Blacklisted Iranian Consortium Defies US to Open Caracas Superstore

Venezuelan and Iranian officials claim the commercial deal is part of a “win-win” relationship between the sanctioned countries.

By Paul Dobson
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The new Iranian-administered superstore has drawn criticism from Washington. (AFP)
The new Iranian-administered superstore has drawn criticism from Washington. (AFP)

Mérida, August 3, 2020 (venezuelanalysis.com) – The US government criticised the inauguration of an Iranian superstore in Caracas last Thursday.

The Megasis store stocks over 2000 imported Iranian goods, including dates and textiles, as well as 1000 locally produced goods such as mangos and coffee. It also sells a range of other products from tyres to vegetables.

The store is located in the capital’s northern Terrazas del Alba sector and is owned by Iran’s ETKA food retail and production consortium. ETKA owns over 700 similar superstores, principally in Iran but also in Iraq and Tajikistan. This is the company’s first Latin American outlet.

Since 2007, ETKA’s parent organisation, the Ministry of Defence’s armed forces logistics department (MODAFL), has been repeatedly sanctioned by the US and the European Union, with Washington accusing MODAFL of running front companies to channel funds for Iran’s Revolutionary Guards Corp (IRGC).

Speaking in a teleconference briefing on Thursday, Acting Assistant Secretary of State for Western Hemisphere Affairs Michael Kozak suggested that the Trump administration considers the Caracas retail outlet to be one of such companies, going on to explain that “any presence of the IRGC or the Islamic Republic in this hemisphere is not something we look very favorably on.”

Both Iranian and Venezuelan government officials have been quick to clarify that the superstore is a “purely commercial” endeavour, as well as highlighting the “win-win strategic relationship” between the two countries.

“We, the sanctioned countries, can complement each other,” explained Iran’s vice minister for industry, Issa Rezaei, at the Megasis opening. “For example, Venezuela has many products which one can’t find in Iran, and Venezuela has some needs which we can fulfil,” he went on to say.

For her part, Venezuela’s Vice President Delcy Rodriguez pointed out both countries sovereign right to trade and self-determination at the opening.

The 20,000 m2 Megasis building was expropriated by the government of former President Hugo Chavez from the French-Colombian private retail chain Exito in 2010, before being transformed into a branch of the state-run Abastos Bicentenario supermarket chain.

Abastos Bicentenario got into increasing financial troubles in recent years, with some outlets, including the Terrazas del Alba in 2016, being turned into so-called CLAP stores under public, private or mixed administration. In recent years, grassroots movements have increasingly criticised the government's policy of selling off or privatising state assets.

The transfer to the new Iranian owners is the latest step in increasingly close commercial and political ties between Caracas and Tehran in defiance of US sanctions and threats against the two nations.

As part of Washington’s sanctions program, a wide-reaching general embargo was imposed against Caracas in August 2019 which bans all dealings with Venezuelan public companies or any other entity which Washington considers to have “materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services” to the Venezuelan state.

More recently, the Trump Administration has looked to tighten its stranglehold by applying secondary sanctions against Russia’s oil giant Rosneft and a range of shipping firms, tankers, and food suppliers of different nationalities.

In June this year, the captains of five Iranian oil tankers were sanctioned after they defied US threats to deliver 1.53 million barrels of gasoline to the Caribbean country. The gasoline was part of fuel-for-gold trade deals between the two nations and looked to alleviate severe fuel shortages.

Likewise in June, Iran supplied Venezuela with additives, equipment and technicians to kick-start crude processing in its weathered refineries. An Iranian ship also docked at the Caribbean country on June 21 carrying a range of products to stock the Megasis superstore.

Similarly, in past years Iran has supplied materials and technicians to the government’s Great Housing Mission, as well as organised a low-cost vehicle assembly program and a large-scale tractor building plant in the country. For its part, Venezuela’s state-run oil corporation PDVSA was hit by US sanctions for shipping Iranian crude in 2011.

Edited by Ricardo Vaz from Mérida.

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