In early June, the U.S. State Department designated Brazil’s Primeiro Comando da Capital (PCC) and Comando Vermelho (CV) as Foreign Terrorist Organizations, making them the first Brazilian entities added to a list that includes 15 other Latin American groups. The move followed a White House meeting between U.S. President Donald Trump and Brazilian presidential hopeful Senator Flávio Bolsonaro, who had lobbied for the designations. What are the practical consequences of the designations for how U.S. and Brazilian authorities can pursue the PCC and CV? How are the Brazilian government and companies in the South American country responding to designations? What is the significance of the designations to Brazil’s October presidential election?
Vanda Felbab-Brown, senior fellow for foreign policy at the Brookings Institution: “Coming during U.S.-Brazil trade negotiations and efforts to ease tensions between Presidents Luiz Inácio Lula da Silva and Donald Trump and center the U.S.-Brazil relationship on critical minerals, the designations of the Primeiro Comando da Capital (PCC) and the Comando Vermelho (CV) as terrorist organizations took Brazilian officials aback. With renewed U.S. threats of tariffs against Brazil, including based on deforestation, the designations were widely seen in Brazil as meant to support Flávio Bolsonaro’s electoral bid against Lula. While the Lula government has opposed the terrorism designation, Bolsonaro lobbied the Trump administration for it, running on a tough-on-crime message and drumming up the anti-crime inadequacies of the Lula administration. The designations expand U.S. authority in various ways: They allow the Department of Defense to be involved in intelligence gathering against the designated groups. Though unlikely, the Trump administration could begin targeting alleged cocaine boats just at the edge of Brazil’s waters. The vast and powerful material support statutes incentivize U.S. prosecutors to hunt for Brazilian politicians and businesses laundering money for the two criminal groups or providing them with political cover. Various Rio de Janeiro politicians have often had complex negotiated relations with the CV, providing selective services and contracts to the marginalized favelas in exchange for votes delivered by the gang. The Carbono Oculto operation revealed the enormous expansion of the PCC into the ethanol and gasoline industry (and others) in Brazil and into Brazil’s financial system, particularly fintech companies. The U.S. government could start sanctioning various Brazilian actors (as well as U.S. companies dealing with them) and cutting them off from access to the dollar. In an extreme case, the U.S. government could even seek to sanction Brazil’s ethanol industry, a national security asset of the Brazilian government, because of PCC penetration. (The U.S. government has not taken such nuclear measures against Mexican industries despite the designation of Mexican cartels as foreign terrorist organizations.) And because the PCC’s presence and power have grown significantly across South America and have expanded in Africa, other countries can be vulnerable to such sanctions.”
Robert Muggah, co-founder of the Igarapé Institute: “The designation announcement landed shortly after a visit by presidential candidate Flávio Bolsonaro, though the decision had been in the making for more than a year. The political optics were convenient. The impacts will be anything but. The most dramatic consequences may well be economic rather than diplomatic or political. For U.S. agencies, the designations unlock a much broader enforcement arsenal, including asset freezes, immigration restrictions, material-support statutes and sanctions that can now be deployed against anyone suspected of facilitating PCC or CV activity. American scrutiny of Brazilian banks, payment systems and export supply chains will tighten significantly. For Brazil, the picture is more fraught. Police, prosecutors and financial-crimes units may quietly welcome U.S. support in combating drug trafficking, firearms smuggling and money laundering. But Brasília has no intention of allowing Washington to rewrite Brazilian security policy in counter-terrorism language. The result will be selective cooperation that is tactical, constrained and calibrated to protect Brazilian sovereignty. Brazilian and foreign companies operating in Brazil face higher compliance costs, more intrusive supply-chain audits and sharper questions from correspondent banks. The pressure will fall hardest on firms with exposure to agribusiness, construction, energy, finance, logistics and mining, all sectors where PCC and CV networks have penetrated. Politically, the move may not wound President Lula as badly as his opponents anticipate. Framed as U.S. overreach into Brazilian sovereignty, it could provide him with political cover, allowing him to take a harder line on organized crime while wrapping himself in a nationalist defense of Brazilian institutions. The deeper paradox is that the designation will do very little to weaken the PCC or the CV. They are adaptive and resilient, having survived (and often thrived) under pressure for decades. The measure will raise costs for legitimate firms and complicate bilateral cooperation. But without sustained Brazilian action to address corruption and the stranglehold both organizations maintain in and outside the prison system, the impact on crime itself is likely to be marginal.”
Benjamin Lessing, associate professor of political science at the University of Chicago: “The CV/PCC terrorist designation will probably have little effect, practical or political. But possibly? The sky’s the limit. In the Bolsonarista social-media fever-dream version (think Maduro Part 2) Trump bombs the favelas, indicts and maybe even kidnap-arrests Lula on accusations of links to organized crime. Short of that, Flávio Bolsonaro clearly hoped to convey leverage with Trump, by flying to Washington just before the announcement, and lure Lula into the trap of denouncing the designation, thus appearing soft on crime. These goals got scrambled when Trump levied a second round of punitive tariffs and attacked Brazil’s wildly popular Pix e-payment system. As with Round 1 in 2025, the public blames Flávio and his brother Eduardo, with Lula expertly positioning himself as defender of national sovereignty against self-interested sellouts. The terrorist designation is more popular than tariffs, but Brazilians still think it is for Brazil, not the United States, to decide, and fear military intervention. Pragmatically, prosecutors warn that designation will weaken anti-organized crime cooperation, since all U.S. intelligence will become highly classified and hard to share. Worst for the Bolsonaros, Faria Lima (Brazil’s Wall Street), whose ties to PCC money laundering were recently revealed, now worries about U.S. terrorism charges and frozen assets. To me, any U.S. action seems unlikely, but a desperate Trump is an unpredictable Trump. My forecast: a nothing burger with a slight chance of chaos.”
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