The new architecture of crime: what is next for the FPCA anti-corruption enforcement in Brazil?

Leopoldo Pagotto
Freitas Leite e Avvad Advogados, São Paulo
pagotto@freitasleite.com.br

Over the past two decades, organised crime in Latin America has undergone profound transformations in scale, structure and operational sophistication. While intensive Foreign Corrupt Practices Act (FCPA) enforcement from 2000 to 2020 exposed widespread corruption across the region, these scandals appeared largely disconnected from traditional organised crime networks. Brazil’s Operation Car Wash exemplifies the perception: despite multiple intersection points, corruption seemed confined to white-collar professionals operating independently from violent criminal organisations.

This institutional blind spot prevented authorities from recognising a critical evolution. What was once understood through the weapon-drug nexus, limited to marginalised urban peripheries, has evolved into sophisticated networks embedded within the formal economy. Brazil’s organised crime, particularly the Primeiro Comando da Capital (PCC), has shifted from a predominantly violent, territorial model to one increasingly reliant on economic infiltration and corporate methodologies.

The operational evolution of PCC: from prisons to boardrooms

The PCC’s trajectory illustrates this transformation. Initially established within São Paulo’s prison system in 1993, the organisation’s founding statutes emphasised internal solidarity and mutual protection among incarcerated members. However, the PCC systematically expanded beyond traditional illicit markets such as drugs and arms trafficking, to develop what can best be described as parallel governance structures.

Unlike Comando Vermelho (CV), which maintains a primarily territorial and militarised approach, the PCC adopted a rationalised, economically integrated strategy. While CV’s structure generates relatively few direct touchpoints with corporate supply chains, the PCC has deliberately infiltrated formal economic sectors, operating through legitimate corporate vehicles and exploiting public procurement systems.

The evolution follows patterns observed in other contexts: the Italian Mafia’s mid-20th century transition in the US offers instructive parallels. The PCC increasingly exercises control through economic influence, political connections and social co-optation rather than overt violence. The organisation now operates as a rational market actor, utilising financial sophistication and corrupt networks to achieve strategic objectives.

Infiltration of formal economic structures

Evidence of PCC’s economic integration has emerged across multiple sectors. In the São Paulo metropolitan region, local bus concessions have been subject to repeated law enforcement operations for involvement in large-scale money laundering schemes. Similarly, investigations into logistics providers and port operations – particularly in Rio de Janeiro – have revealed how organised crime exploits infrastructure and supply chain vulnerabilities.

These cases demonstrate that alleged improper payments to expedite permits or customs operations often coexist with broader criminal enterprises involving smuggling and trafficking. Security service providers represent another critical vulnerability, frequently maintaining connections with both law enforcement and organised crime networks.

Traditional ‘know your client’ (KYC) procedures designed to detect terrorism financing or drug trafficking may prove insufficient against Brazilian organised crime groups operating through legitimate corporate structures. The PCC’s methods specifically exploit such blind spots: shell entities, financial intermediaries and investment vehicles that resemble standard commercial arrangements.

FCPA enforcement evolution: from corruption to criminal enterprise

Recent announcements by the US Department of Justice (DoJ) and Securities and Exchange Commission (SEC) signal a fundamental shift in FCPA enforcement strategy for Latin America. The DoJ has emphasised two principal axes: individual accountability; and strategic pragmatism in international cooperation.

Individual accountability involves expanding the use of the Racketeer Influenced and Corrupt Organizations (RICO) Act – traditionally applied against criminal organisations – to transnational corruption schemes. This represents a significant departure from corporate-focused enforcement, targeting individuals within corrupt networks. Strategic pragmatism in international cooperation prioritises cases with broader systemic impact or connections to organised crime networks, even when involving actors outside the traditional US jurisdiction.

The shift carries direct implications for multinational subsidiaries operating in Brazil. Companies may now face simultaneous application of both FCPA and RICO provisions, particularly where corruption intersects with organised crime. A multinational with US assets or listings involved in situations where bribes facilitate smuggling or trafficking could trigger Brazil-US cooperation under substantially stricter standards.

The convergence between anti-corruption enforcement and organised crime prosecution reflects an emerging reality: these phenomena are no longer analytically separable.

Institutional responses and structural gaps

Brazil has gradually internalised international compliance standards, primarily through the Office of the Comptroller General (CGU) and Ministry of Justice, in cooperation with the OECD and Financial Action Task Force (FATF). Programmes focusing on corporate integrity, administrative accountability and international legal cooperation have expanded considerably.

However, implementation remains uneven. While large corporations and foreign subsidiaries typically adopt robust compliance mechanisms, small and medium-sized enterprises – often serving as intermediaries in procurement chains or logistics operations – represent persistent blind spots. These gaps create precisely the vulnerabilities exploited by organised crime.

Critical institutional challenges persist:

• beneficial ownership registry – despite commitments, Brazil lacks a fully functional centralised beneficial ownership registry. The Federal Revenue Service (RFB) promised implementation for 2025, but delays continue;
• bureaucratic fragmentation – limited investigative resources and fragmented institutional coordination impede effective enforcement; and
• informal governance – in certain regional economies, weak local oversight enables criminal actors to exert de facto control over logistics chains, creating operational risks that coexist uneasily with formal regulatory frameworks.

Compliance implications for multinational corporations

The convergence between organised crime and corruption fundamentally alters risk profiles for companies operating in Brazil. Traditional compliance frameworks focused on bribery prevention may prove inadequate where criminal infiltration occurs through seemingly legitimate business relationships.

Multinational corporations must enhance:

• third-party due diligence – beyond standard corruption risk assessments, companies must verify beneficial ownership and evaluate potential connections to organised crime networks, particularly for intermediaries in logistics, security and distribution sectors;
• supply chain monitoring – sectors exposed to PCC infiltration, such as transport, logistics, port operations, waste management, require enhanced scrutiny and continuous monitoring rather than periodic audits;
• cross-border information sharing – cooperation with law enforcement, including proactive disclosure of suspicious patterns, becomes essential rather than optional; and
• integrated risk assessment – companies should evaluate whether local partners or contractors operate in jurisdictions or sectors where organised crime maintains significant influence, incorporating this analysis into enterprise risk management frameworks.

Reimagining governance in an interconnected world

The Brazilian case demonstrates that organised crime has evolved beyond violence and illicit markets to become a rational player in the global economy. The evolution challenges traditional distinctions between corruption enforcement and organised crime prosecution.

Effective responses require more than criminal enforcement; they necessitate institutional coordination and unprecedented levels of international cooperation. Simply criminalising conduct proves insufficient – credibility must be restored to institutions regulating global trade and finance.

Strengthening international cooperation through FCPA enforcement, OECD frameworks and FATF standards must be accompanied by internal reforms. These include increased transparency, reinforced due process and closure of institutional gaps that criminals systematically exploit.

For multinational corporations, this new architecture of crime requires a fundamental recalibration of compliance approaches. The line between legitimate business and criminal enterprise has become uncomfortably thin in certain Brazilian sectors. Only through integrated public-private cooperation can the international community ensure that globalisation serves the rule of law rather than undermining it.

The question is no longer whether corruption and organised crime intersect in Brazil – evidence confirms they do. Rather, the question is whether institutions, both public and private, can adapt quickly enough to address this convergence effectively.