Why the government sees a risk to Pix after the US classifies PCC and CV as terrorists

The government of President Luiz Inácio Lula da Silva fears that the United States’ decision to classify the Comando Vermelho (CV) and Primeiro Comando da Capital (PCC) factions as terrorist organizations will pose risks to Pix.

The fear is related to a possible allegation by American authorities that this type of transaction facilitates the circulation of money from organized crime, which could serve as an argument for possible sanctions on banks and other financial institutions through which funds flow via Pix.

The matter has been closely monitored and there are still doubts about what tools the US could use to interfere with the payment model and the potential effects.

Two ministers heard by the Globe reported concern about the topic. One of them stated that the government classifies possible consequences of the US decision in relation to Pix as “tremendous serious. The other went further and cited an “imminent risk” for Pix.

The apprehension is echoed among Lula’s closest assistants at the Palácio do Planalto and is based on the fact that the White House has already demonstrated its opposition to the payment method developed by the Brazilian government.

In July last year, the Office of the US Trade Representative opened an investigation to investigate “alleged unfair financial practices” that would harm US financial giants, especially credit card brands. The American investigation is carried out under Section 301 of the country’s Trade Law.

The Pix topic is considered sensitive to the Brazilian government and has a high capacity to raise public awareness. When Lula was with Donald Trump at the White House at the beginning of the month, he asked the US to end the trade investigation. Internally, the topic has been led by the Minister of Industry and Commerce, Márcio Elias Rosa, and Jamieson Greer, United States Trade Representative, who hold frequent conversations on the topic.

The government’s concern with the matter was explained in the official note released this Friday, in the government’s first official reaction after the North American decision:

“Unilateral, non-negotiated measures can weaken the fight against criminals and generate actions that put the lives of people who have nothing to do with crime at risk. They can reduce the ability to share information between the police. They can affect our financial system and national innovations like Pix, which bother foreign interests.”

The subject should also inform speeches in defense of the country’s sovereignty. The payment system is widely accepted by society and is seen as a mechanism that reduces bureaucracy in economic transactions. The government will from now on focus on the political dispute that the Bolsonaro family acts against national interests and interfered so that the American government classified Brazilian factions as terrorists.

The Lula government stated in a statement that it rejects any “interference” and that sovereignty is “non-negotiable”. The text attacks the Bolsonaro family and says that the measure was taken after “political manipulation” carried out by “false patriots, involved with organized crime”

“The security of our population is too important to be politically manipulated by traitors who try to confuse these concepts. By false patriots, involved with organized crime, who ask foreign authorities to interfere in Brazilian affairs”, says the Planalto note.