The designation of Comando Vermelho (CV) and Primeiro Comando da Capital (PCC) as terrorist organizations by the US government has significant compliance impacts for Brazilian financial institutions, fintechs, securities brokers, and asset managers.
On May 28, 2026, Secretary of State Marco Rubio announced the designation of CV and PCC as Specially Designated Global Terrorists (SDGTs), effective immediately, and the intention to formally designate them as Foreign Terrorist Organizations (FTOs), effective June 5, 2026.
The designations were issued based on Executive Order 13,224 and Section 219 of the Immigration and Nationality Act, and resulted in the inclusion of the organizations on the Specially Designated Nationals and Blocked Persons List (SDN List) of the OFAC (Office of Foreign Assets Control) of the U.S. Treasury Department.
As a result of the designation, Brazilian financial institutions, fintechs, DTVMs, and asset managers should pay attention to the following compliance impacts:
1. Risk of “De-Risking” and Cancellation of Access to the U.S. Financial System. All dollar transactions cleared, intermediated, distributed, or invested through a U.S. institution are under the jurisdiction of OFAC. Brazilian financial institutions, fintechs, DTVMs, and asset managers that process transactions and investments directly or indirectly related to CV or PCC expose their American correspondents and service providers to the risk of violating US counterterrorism rules.
If an actual or potential transaction linked to terrorist organizations is identified, the immediate consequence will be “de-risking.” That is, the preventive termination of US correspondent, intermediary, and investment accounts of Brazilian institutions perceived as high-risk, with immediate operational impacts.
2. Elevation of KYC/AML Standards. Increased attention to Know Your Client (KYC) and Anti-Money Laundering (AML) procedures should be given by (i) financial institutions, their operations in general, including account opening, transactions and credit with clients (individuals and companies), (ii) fintechs, such as payment institutions (IPs), in payment processing services, and (iii) DTVMs and fund managers, in investments, credit transactions, among others, and the capitalization by shareholders (intermediate and final beneficiaries).
3. Immediate Obligation to Freeze Assets, Accounts and Transactions. The inclusion of CV and PCC on the SDN List imposes on Brazilian financial institutions, fintechs, DTVMs and fund managers with access to the American financial system the obligation to immediately freeze (strict liability) accounts, transactions and/or resources related to the designated organizations, individuals and companies linked to them, directly or indirectly.
The blocking is not optional nor subject to the institution’s discretion: it is a direct legal obligation, the non-compliance of which is subject to fines and criminal liability in the US. The blocked amounts must be reported to the OFA in accordance with the regulations of the counterterrorism program.
4. Risk of Material Support, Criminal Liability and Duty of Disclosure. The designation as Foreign Terrorist Organizations (FTOs) criminalizes, in the US, the provision of any financial service to members of the designated organizations, even without the intention of financing terrorist acts. This is called material support, punishable potentially with prison.
Brazilian financial institutions, fintechs, DTVMs and asset managers have a duty to disclose transactions with designated organizations and the potential legal and operational consequences in Brazil and the US.
The designation of CV and PCC as terrorist organizations by the US government has significant compliance impacts. Financial and capital market institutions in Brazil must implement immediate controls and actions to avoid operational, financial and reputational risks.
