The U.S. State Department has designated Brazil's two largest criminal organizations, the First Capital Command (PCC) and the Red Command (CV), as foreign terrorist organizations. Secretary of State Marco Rubio announced the decision on Thursday, with the designation taking effect on June 5. U.S. officials stated these groups operate transnational criminal networks that pose a security threat, noting that the Trump administration will use all available tools to disrupt the revenue streams funding violent narco-terrorists.
The move has caused significant tension between Washington and Brasilia. President Luiz Inácio Lula da Silva criticized the unilateral designation as confused, counterproductive, and a threat to national sovereignty. Lula expressed concern that the move could pave the way for U.S. military action or sanctions against banks. In contrast, Senator Flávio Bolsonaro lobbied President Trump for the designation during a recent visit to Washington. As Flávio Bolsonaro and Lula prepare for the October presidential election, public security is expected to be a key wedge issue.
Simultaneously, Brazilian authorities are conducting domestic operations to dismantle the gangs' financial infrastructure. Prosecutors recently launched a mega-operation targeting fraud and money laundering, following the Hidden Carbon operation which found PCC-linked companies laundering at least 6 billion reais. The Federal Revenue Service further discovered six fintech companies acting as parallel banks that processed 26 billion reais between 2022 and 2025. Experts suggest that targeting financial operations is more effective than violent police raids, which previously left more than 120 people dead in Rio de Janeiro's favelas.