PCC and CV designated as terrorist organizations by the U.S.: what changes for compliance in Brazilian and foreign companies

On June 5, 2026, the United States government formally designated, through a notice published in the Federal Register, the Primeiro Comando da Capital ("PCC") and the Comando Vermelho ("CV") as both Specially Designated Global Terrorists ("SDGTs") and Foreign Terrorist Organizations ("FTOs"). The SDGT designation took effect at the time of the announcement, on May 28, 2026; the FTO designation became effective as of the date of its publication.

Two distinct regimes

The designations operate under two separate legal frameworks with different practical consequences:

SDGT: Comparable in many respects to OFAC’s Specially Designated Nationals (“SDN”) designation, the SDGT requires the blocking of assets associated with PCC and CV and prohibits transactions involving individuals or entities connected to these organizations.

FTO: Establishes criminal liability under 18 U.S.C. § 2339B for knowingly providing “material support or resources” to the designated organizations. This liability exists regardless of whether a specific individual or entity is listed on a sanctions list — a connection to the terrorist organization alone is sufficient. The required mens rea is knowledge: it is sufficient that a company or institution knew it was dealing with or for an FTO, without any requirement to demonstrate knowledge of the specific end-use of the resources provided.

Both regimes carry extraterritorial reach, applying to any person subject to U.S. jurisdiction. For companies with subsidiaries or offices in the United States, operations in USD, U.S. correspondent banking relationships, or U.S. investors, this nexus already exists.

Absence of individual listings: A key practical challenge

The Office of Foreign Assets Control (“OFAC”) has not yet updated its sanctions lists to include specific individuals or entities associated with the PCC or CV. OFAC is expected to publish such lists in the coming weeks, consistent with its practice following the designation of Mexican cartels. Once available, compliance will become more straightforward: these will be additional databases to screen against before proceeding with any transaction.

In the meantime, the absence of individual listings creates a practical tension between compliance obligations and operational feasibility. Companies must exercise appropriate diligence without screening so broadly as to create unacceptable disruption. The standard under § 2339B provides meaningful guidance here: the requirement of knowledge means that documented, proportionate due diligence — calibrated to the risk profile of the counterparty or transaction — is the best available defense today.

It is also worth noting that the DOJ has included material support and sanctions violations in its Corporate Whistleblower Awards Pilot Program, offering rewards of up to USD 50,000. This increases the risk that internal compliance failures may be reported externally.

Recommended measures

In connection with onboarding processes, supplier engagement, corporate transactions, investments, and commercial dealings, companies should consider implementing the following measures, as applicable:

•       Third-party and supplier due diligence;

•       Know Your Customer (KYC) procedures;

•       Transaction and financial activity monitoring;

•       Anti-Money Laundering (AML) controls;

•       Periodic reputational risk assessments; and

•       Whistleblowing and internal investigation mechanisms.

Companies should also review standard contractual frameworks — including representations and warranties in credit agreements and capital markets transactions — to ensure they adequately address exposure to organizations designated as FTOs.

Higher-risk sectors

Particularly for higher-risk sectors, including but not limited to financial institutions and fintech companies, logistics and fuel distribution, infrastructure, agribusinessband energy and natural resources, the implementation of robust governance, integrity, and risk management frameworks will be essential to demonstrate appropriate diligence to regulators and to domestic and international business partners.

Should you require support or specific guidance regarding compliance with these new requirements, please contact the Compliance team at Lobo de Rizzo Advogados.