Brazilian Criminal Factions Designated as Terrorist Groups by U.S. State Department

On May 28, 2026, the State Department designated PCC and CV—two Brazil-based transnational criminal organizations reportedly active across various sectors of the Brazilian economy, including the financial industry, gas distribution, and agribusiness—as SDGTs and intends to designate both groups as FTOs, effective June 5, 2026.

In a press release issued on the same date, the State Department stated that "CV and PCC are two of the most violent criminal organizations in Brazil. Together, they command thousands of members and have orchestrated brutal attacks against Brazilian police officers, public officials, and civilians. Their influence and illicit networks extend far beyond Brazil's borders, across our region and into our country."

This follows President Trump's January 2025 executive order creating a process for designating international drug cartels and transnational criminal organizations as FTOs/SDGTs. As noted in a prior Jones Day Commentary, "Mitigating Risk From the Designation of Cartels as FTOs and SDGTs," these designations increase the legal risk for companies, particularly those with a U.S. nexus, operating in Brazil and Latin America. They also raise the potential for heightened scrutiny from the Department of Justice and other U.S. enforcement and regulatory agencies.

The Anti-Terrorism Act expands potential criminal and civil exposure for companies with customers, suppliers, or intermediaries connected to designated entities. The Act criminalizes providing "material support" to FTOs and financing terrorism. Civilly, it allows U.S. nationals to sue for damages arising from "acts of international terrorism." Liability can extend to aiding and abetting through knowing provision of substantial assistance.

The designations also increase exposure under U.S. sanctions and export control laws. The Treasury Department (OFAC) prohibits U.S. persons from transacting with FTOs or SDGTs, with strict liability civil penalties or criminal penalties for willful violations. The Commerce Department (BIS) prohibits unlicensed exports to an SDGT and violations carry potential civil or criminal penalties.

Companies operating in Latin America should act now to mitigate potential exposure by:

1. Conducting risk assessments to identify potential exposure and develop mitigation strategies.
2. Reviewing contracts to ensure compliance with sanctions and anti-terrorism obligations and to assess any impact on contractual performance obligations.
3. Strengthening compliance programs with enhanced audits and red-flag detection, third-party relationship mapping, pre-transaction due diligence, and personnel training.