. The speed demonstrated that FinCEN will act on a standard substantially lower than criminal proof, and the resulting de-risking cascade—with major U.S. correspondent banks terminating relationships across the Mexican financial sector—showed how designations create compliance pressure extending far beyond directly designated entities. This de-risking pattern is likely to repeat in Brazil.
IV. Why This Matters for Companies: The Enforcement Gap Is Closing
Every prosecution to date has been against an individual. No corporation has been charged with material support for a cartel related to the most recent designations. However, the enforcement gap could simply reflect ordinary sequencing; that is, corporate cases take longer: they require proof of entity-level knowledge or willful blindness, voluminous document review, and foreign government cooperation. The more than 40 individual prosecutions since February 2025 could be generating cooperating witnesses who may reference “financial facilitators” and “corporate entities.” Each cooperator provides information about upstream and downstream participants. The whistleblower awards program creates direct financial incentives for insiders to report.
Importantly, sanctions exposure operates on strict liability: a company can be penalized for transacting with a designated party regardless of knowledge. The 50 percent Rule means any entity majority-owned by PCC or CV is blocked even if unlisted. PCC and CV control businesses across transportation, construction, waste management, real estate, and retail in Brazil—often held through nominees and shell entities. Companies face exposure that standard commercial due diligence may not detect. CAPTA sanctions threaten to sever U.S. dollar access for foreign financial institutions that knowingly facilitate significant transactions for SDGTs.
FinCEN’s Section 311 authority poses the most immediate institutional threat. It requires only “reasonable grounds”—lower than probable cause—to designate a financial institution as a primary money laundering concern, and the Mexico experience shows FinCEN will act quickly. No Section 311 action has yet been taken against a Brazilian institution, but the parallels between Mexico and Brazil suggest it may be coming. PCC and CV utilize the Brazilian financial system extensively through front businesses, money service businesses, real estate transactions, and cryptocurrency exchanges. Brazilian financial institutions and their U.S. correspondent partners should anticipate Section 311 scrutiny, with attendant de-risking pressure affecting any company relying on U.S. dollar payment channels for Brazilian operations.
V. Implications for Brazil: Unique Challenges and Heightened Risk
PCC’s Formal-Economy Penetration
Brazil’s situation differs fundamentally from Mexico because PCC has achieved a level of formal-economy penetration that no Mexican cartel has matched. Brazil’s Conselho de Controle de Atividades Financeiras (“COAF”) and Federal Police investigations have documented the scale. Operation Hidden Carbon (2023–2024) revealed PCC controlling more than 1,000 gas stations and fuel distributors with revenues exceeding BRL 52 billion, using fintech platforms to move approximately BRL 46 billion, and channeling BRL 30 billion through regulated investment funds. Subsequent operations (Fluxo Oculto, Spare) confirmed PCC’s presence in regulated sectors including mining, agribusiness, and pharmaceutical distribution. This is not a protection-money extortion model—it is direct ownership and operation of legitimate businesses at industrial scale, creating counterparty risk for any company doing business in Brazilian sectors where PCC operates.
Key Distinctions from Mexico
Several factors make the Brazil compliance challenge more acute than in Mexico. First, Brazil’s economy is approximately eight times the size of Mexico’s formal manufacturing and export sector; the volume of U.S.-nexus transactions potentially touching PCC or CV is correspondingly larger. Second, PCC’s corporate structure—with formal-economy businesses, investment vehicles, and fintech operations—creates 50 percent Rule exposure through legitimate-appearing entities that would not trigger traditional sanctions screening. Third, Brazil’s diplomatic rejection of the designations means companies cannot rely on bilateral law enforcement cooperation to validate their compliance posture. Fourth, unlike Mexico’s cartels, which primarily generate revenue through narcotics trafficking with ancillary extortion, PCC generates a substantial portion of its revenue through ostensibly legitimate commerce—making the line between prohibited and permitted transactions far harder to draw.
Sectors at Particular Risk
Sectors facing the most acute exposure include financial services (FinCEN Section 311 and Bank Secrecy Act (“BSA”)/ Suspicious Activity Report (“SAR”) obligations), logistics and transportation (PCC controls freight corridors and port operations), energy and fuel distribution (documented PCC ownership of more than 1,000 gas stations), construction and real estate (nominee ownership structures), and consumer goods companies with Brazilian retail distribution in PCC/CV-controlled territories.
Practical Compliance Guidance
Companies with Brazilian operations or significant Brazilian counterparty exposure should treat the May 28 designations as triggering immediate action across four areas. First, screening and enhanced due diligence: conduct beneficial ownership analysis of all Brazilian counterparties, suppliers, and joint venture partners, extending beyond standard sanctions screening to the 50 percent Rule and applying heightened scrutiny to sectors where PCC and CV are documented to operate. Second, internal controls and training: update compliance programs to address FTO/SDGT-specific obligations, train personnel on red flags associated with PCC/CV exposure (unusual security payments, logistics fees to entities in known controlled territories, counterparties with opaque ownership), and implement escalation protocols for transactions presenting elevated risk. Third, monitoring and preparation: implement ongoing transaction monitoring for PCC/CV red flags, establish protocols for rapid response to future OFAC SDN additions (which will come), prepare for potential FinCEN Section 311 actions against Brazilian financial institutions that could disrupt payment channels, and evaluate whether voluntary self-disclosure to OFAC or DOJ is appropriate for any potential past violations. Fourth, engage experienced counsel: the dual-compliance challenge (U.S. law versus Brazilian sovereignty objections), the extraterritorial reach of § 2339B, and the cascading consequences of the 50 percent Rule require legal counsel with expertise in both jurisdictions and across sanctions, counterterrorism, and AML frameworks.
VI. Conclusion
The designation of PCC and CV extends the full U.S. counterterrorism enforcement architecture—criminal, civil, regulatory, and financial—to Latin America’s largest economy. The Mexico enforcement experience demonstrates these tools are being used with increasing velocity; companies that wait for the first corporate prosecution to validate the risk will have waited too long.
Our White Collar Defense and Investigations team is available to assist companies in assessing exposure, designing compliance programs, and engaging with enforcement authorities while the window for proactive action remains open.
For more information or assistance, please contact Bradley L. Henry, or another member of Blank Rome’s White Collar Defense & Investigations or Trade Enforcement groups.