The evolution of the fight against organised crime in Brazil: from criminal factions to complex financial structures

Natalia Genina Lugero de Almeida
Pinheiro Neto Advogados, São Paulo
nlugero@pn.com.br

Luisa Angélica Mendes Mesquita
Pinheiro Neto Advogados, São Paulo
lmesquita@pn.com.br

Gabriel Facio Dinamarco Machado
Pinheiro Neto Advogados, São Paulo
gdinamarco@pn.com.br

The legal framework: from the Palermo Convention to Law No. 12,850/2013

The fight against organised crime in Brazil has long been the subject of intense legal and political debate. The first major milestone occurred with Brazil’s accession, in 2004, to the Palermo Convention (the United Nations Convention against Transnational Organised Crime), which introduced the concept of a ‘criminal organisation’ into the Brazilian legal lexicon, which was then a novelty in domestic law.

Despite ratifying the treaty, Brazil enacted Law No. 12,850/2013 nine years later, formally criminalising participation in a criminal organisation. During this interim period and in light of the constitutional principle that international treaties do not by themselves create criminal offences, Brazil was unable to punish such conduct, notwithstanding its status as a Convention signatory. The enactment of Law No. 12,850/2013, therefore, marked a decisive turning point, inaugurating a new phase in the fight against organised crime.

Operation Car Wash and the paradigm shift

Traditionally, organised crime in Brazil was associated primarily with criminal factions engaged in drug trafficking and violent crimes. This paradigm shifted in the mid-2010s with the emergence of Operation Car Wash (Operação Lava Jato), which uncovered a complex criminal scheme involving executives working for Petrobras (a Brazilian majority state-owned multinational corporation in the petroleum industry), politicians, foreign exchange dealers and financial intermediaries. The Operation brought renewed attention to tools available to deal with these types of crimes, such as plea bargaining agreements (many of which were later annulled), and sparked extensive public and political debate on institutional corruption and organised crime.

After a period of relative stagnation, marked by the annulment of several Operation Car Wash-related prosecutions and renewed focus on traditional criminal factions, the debate was reignited in 2024, with the financial market emerging as a central arena of criminal activity.

The financial turn: Operation Carbono Oculto

In 2025, Operation Carbono Oculto targeted money laundering schemes embedded in the fuel supply chain. A group linked to a criminal faction reportedly gained control over gas stations, sugar energy plants and fuel distributors, transforming legitimate businesses into components of a sophisticated ‘financial refinery’. According to the Brazilian Federal Revenue Office, approximately 1,000 fuel stations across ten states transacted BRL 52bn between 2020 and 2024, with the tax payments made being grossly inconsistent with the reported revenues. The scheme relied heavily on payment institutions, Fintechs and at least 40 investment funds that were structured in successive layers to conceal beneficial ownership and dissipate financial trails.

These operations revealed a fundamental transformation in the profile of organised crime in Brazil: a shift away from narcotrafficking and violent offences towards the systematic infiltration of core economic sectors through the use of complex financial structures, including asset managers, securities brokers and investment fund managers.

Operation Compliance Zero and the new symbiosis

This transformation was reiterated by Operation Compliance Zero, which is focused on investigating allegations of large-scale fraud, reckless management and money laundering, reportedly involving Banco Master, its controlling shareholder, Daniel Vorcaro, public officials connected to Banco de Brasília (BRB), politicians and members of the judiciary.

Together, these cases reveal a new symbiosis between traditional criminal factions and formal market participants, particularly those within the financial system, allegedly aimed at laundering the proceeds from drug trafficking and other serious crimes.

The new Anti-Faction Law (Law No. 15,358/2026)

The magnitude of these events has propelled the debate beyond legal circles and into the public sphere, culminating in the establishment of a Parliamentary Commission of Inquiry. In response and arguably influenced by political populism, in March of this year, the Brazilian Congress enacted Law No. 15,358/2026, otherwise known as the ‘Anti-Faction Law’ or the Legal Framework for Combatting Organised Crime.

Law No. 15,358/2026 has introduced a structural shift in Brazilian criminal policy. Its most significant innovation is the creation of the ‘structured social dominance’ offence, which redirects criminal repression from mere associative conduct to the exercise of organised illicit power, characterised by territorial, social, economic or institutional control through the use of violence or serious threats. Punishable by 20 to 40 years’ imprisonment, the new offence targets criminal phenomena, such as factions and militias, which interfere with the provision of essential public services and economic activities, imposing an alternative regime of power that antagonises the state's power structure — a true parallel state.

On the procedural and investigative front, the law has significantly expanded the asset-freezing powers available at the investigative stage, enabling the early freezing of assets, financial accounts and access to payment systems. It also provides for stringent restrictive measures against companies that are in any way involved in organised crime.

The law has been the subject of criticism, including lawsuits alleging its unconstitutionality, particularly on the grounds that it includes disproportionate penalties and overly restrictive criminal measures.

Indeed, the constitutionality of several provisions contained within the new law is highly questionable and the effectiveness of their application is not yet clear. What is clear, however, is the objective of extending accountability to the economic and financial sphere, meaning that banks, Fintechs and payment institutions can be deemed to be central actors in the containment of illicit financial flows.

Conclusion: a regional and global challenge

In sum, Brazil has consolidated a criminal enforcement model that is centred on the political economy of illicit activity. Operations Carbono Oculto and Compliance Zero are not isolated events, they are part of a broader reconceptualisation of criminal policy. By shifting the focus from incarcerating low-level actors to confiscating assets and increasing corporate accountability, the Brazilian state acknowledges a fundamental reality: the power of organised crime derives less from territorial control than from its capacity to circulate, launder and reinvest capital.

Brazil’s experience resonates across Latin America, where countries such as Colombia and Mexico face similar challenges in regard to tackling the convergence of organised crime and formal financial systems. The regions’ shared vulnerabilities, namely porous borders, rapidly expanding Fintech ecosystems and evolving money laundering techniques, underscore the need for coordinated transnational responses and mutual legal assistance frameworks.

Whether Brazil’s strategy will withstand the political, economic and legal pressures that inevitably accompany it remains an open question. What is certain, however, is that the evolving nature of organised crime demands equally adaptive legal frameworks, ones that target not only the actors but the financial architecture that sustains them.