U.S. Pressure on Brazil: The Potential Designation of Criminal Gangs as Terrorist Organizations

A recent phone call between U.S. Secretary of State Marco Rubio and Brazilian Foreign Minister Mauro Vieira has raised significant concerns regarding the potential designation of Brazil's Primeiro Comando da Capital (PCC) and Comando Vermelho (CV) as Foreign Terrorist Organizations (FTOs). This designation, framed by Washington as a counternarcotics measure, could have profound implications for Brazil's legal and diplomatic landscape, extending U.S. sanctions and regulatory scrutiny into the Brazilian economy.

Americas Quarterly

The PCC and CV are two of Brazil's most powerful criminal organizations, heavily involved in drug trafficking and violence across Latin America and beyond. The PCC is recognized as the largest transnational criminal group in Brazil, with deep ties to cocaine trafficking networks in Europe. The CV, Brazil's oldest criminal faction, has maintained territorial control in Rio de Janeiro's favelas for decades. The Brazilian government has previously resisted U.S. pressure for such designations, but the renewed push coincides with Brazil's upcoming presidential elections, where security is a top voter concern.

Americas Quarterly

The potential FTO designation is seen by Brazilian officials as interference in their electoral process. Former President Jair Bolsonaro's son, Eduardo Bolsonaro, has actively lobbied for the designation, which could provide a political advantage to right-wing candidates in the upcoming elections. President Luiz Inácio Lula da Silva faces a challenging decision: to accept the designation and risk appearing subservient to U.S. interests or to reject it and be labeled as ineffective against narcoterrorism.

Americas Quarterly

The economic ramifications of an FTO designation could be severe for Brazilian businesses. Companies with any connection to the PCC or CV could face investigations and sanctions, even if they were unaware of any criminal ties. The PCC alone is linked to an estimated 52 billion reais ($10 billion) in assets across various sectors, including agribusiness and construction. The designation could lead to increased scrutiny from U.S. regulators and financial institutions, complicating international business operations for Brazilian firms.

Americas Quarterly

Critics argue that designating the PCC and CV as terrorist organizations may not effectively address Brazil's organized crime issues. Instead, it could create new legal uncertainties and compliance burdens for businesses, while expanding U.S. influence over Brazil's internal affairs. The precedent set by previous FTO designations in other countries suggests that the primary impact may fall on compliance departments of financial institutions rather than on the criminal organizations themselves.

Americas Quarterly

• “Designating the PCC and CV as foreign terrorist organizations would not solve Brazil’s organized crime problem.” — Robert Muggah, Co-founder, Igarapé Institute

Americas Quarterly

• “leverage over Brazil, and complicate life for a variety of actors including the private sector, more predictably than it would weaken the criminal groups themselves.” — Robert Muggah, Co-founder, Igarapé Institute

Americas Quarterly

The potential designation of Brazil's PCC and CV as FTOs represents a complex intersection of U.S. foreign policy, Brazilian sovereignty, and the challenges of organized crime. As Brazil approaches its presidential elections, the implications of this designation will continue to unfold, influencing both domestic politics and international relations.

Americas Quarterly