Executive Summary
The designation of the PCC and CV as terrorist organizations by the United States is unlikely to be an effective strategy against organized crime. Although the measure expands the legal basis for sanctions and financial scrutiny, it risks weakening existing police cooperation between Brazilian agencies, the FBI, and the DEA by shifting the issue toward national security and intelligence channels. It also fails to address the main drivers of organized crime, including high drug demand, transnational trafficking networks, inequality, and limited opportunities in vulnerable communities. The most probable impacts of these measures are greater financial monitoring, sanctions risk, and pressure on Brazilian banks and companies.
An Expected Move Against Brazil’s Criminal Factions
The designation of the PCC and the CV as terrorist organizations by the United States (US) is an ineffective strategy for combating organized crime for three main reasons. First, by treating the issue as a matter of national security and no longer as a matter of police cooperation, the measure tends to undermine the existing cooperation between the Federal Bureau of Investigation (FBI), the Drug Enforcement Administration (DEA), and competent Brazilian agencies. Second, it also fails to address the factors that sustain organized crime, for example the high demand for drugs. Third, the policy does not address the social factors that lead to the growth and maintenance of organized crime in Brazil.
At the end of May, the US classified the Brazilian factions Primeiro Comando da Capital (PCC) and Comando Vermelho (CV) as terrorist organizations. This measure’s practical implications make it a federal crime for a person or organization in the US to provide material support or resources to a Foreign Terrorist Organization (FTO). In addition, these measures give the US government a legal framework to sanction Brazilian organizations that have or have had links to either of the two criminal factions. However, these criminal organizations have infiltrated into strategic sectors of the formal Brazilian economy, such as real estate, fuels, and agribusiness; therefore, there are concerns from specialists and bureaucrats regarding possible sanctions on companies that do not even know they have financial or commercial ties with both organizations’ affiliates, and its consequential damage for the Brazilian economy.
The Wrong Tool for the Wrong War
This new classification of the PCC and the CV has tended to harm the cooperation already existing between Brazilian and American agencies. Investigators from the FBI, DEA, and Brazilian investigative agencies exchange information in order to produce evidence that is valid in court and supports arrests and extraditions of members of criminal factions. By transforming the issue into a military matter, the Central Intelligence Agency (CIA), the Pentagon, and the US Treasury come to play a central role in the administration of the fight against organized crime, working under classification rules that interrupt the current flow of information between the FBI, DEA and Brazilian investigative agencies.
The militarization of the fight against organized crime is unlikely to produce significant results, given that it does not address structural factors that sustain criminal activity, such as the high demand for drugs and the transnational character of organized crime. Brazil is not a major producer of cocaine, so the country serves as a logistical corridor for the flow of drug trafficking, mainly to Europe. Therefore, this classification of terrorist organizations is unlikely to have a significant impact on the American drug market.Moreover, both the CV and the PCC are transnational criminal organizations. The encouragement of unilateral action by the US at the expense of international cooperation and the militarization of the issue therefore makes it more difficult to dismantle criminal networks.
The Socioeconomic Roots of Brazil’s Criminal Factions
Moreover, Trump’s strategy for dealing with organized crime in Latin America has failed to address the structural issues perpetuating organized crime in these societies. In Brazil, high social inequality and lack of access to basic resources for people in situations of socioeconomic vulnerability are determining factors that encourage adherence to criminal organizations in order to achieve social mobility. According to interviews conducted with members of criminal organizations in Brazil in 2025, 80 percent of interviewees were born and raised in peripheral communities, and 64 percent did not reach high school. In an article in Foreign Policy, Jeremiah A. Carew argues that the best way to combat criminal networks is through programs, as part of an integrated counternarcotics approach, that are capable of promoting development in more vulnerable areas that are more susceptible to criminal action.
What We Should Expect
The designation of Brazilian criminal groups as terrorist organizations tends to produce more relevant implications in the financial and intelligence fields than in the military field. Although there is a risk that this classification may be used to justify more aggressive actions in the region, such as military operations under the pretext of combating drug trafficking, this scenario seems less viable in the Brazilian case due to the high political and economic cost of a direct confrontation with Brazil. Unlike countries such as Mexico, Colombia, or Venezuela, Brazil maintains a broad and integrated economic relationship with the United States, involving supply chains, companies, and trade flows that could be harmed by excessively aggressive measures. These economic impacts may impose political costs, as they will affect a large segment of the population. For this reason, the most likely consequence is an increase in regulatory pressure and American intelligence activity regarding money laundering, concealment of assets, and financial structures linked to organized crime. In this context, Brazilian banks will likely face greater scrutiny from the US Treasury and the risk of sanctions if they are associated, even indirectly, with individuals linked to criminal factions. This has the potential to weaken the perception of Brazil as a relatively safe destination for foreign investors.
Recommended Readings
- Oliver Stuenkel (2026) Why Is Trump Targeting Brazilian Gangs?
- Jeremiah A. Carew (2026) Trump’s Drug War Tactics Don’t Work
- Spektor and Montagner (2026) This Is How the Cartels Win