The designation of the PCC and Comando Vermelho as terrorist organizations by the United States opened a practical question few people can answer: how, exactly, does a company end up on a U.S. sanctions list? Is there any warning? Is there a right to defense before the freeze? How long does it take? The answer is uncomfortable, and it is better to hear it now.
Start with the uncomfortable part: in the procedure that most affects companies, there is no summons, no prior hearing and no notice to the target. Inclusion on a U.S. sanctions list is an administrative act, not a judicial sentence. By the time the company finds out, the decision has already taken effect and the assets are already frozen. Anyone expecting an adversarial proceeding before the freeze is waiting for the wrong step.
A common confusion needs to be cleared up. Designating the PCC and Comando Vermelho as terrorist organizations does not, by itself, place any Brazilian company on a list. What the designation does is create the legal trigger that can later reach third parties through different paths. Understanding these paths is what separates the company that protects itself from the one that only discovers the problem when the bank cuts off its operations without explanation.
The three frontsThree different doors, three agencies, three logics
There is no single sanctions process. There are parallel tracks, run by different agencies, that can act independently or in combination. Confusing one with another leads a company to prepare for the wrong door.
- Administrative act, with no prior conviction
- Legal basis in IEEPA and Executive Order 13224
- Freezes assets and bars from the U.S. financial system
- It is the front that most affects companies
- Decision of the Secretary of State
- Basis in Section 219 of the immigration law (INA)
- Notifies Congress and publishes in the official gazette
- Opens the door to criminal and civil liability
- Criminal prosecution of those who provide material support
- The material support offense can reach 20 years
- Requires a proceeding with evidence and due process
- It is the only track with a trial in the classic sense
U.S. law defines material support deliberately broadly. It is not just about giving money or weapons. It includes tangible and intangible goods and virtually any service: lodging, transportation, communication, training, consulting, technical advice, documents, personnel and financial services. The only clear exceptions are medicine and religious materials.
In practice, this reaches ordinary commercial gestures. Some examples that most companies never imagine as a risk:
- Renting a room, a warehouse or a property to a front company linked to the organization.
- Transporting cargo, making deliveries or providing logistics without knowing who the final recipient is.
- Processing a payment, opening an account, advancing a receivable or intermediating a transaction.
- Providing accounting, legal advice, consulting or IT services to someone in the organization's chain.
- Selling communication equipment, software, phones or vehicles that end up in the group's hands.
- Hiring, seconding or outsourcing personnel who end up serving the criminal structure.
- Hosting, feeding or providing operational support to members, even through third parties.
The frightening point: this does not depend on size or sector. A carrier, a real estate agency, an accounting firm, a fintech, an electronics store or a small service provider can be caught just as much as a multinational. In the criminal sphere, conviction requires proving there was knowledge that it involved a designated organization, and so-called willful blindness, ignoring obvious signs, counts as knowledge. In the sanctions sphere, civil liability can arise even without intent. That is why the real defense is prior due diligence on whom you do business with.
The designation of the PCC and Comando Vermelho activated the first two doors in late May and early June 2026: the terrorist organization label by the State Department and the global terrorist framing, which triggers OFAC's financial block. The third door, the criminal one, depends on its own investigation and proceeding.
The procedure that scares the mostHow OFAC's path works, step by step
This is the track that can place a company on the SDN list. It does not go before a judge prior to the freeze. Here is the real sequence, from the silent beginning to the effects on third parties.
The central point is step 3. The designation is an administrative act, not a conviction. The absence of prior notice in this procedure has already been challenged and upheld by U.S. courts, which held that the freeze may precede notification to preserve the effectiveness of the measure. In other words: block first, discuss later.
OFAC automatically treats as blocked any company whose combined ownership by sanctioned persons reaches 50% or more, directly or indirectly, even if that company's name does not appear on any public list. There need not be a single sanctioned majority owner.
- Two sanctioned persons with 25% each in the same company: the sum reaches 50% and the company is considered blocked.
- Indirect ownership counts: if a sanctioned person holds 50% of a holding company that owns half of another company, that chain is captured.
- The rule looks at ownership, not control. Someone who controls without holding 50% is not automatically blocked, but OFAC recommends caution and may designate later.
The practical effect is harsh: a company may pass a simple name check cleanly and still be blocked by the ownership structure behind it. That is why due diligence on ultimate beneficial owners is worth more than a name check.
The other doorThe FTO procedure, run by the State Department
The foreign terrorist organization label follows its own path, more formal and with a step the OFAC procedure does not have: passing through Congress.
- Identification of the organization by the State Department's counterterrorism office.
- Building the administrative record that supports the designation.
- Decision of the Secretary of State, in consultation with the Attorney General and the Treasury.
- Notification to Congress, with a legal waiting period before publication.
- Publication in the official gazette, the moment the designation takes effect.
- Judicial review possible afterward, within a short deadline, before the competent federal court.
Note the difference in logic: here the target is the criminal organization, not the company. The risk to the private sector comes indirectly, when an operation, a payment or a supply chain touches, even indirectly, the designated organization.
What every manager asksThree questions, three direct answers
- Does the company receive notice of an investigation? In the OFAC procedure, no. The target is not notified before the freeze. In the criminal sphere, yes, there is a proceeding with defense.
- How does the company find out it was sanctioned? Through publication in the official gazette and the public online list, or in practice, when a bank or partner cuts the relationship after checking the list. INCC provides tools to check sanctioned parties and a self-assessment that lets a company understand its current situation and risks, acting before the problem begins.
- How long does it take? The designation takes effect immediately upon publication. Getting off the list is the opposite: it can take many months and, in difficult cases, years.
Check the list and assess your risk before the problem
INCC offers tools to check sanctioned persons and companies and a self-assessment that shows, in a few steps, your organization's current situation and points of exposure. It is a way to act at the stage when there is still time to react, before the publication that freezes everything.
Go to www.incc.org.brThe way backHow a company asks to be removed from the list
There is an administrative removal procedure (delisting). The company submits a petition to OFAC demonstrating that there is no longer a basis for maintaining the block, or that there was an identification error. The agency reviews and decides.
Sources and reliability classification
Classification by the NATO (Admiralty) code, from the most reliable source (A1) to the least. A1 indicates an official source and confirmed information; B2, a usually reliable source and probably true information; C3, a fairly reliable source and information to be confirmed.
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