US Sanctions Shipping Companies, Torpedoes Venezuela Oil-for-Food Deal

Washington is cracking down on swap deals that provide Venezuela with food, fuel and other vital imports in exchange for crude oil.

By Ricardo Vaz
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Libre Abordo was to provide hundreds of water trucks in exchange for a reported 30 million barrels of Venezuelan crude. (Archive)
Libre Abordo was to provide hundreds of water trucks in exchange for a reported 30 million barrels of Venezuelan crude. (Archive)

Mérida, June 2, 2020 (venezuelanalysis.com) - The US Treasury Department sanctioned four shipping companies for transporting Venezuelan oil on Tuesday.

Afranav Maritime Ltd, Adamant Maritime Ltd and Sanibel Shiptrade Ltd, based in the Marshall Islands, and Greece-based Seacomber Ltd, own tankers which allegedly carried Venezuelan crude between February and April.

“The illegitimate Maduro regime has enlisted the help of maritime companies and their vessels to continue the exploitation of Venezuela’s natural resources for the regime’s profit,” Treasury Secretary Steven Mnuchin said in a statement.

Any US-based assets in which the four companies hold a larger than 50 percent stake are now blocked, while US entities are likewise forbidden from dealing with them.

The latest sanctions come on the heels of Mexican company Libre Abordo filing for bankruptcy, citing “pressure” from Washington.

Libre Abordo and Schlager Business Group, also based in Mexico, engaged in oil-for-food swap deals with the Venezuelan government in 2019. Libre Abordo was to provide hundreds of water trucks in exchange for a reported 30 million barrels of Venezuelan crude.

On Tuesday, Reuters reported that the Mexican government’s financial crime department was investigating Libre Abordo’s dealings with Venezuela, as well as 25 people and companies involved with Venezuela’s subsidized CLAP food program.

US agencies, including the State Department and the FBI, had opened investigations into Libre Abordo and Schlager in April and May, while also requesting Mexican assistance. Both companies had previously denied any violations of US sanctions. A host of entities involved in Venezuelan food imports for the CLAP program were sanctioned in July and September 2019.

Since August 2017, the Trump administration has imposed crippling economic sanctions against Venezuela, including an oil embargo and subsequently a blanket ban on dealings with Venezuelan state entities.

The unilateral measures have forced Caracas to increasingly turn to swap deals, particularly crude-for-fuel agreements. However, Washington has likewise taken aim at such deals, levying secondary sanctions against subsidiaries of Russian energy giant Rosneft, prompting the firm to halt operations and transfer its Venezuela assets to a Russian state-owned holding company.

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