US Terrorism Designations Will Hit the PCC’s Money—and Everyone Else’s

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The addition of two Brazilian criminal groups to the US State Department’s list of foreign terrorist organizations could squeeze everyone doing business in the world’s tenth-largest economy—except for the criminals it is supposed to. 

The May 28 designation of the First Capital Command (Primeiro Comando da Capital—PCC) and the Red Command (Comando Vermelho – CV) was long awaited but still fell like a hammer. Brazil’s president, Luiz Inácio Lula da Silva, was highly critical of the move, which he sees as a threat to Brazil’s financial well-being.  

“This could represent a setback in the fight against crime, a threat to people’s lives, and economic losses for the country,” he wrote in a post on social media.

Lula has reason to worry. He and his Worker’s Party (Partido dos Trabalhadores – PT) are in a tight race for reelection with the presumed opposition candidate, Flávio Bolsonaro. Bolsonaro, the son of former Brazilian President Jair Bolsonaro, visited the United States in the days preceding the announcement, then took credit for it in social media posts.  

“In one trip as a pre-candidate, we did more for Brazil and for the security of Brazilians than the Worker’s Party and Lula during their 16 years in office,” claimed Bolsonaro in a video.

SEE ALSO: US Foreign Terrorist Designations in Latin America: An Interactive Map

But neither candidate benefits from this. As one of the world’s largest economies, Brazil trades over $8 billion in goods per month with the United States, according to the Atlantic Council. Massive US companies in the tech, energy, food, and automotive industries operate in Brazil. And though tariffs temporarily dinged the relationship, US-Brazil economic relations continued to grow.

All of this is at risk with the new designations. The measures mean any individual, business, or bank even unwittingly working with the two gangs could have their assets frozen or be charged with supporting terrorism. It could also mean lawsuits and other legal challenges. 

Of the two criminal groups, the PCC is far more entrenched in the financial system. Yet, the scale of their criminal operations means that nearly every financial institution in Brazil could be tangentially tied to one or both of these criminal groups.

“Today, we estimate that the PCC makes around $2 billion a year,” prosecutor Lincoln Gakiya, who spent over two decades investigating the gang, told InSight Crime. This money is laundered all over the financial system without banks being aware of its true origin. 

“Who could be affected? Everyone,” he added.

SEE ALSO: Brazil’s New ‘Terrorist’ Groups – the PCC and the Red Command – Explained

Hidden Carbon, Hidden Crime

The PCC infiltration of Brazil’s fuel sector shows just how difficult it can be to know who is really behind a company. 

Operation Hidden Carbon (Carbon Oculto), as it is known, exposed the PCC’s fuel imports and control of gas stations. The businesses looked legitimate, but they were operated in part by the gang. 

In the second phase of the operation, launched in 2025, authorities identified an estimated $5 billion (R$ 26 billion) in PCC money laundered over four years through fintechs and investment funds operating in Faria Lima—the hub of Brazil’s financial sector. 

The transactions exposed by the operation show just how opaque the PCC’s dealings are. The Brazilian government, including police forces and the military, purchased fuel from a PCC-operated company, according to local newspaper Folha de São Paulo. So buttoned up was the paperwork that even the government thought the business was legitimate. 

“For businesses operating in Brazil or exposed to Brazilian supply chains, the message taken is that compliance frameworks need to be recalibrated quickly,” said Bruna Santos, the director of the Brazil Program at the Inter-American Dialogue in Washington, DC. “The new legal environment raises the stakes around sanctions exposure, illicit finance, third-party risk, logistics, payments, and reputational risk.”

While the lightly-regulated fintech industry was the main target of the operation, the companies operated by the PCC also used traditional banks, such as Bradesco, which face far more stringent regulation.

SEE ALSO: Historic PCC Bust Spurs Brazil Crackdown on Digital Money Laundering

The structure of the scheme hid direct links to the gang, as profits were distributed across various banks and businesses. With the new designation, businesses that unwittingly bought fuel from one of the PCC-operated companies and banks that inadvertently processed their payments could be sanctioned.

Ricardo Zuñiga, a former US diplomat who now works as a consultant at Dinamica Americas, an advisory firm, said chances are high that Brazilian financial institutions will face scrutiny by US prosecutors and individuals seeking to file a lawsuit against them, which he qualifies as the most likely scenario. 

“I think it is almost inevitable that you’re going to have some kind of financial impact or impact on a financial institution in Brazil at some stage,” he told InSight Crime.

Even if not directly charged, companies may become gun-shy, reducing business in Brazil.  Compliance costs could increase as companies jump through hoops, fearing some unknown link to organized crime or taking wildly elaborate steps to ensure they are not. 

Impacts could expand far beyond the fuel sector, with those working in mining, agriculture, logging, and many other industries operating in territories where the PCC or the Red Command are active. 

PCC Continues to Evolve Despite Government Operations

The US designations could give authorities new tools to go after the PCC’s money, but the gang has proven to be incredibly agile.

Now in its third decade, it has repeatedly found ways to expand its operations, despite disruptions from law enforcement. Its top leaders have been locked up in maximum security prisons for years. The PCC’s criminal schemes have been repeatedly dismantled in Brazil, and key facilitators in its network have been captured or killed, yet the group has only grown and diversified its operations, moving up the political and economic food chain in the process.

With the massive profits generated by trafficking drugs, mainly to Europe, the group has also found new ways to launder money. 

“The PCC is in alliance with businesspeople, tax evaders, and financial market operators … to launder its money,” explained Gakiya, the Brazilian prosecutor. “They set up companies, buy companies, and gradually increase their stake in various sectors. Investment funds, construction companies—in short, a very wide range of businesses.”

SEE ALSO: As Brazil’s PCC Gentrifies, Favela Residents Must Fend for Themselves

Hidden Carbon is just the tip of the iceberg. Before the operation, the PCC had already moved into the transport sector, gaining municipal contracts to operate public buses in São Paulo. They won contracts for cleaning services and waste management. 

Both the PCC and the CV are also spread across the gold mining supply chain in the Amazon and beyond, an increasingly lucrative industry with gold prices hitting all-time highs. And they have years of experience with cryptocurrencies, both mining them and trading them.

“There’s no physical movement of cash anymore,” Gakyia told InSight Crime. “In other words, it doesn’t come in a suitcase full of cash. It usually comes through financial operators, money changers, and cryptocurrencies.”