Santa Elena de Uarién, October 24th 2014 (Venezuelanalysis.com) – Venezuelan president Nicolas Maduro has announced a legal reform to extend prison sentences to 10-14 years for anyone caught smuggling basic goods or medicines in Venezuela. He also proposed an adjustment to the Fair Prices Law so that selling basic regulated goods and medicines by informal vendors would be illegal.
The measures were announced on Thursday following the seizure of two large warehouses jam-packed with basic goods and medicines that were destined for Colombia, authorities say.
One of the two warehouses seized by the government measured approximately 9,000 square meters (just shy of 30,000 square feet) and it contained 14,000 syringes of varying sizes, nearly10 million surgical and disposable latex gloves, 5,000 wheelchairs and other basic goods. “Enough to stock Venezuela for a year” read a headline from the state-owned newspaper Correo del Orinoco.
While the names of the owners of these warehouses have yet to be released, President Maduro stated that “state security bodies are actively looking for them and that in accordance with the law, they will be captured and turned over to public prosecutors.” He also announced that the owners are members of Fedecamaras, Venezuela's Chamber of Commerce, which serves as an association of the most powerful sectors of industry and business in the country.
According to Maduro, the owners of the warehouses had received US $236 million at preferential rates from the government, presumably for importing goods destined for Venezuelan consumers.
This recent seizure contributes to the 26,086 tons of food alone that have been seized by the government this year, 35 percent of which was confiscated near state boundaries through Operation Border Clash. Gasoline, soap, medicine, medical equipment and cement are among other goods that are considered contraband. Over 15,909 tons of cement have been confiscated by government officials in 2014 so far which Maduro announced was enough “to have built 2,600 houses.”
Standing in front of the seized goods, President Maduro announced new reforms to address the trafficking of contraband. First, he reaffirmed the need for “the fair prices law” which sets maximum prices on basic goods, but that the prices will be adjusted (most likely increased) beginning November 1st. According to independent leftist website Aporrea, these new price controls “would be able to be revised regularly and adjusted according to production costs so that it won't repeat the problem of prices being frozen in artificial ways, nor would it encourage selling goods at speculative prices.”
Maduro also announced an executive decree that will immediately make it illegal for informal street vendors to sell basic necessity foods and medicines.
“The speculation, the sale of medicines and basic goods in the streets has to come to an end...Suddenly, one goes walking around a corner and finds powdered milk or other such things at 1000% of the price, this thievery has to come to an end,” Maduro announced. “I am approving a decree that will be the method for ending this.”
President Maduro also announced tougher sentences, of 10-14 years for those caught trafficking and hoarding goods. Speaking directly to the owners of the warehouses in the central state of Aragua, Maduro declared, "This is the criminal bourgeoisie. They are going to pay with jail, I swear it.”
According to Reuters, 1,266 people have been arrested due to contraband and trafficking in Venezuela “in recent months.” Increased jail sentences and a planned October 31st surge in national guards troops sent out to fight against contraband could lead to a rapid increase in this number.
“We have proposed that maximum severity against the crime of contraband be taken so that it is treated similarly to the matter of drugs. It's to say that the contraband smugglers that divert the country's basic goods will be facing 10 to 14 years in prison” stated Andrés Eloy Méndez, National Superintendent of Fair Prices.
While the Venezuelan government is under enormous internal pressure to intervene in the economy and address the food shortages, speculative scarcity, and distribution issues in the country, there is also pressure to address conditions of overcrowding in the countries' prisons. Harsher sentences may reduce the amount of trafficked goods but could contribute to an increasing prison population.
While the government blames currency fraud, hoarding, price speculation and contraband smuggling for problems of goods shortages and inflation, opponents argue that rigid currency exchange controls and “excessive” state regulation are the root cause.