Compliance officers in the shipping industry should be on alert following several new sanctions designated by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) against a network of Mexican individuals and companies said to be helping Venezuelan President Nicolas Maduro evade U.S. sanctions.
On June 18, OFAC announced it had blacklisted three individuals and eight foreign entities. It also identified two vessels as blocked property for their activities in, or associated with, a network attempting to evade U.S. sanctions on Venezuela’s oil sector. Among the individuals targeted include Joaquin Leal Jimenez (Leal), Olga Maria Zepeda Esparza (Zepeda), and her mother, Veronica Esparza Garcia (Esparza). OFAC also designated the two Mexico-based companies that Esparza and Zepeda co-own (Libre Abordo) and control (the Schlager Business Group).
Venezuela’s state-owned and state-controlled energy company PdVSA has long been at the center of numerous schemes designed to embezzle billions of dollars from PdVSA for the personal gain of corrupt Venezuelan officials and businessmen. According to OFAC, since at least 2019, the Maduro regime and PdVSA have cooperated with U.S.-designated Colombian businessman Alex Nain Saab Moran (Saab) and Leal to evade U.S. sanctions and assist in the sale of Venezuelan-origin crude oil.
One recent scheme to sell Venezuelan-origin crude oil was under the guise of an “oil-for-food” program that never resulted in food deliveries to Venezuela. Though Libre Abordo and Schlager Business Group claimed to have contracts with the Venezuelan government to deliver corn and water tanker trucks to Venezuela, OFAC said, they failed to deliver the corn and sent only half of the water it was contracted for and at “grossly inflated prices.”
U.S. Secretary of State Michael Pompeo said in a statement that this scheme “skimmed millions from funds that were claimed to have been for humanitarian aid, yet failed to deliver the promised food to the Venezuelan people” and that “Maduro’s corrupt regime is directly responsible for the political, economic, and humanitarian crisis in Venezuela.”
The following four entities owned or controlled by Leal or Zepeda have also been designated: Cosmo Resources Pte. Ltd., a Singapore-based entity incorporated in February 2020; Washington Trading Ltd. a U.K.-based entity incorporated in February 2020; and Alel Technologies and Luzy Technologies, both incorporated in the state of Delaware.
Additionally, OFAC designated two entities which loaded or otherwise held Venezuelan-origin crude from late November 2019 to May 2020 for operating in the Venezuelan oil sector. OFAC further identified two vessels owned by these entities as blocked property: Panamanian-flagged crude oil tanker Delos Voyager and Liberian-flagged crude oil tanker Euroforce.
“The illegitimate Maduro regime created a secret network to evade sanctions, which Treasury has now exposed,” said Deputy Secretary Justin Muzinich. “The United States will continue to relentlessly pursue sanctions evaders, who plunder Venezuela’s resources for personal gain at the expense of the Venezuelan people.”
Maritime companies delisted
Additionally, OFAC said it delisted two companies on June 2—Afranav Maritime Ltd. and Seacomber Ltd.— for operating in the oil sector of the Venezuelan economy. Also, on June 2, OFAC identified two vessels—the Athens Voyager and the Chios I—as blocked property.
“Following their designations, both companies have committed to enhanced risk-based sanctions compliance programs based on the model OFAC has recommended in its published guidance and pledged to cease involvement in the oil sector of the Venezuelan economy so long as the Maduro regime remains in power,” OFAC said.