Wednesday , June 26 2019

US sanctions Venezuela’s bank Bandes

Bloomberg

The US imposed sanctions against Venezuela’s national development bank and four financial institutions it controls, alleging it helped prop up the government of the country’s president, Nicolas Maduro.
The penalties were imposed on Banco de Desarrollo Economico y Social de Venezuela, or Bandes, the Treasury Department said.
Treasury Secretary Steven Mnuchin cited the arrest of opposition leader Juan Guaido’s chief of staff, Roberto Marrero, in a statement on the latest sanctions.
“The regime’s continued use of kidnapping, torture, and murder of Venezuelan citizens will not be tolerated by the US or the international coalition that is united behind President Guaido,” Mnuchin said in a statement. “Roberto Marrero and other political prisoners must be released immediately.”
US officials said the move was significant for two reasons. Maduro keeps a substantial portion of money abroad in Bandes accounts, many in Europe, and this will make it much harder for him to use his funds to buy loyalty of Venezuelan military commanders. Sanctioning the bank sends a message that Maduro’s detention of Marrero won’t be cost-free and can’t be a precursor to detaining Guaido himself, they said.
The officials said the Venezuelan government had started moving away from the central bank, shifting funds to Bandes. Treasury had therefore been considering sanctions on Bandes. When the chief of staff was arrested this week, it sped up its move to send an explicit message, contained in Mnuchin’s statement.

SANCTIONS RISK
Banks that transact with Bandes will now face a high risk of sanctions themselves, the officials added. The other institutions sanctioned are: Banco Bandes Uruguay S.A., based in Uruguay; Banco Bicentenario del Pueblo, de la Clase Obrera, Mujer y Comunias, Banco Universal C.A., based in Venezuela; Banco de Venezuela, SA Banco Universal, based in Venezuela; and Banco Prodem SA, based in Bolivia.
Uruguay’s central bank said last month that Venezuela’s government and state-owned companies are using the local unit of Bandes more to handle financial transactions after US sanctions
restricted access to the global banking system.
The sanctions will curb Venezuela’s ability to restructure debt with China because the bank is “the axis of that bilateral relationship,” Angel Alvarado, a lawmaker at the Venezuela National Assembly and member of the finance committee said on Twitter. “This makes it harder for China to bail Maduro out and it makes the debt with China into a bigger geopolitical issue.”
China has extended about $60 billion of loans to Venezuela in the past decade or so to be repaid with crude oil shipments and as financing for bilateral projects. The terms of the loans have been restructured in recent years to extend maturities as Venezuela’s public finances deteriorated.

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