USA starts treating PCC and CV as terrorists from today: what changes

The designation of the PCC (First Command of the Capital) and the CV (Red Command) as Foreign Terrorist Organizations (FTO) by the United States comes into force this Friday (5).

This is the missing step since the announcement made by the US State Department on May 28, when the two factions had already been classified as "Specially Designated Global Terrorists" (SDGT), a classification that came into effect immediately.

The statement, signed by the Secretary of State, Marco Rubio, states that the CV and the PCC are among the most violent criminal organizations in Brazil and that their operations extend beyond Brazilian borders, reaching American territory. According to the US government, the measure seeks to interrupt the flow of resources that finance "violent narco-terrorists".

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What changes with the two classifications
The designations are complementary and have different legal bases. The SDGT, in force since May, is anchored in a decree issued by George W. Bush after the attacks of September 11, 2001, which requires approval from the US Congress and blocks all assets and interests of the factions that are under the control of US persons or entities.

The designation of FTO, which comes into effect today, has been provided for in the Immigration and Nationality Act since 1996, requires notification to Congress and makes it a federal crime to provide "material support" to groups.

In practice, the two classifications enable asset freezing, prohibit transactions with designated groups, prohibit the entry of members into the United States - who can be deported - and oblige American financial institutions to report funds linked to the factions to the Treasury Department. Violations of these measures may result in civil and criminal penalties.

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The measure does not change Brazilian legislation. Unilateral classifications by one country do not produce automatic effects on the legal system of another: to be valid in Brazil, they would need to be incorporated by law, ratified treaty or binding resolution of the UN Security Council - none of these hypotheses are currently underway in the country.

With the decision, PCC and CV join a list of more than 90 organizations treated as foreign terrorists by the US, alongside groups such as Hamas, Hezbollah, Al Qaeda and the Islamic State, as well as Latin American cartels such as Sinaloa and Tren de Aragua, included in the wake of the Trump administration's pressure against drug trafficking in the region.

Trump government claims to want to "eliminate" the factions
In an interview with CNN, State Department spokeswoman Amanda Roberson stated that President Donald Trump wants to eliminate the PCC and the CV and that he will use all available tools to combat criminal groups that operate in the region and threaten US security.

According to the American representative, the government identified the activities of Brazilian factions in 12 US states, without detailing which ones. She assigned this specification to the judicial authorities.

On the Brazilian side, the Palácio do Planalto's assessment is that there is no possibility of the US retreating and that the entry into force of the measure should not bring immediate damage to the country's economy. Behind the scenes, assistants to President Luiz Inácio Lula da Silva began to assess that the decision had Trump's approval - and not just Rubio, whom the PT member has already called a "frustrated Latin American".

The Lula government's main concern is that the classification opens up space for unilateral US interventions on Brazilian soil under the pretext of combating terrorism - a fear amplified after the capture of Nicolás Maduro, Venezuelan dictator, in January this year.

The confirmation of Lula's visit to the G7, in France, between the 15th and 17th of this month, opens space for a possible bilateral meeting with Trump, amid discussions about the new tariff proposal and the classification of factions.

The government states that there are still no closed negotiations for the meeting.

Brazilians in favor of the US measure
AtlasIntel survey released on June 3 shows that 53.1% of Brazilians approve of the classification of the PCC and the CV as terrorist organizations, compared to 44.7% who disapprove.

The population, however, is divided on the effects: 47.7% see a risk to national sovereignty and 44.7% consider the measure necessary to strengthen the fight against crime. Regarding whether the decision violates sovereignty, the result is a technical tie - 49.7% say no and 49.4% yes.

In another section from the same institute, 55.9% of those interviewed say that the Brazilian government itself should classify the factions as terrorists, while 40.8% are against it.

Regarding the effect of the American measure on the country's security, 29.6% think it will have no relevant impact and 26.8% believe it will improve significantly; 17.2% believe it could get worse. The survey interviewed 1,273 people between May 30 and June 3, with a margin of error of 3 percentage points.

The PoderData survey followed the same direction: 53% of Brazilians consider the US decision to be good for Brazil, 33% see it as bad and 14% were unable to respond. The survey interviewed 2,500 voters in 166 municipalities in the 27 units of the Federation, between May 30th and June 1st, with a margin of error of 2 percentage points.

US decision divides security forces
Among police officers and investigators, the measure generates opposing readings. Part of the security forces see the designation as a way to financially stifle the factions; another part fears harm to cooperation with the USA. One of the most cited points is the possibility of the dialogue, currently carried out between the Federal Police and the FBI, migrating to the CIA, which, in practice, would make it difficult for classified information to be shared with the current agility.

Other experts warn of a kind of "trivialization" of the concept of terrorism. Brazilian anti-terrorism law would require, according to them, ideological motivation - political or religious - to form an organization, while factions are characterized by financial focus. The general director of the PF, Andrei Rodrigues, for example, has already taken a stance against equating factions with terrorist groups.

For jurists and prosecutors interviewed by CNN, the central point is motivation. PCC and CV bring together features that bring them closer to terrorist groups - parastate structures, "crime courts", territorial dominance and coordinated attacks - but, according to some experts, they lack the political or ideological element that defines terrorism. Prosecutor Lincoln Gakiya summarizes, to CNN, that the factions' objective is economic: to dominate territories to increase profits.

The distinction has legal support. The Anti-Terrorism Law (13,260/2016) classifies as terrorism acts motivated by xenophobia, discrimination or prejudice, or aimed at coercing authorities and attacking the democratic order. Therefore, the factions continue to be prosecuted based on the Criminal Organizations Law (12,850/2013), the Drug Law (11,343/2006) and the Penal Code.

Experts such as prosecutor Raissa Maximiliano and jurist Helena Folgueira consider that expanding the concept could generate legal uncertainty, although the American classification, if used well, could reinforce financial tracking.

The Brazilian Public Security Forum (FBSP) recognized the sovereignty of the American decision, but warned, in a note, that the issue has profound implications for the economy, the financial system and international cooperation mechanisms, and criticized the electoral use of the issue.

PCC CV TERRORISTS - Illustration generated by AI
The risks to the economy and the financial system
In the economic field, the main concern is with the financial system.

For prosecutor Lincoln Gakiya, if the US treats the PCC as a terrorist organization, institutions that have traded funds or securities under investigation for links to the faction - as in the cases of Reag and Banco Master - could be the target of sanctions, affecting practically the entire national financial system.

Economists and jurists point to three major effects: increased risk perception, more uncertainty and increased costs.

Robson Gonçalves, from FGV, recalls that simple suspicion would be enough to impose risk premiums and stop dollar transactions that go through American intermediaries. Professor Priscila Caneparo, from UFPR, assesses that Brazil tends to become a less attractive destination for foreign investment.

For the private sector, the experts' message is to immediately reinforce internal controls. The concept of "material support" in American legislation is broad and covers the sale of products, services and credit operations, according to Thiago Jabor Pinheiro, partner at Mattos Filho, who highlights that the risks are not limited to the financial system and reach the entire economy.

Another practical consequence is that the new designation should raise the compliance bar. For experts such as Servulo Mendonça (Holding SM), Pedro Henrique Rezende (Aroeira Salles) and Gustavo Niskier (Chalfin Goldberg), banks and companies with international exposure will need to deepen the checking of final beneficiaries and the prevention of money laundering.

More serious than formal punishment, they say, is the reputational risk: foreign banks could reduce limits, terminate relationships or demand additional controls from Brazilian institutions, with the loss of access to dollar compensation seen as the most severe sanction.

There is also debate about payment methods. The Minister of Finance, Dario Durigan - who stated that he did not consider PCC and CV to be terrorist organizations - raised concerns about a possible risk to Pix. Experts, however, believe that what matters is the type of relationship companies have with people and companies linked to the factions, and not the means by which the resource is transported.

*With information from: Alan Cardoso, Beatriz Oliveira, Duda Cambraia, Filipe Pereira, João Ker, João Nakamura, Jussara Soares, Léo Lopes, Lucas Schroeder, Malu Baccarin, Manuella Dal Mas, Poliana Santos and Tiago Tortella - and Reuters.

Source: CNN