U.S. Designation – Brazilian Terrorist Organizations

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The U.S. Department of State has designated two major Brazilian criminal organizations, Primeiro Comando da Capital (PCC) and Comando Vermelho (CV), as Specially Designated Global Terrorists...

United States Government, Public Sector

On May 28, 2026, the U.S. Department of State designated Brazil’s Primeiro Comando da Capital (PCC) and Comando Vermelho (CV) as SDGTs and announced the intention to designate both groups as FTOs, effective June 5, 2026.

	SDGT	FTO
Designation	Specially Designated Global Terrorist	Foreign Terrorist Organization
Effectiveness	May 28, 2026 (immediate)	June 5, 2026 (upon Federal Register publication)
Legal framework	Executive Order 13224	Section 219, Immigration and Nationality Act (INA)
Key consequences	All property and interests in property of SDGTs within the United States or in the possession of U.S. persons blocked. U.S. persons prohibited from engaging in any transactions or dealings with SDGTs or entities 50% or more owned (directly or indirectly) by a designated organization. A single U.S. nexus — such as a dollar-denominated transaction or routing through the U.S. financial system — is sufficient to trigger investigation and asset blocking. Foreign financial institutions and multinational companies may become subject to OFAC restrictions where transactions touch the U.S. financial system.	Providing "material support" to an FTO exposes companies to civil and criminal liability — with up to 20 years in prison, regardless of knowledge of FTO connection. The definition of "material support" is broad, encompassing financial contributions, services, personnel, logistics, and other resources. Treasury Secretary may freeze and block any FTO-linked assets held in U.S. financial institutions. Companies providing material support to FTO-owned or -controlled businesses face civil lawsuits and reputational damage that may lead U.S. banks, partners, and counterparties to sever business relationships.

Recommended actions

1. Risk assessment and due diligence

Conduct enterprise-wide risk assessment of customers and counterparties (geographic, sectoral, business profile)
Enhance due diligence for counterparties in PCC/CV-vulnerable regions or sectors
Evaluate whether structure, operations, or transactions create a U.S. nexus
In mergers and acquisitions and financings, expand diligence to cover organized crime exposure and post-closing sanctions risk

2. KYC, screening, and monitoring

Screen counterparties against OFAC and applicable sanctions lists; verify ultimate beneficial owners
Strengthen KYC procedures to uncover FTO connections
Continuous sanctions, negative media, and transaction monitoring

3. Supply chain and contracts

Map supply chain and financial flows, focusing on high-risk sectors and regions
Insert sanctions-triggered termination clauses; review existing agreements for adequate representations

4. Compliance and internal policies

Update compliance policies, procedures, and training for FTO-related risk
Strengthen whistleblower policies to encourage internal reporting channels

5. U.S. counterparty relations

Ensure representations to U.S. partners on compliance remain accurate — misrepresentations have been used as basis for fraud charges
Monitor all U.S. regulatory and enforcement developments on FTO designations

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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