MARCH 12, 2019
U.S. Secretary of State Mike Pompeo speaks to the media at the Department of Foreign Affairs in Pasay City, Metro Manila, Philippines, March 1, 2019. REUTERS/Eloisa Lopez
WASHINGTON/MOSOW – U.S. Secretary of State Mike Pompeo on Monday blamed Russia and Cuba for causing Venezuela’s political crisis by supporting President Nicolas Maduro and said he had urged India not to help Maduro’s government by buying Venezuelan oil.
His comments came after the U.S. Treasury Department imposed sanctions on Russian bank Evrofinance Mosnarbank for helping Venezuelan state oil firm PDVSA evade U.S. financial restrictions.
“This story is not complete without acknowledging the central role Cuba and Russia have played and continue to play in undermining the democratic dreams of the Venezuelan people and their welfare,” Pompeo told reporters.
“Moscow, like Havana, continues to provide political cover to the Maduro regime, while pressuring countries to disregard the democratic legitimacy of the interim president Guaido,” he added.
President Donald Trump’s administration has taken steps to ratchet up pressure on Maduro and bolster Venezuelan opposition leader Juan Guaido, recognized by the United States and more than 50 other countries as interim president.
However, Maduro, who has accused Guaido of a U.S.-directed coup attempt, retains the backing of Russia and China as well as control of state institutions including the military.
Pompeo met with India’s Foreign Secretary Vijay Gokhale on Monday and they discussed India’s purchases of oil from Maduro’s government.
“We are asking the same thing of India as we are of every country: do not be the economic lifeline for the Maduro regime,” Pompeo said.
“I am very confident in the same way that India has been incredibly supportive of our efforts on Iran, I am confident that they too understand the real threat to the Venezuelan people,” he added.
The Indian market is crucial for Venezuela’s economy. It has historically been the second-largest cash-paying customer for the OPEC country’s crude after the U.S., which through sanctions against Maduro has handed control of much of the revenue to Guaido.
RUSSIA’S ROSNEFT ROLE
Pompeo said Russian oil giant Rosneft was also defying U.S. sanctions by buying oil from PDVSA, which was sanctioned in January.
“Russia’s state-owned company, Rosneft, continues to purchase crude oil cargoes from PDVSA, Venezuela’s state-owned oil company, in defiance of U.S. sanctions. And, Rosneft’s CEO, Igor Sechin, continues to throw a lifeline to the regime,” he said.
Rosneft, which is involved in upstream projects in Venezuela and is receiving oil from PDVSA under pre-payment deals from past years, called Pompeo’s statements “groundless accusations”.
“Rosneft is not involved in the politics and is conducting purely commercial activities,” it said on Tuesday.
“Rosneft activities in Venezuela… and oil supplies are conducted according to the international laws and existing… contracts.”
FILE PHOTO: U.S. Treasury Secretary Steven Mnuchin and White House National Security Adviser John Bolton announce economic sanctions against Venezuela and the Venezuelan state owned oil company Petroleos de Venezuela (PdVSA) during a press briefing at the White House in Washington, U.S., January 28, 2019. REUTERS/Jim Young/File Photo
Rosneft said any contracts were secured before the latest U.S. sanctions were imposed in January and it might seek legal action to defend itself if necessary.
The U.S. sanctions, aimed at forcing out Maduro, bar U.S. oil dollars from flowing to Venezuela.
However, the sanctions were later clarified, allowing U.S. persons to purchase and engage in swaps and non-cash deals for petroleum and petroleum products with PDVSA until April 28 in a move aimed at easing flows and averting a fuel crisis.
According to lawyers and traders, Rosneft can continue its oil and oil product operations with PDVSA at least until April 28.
RUSSIA-VENEZUELA BANKING JV
Washington has called on foreign banks to ensure that Maduro and Venezuelan government officials are not hiding financial assets abroad.
The U.S. Treasury said that all U.S. assets of Evrofinance, described as jointly-owned by Russian and Venezuelan state-owned companies, would be frozen and U.S. citizens prohibited from doing business with it.
“Bankers: Do not help Maduro and his accomplices steal the assets of the Venezuelan people,” U.S. national security adviser John Bolton wrote on Twitter on Monday. “The United States is watching. The world is watching. The Venezuelan people are watching.”
Evrofinance was set up in 2011 with Venezuela’s National Development Fund, commonly known as FONDEN, taking a 49 percent stake in the bank, the Treasury Department said.
Russia’s Gazprombank and Russian state bank VTB Bank each took a 25 percent interest in Evrofinance, which was founded as a bi-national bank to fund joint Russia-Venezuela oil and infrastructure projects, the department said.
VTB was considering selling its stake in Evrofinance, an executive with the Russian bank said last year, yet no firm deal was reached.
Evrofinance was the primary international bank that helped finance a Venezuelan crypto-currency, the petro, which launched last year in an attempt to “circumvent” U.S. sanctions, the Treasury Department said.
Evrofinance said on its website late on Monday that it was operating in a “stable manner” and will “fulfill all of its obligations towards clients and partners”.
Gazprombank, which is Russia’s third biggest lender by assets and includes among its shareholders Russian state gas company Gazprom, said the U.S. Treasury decision would not affect it.
“Gazprombank has a minority stake in Evrofinance Mosnarbank,” Gazprombank said in a statement. “Gazprombank does not carry out operations on the accounts of companies that are sanctioned by the U.S. over Venezuela.”
Famil Sadygov, deputy chief executive with Gazprombank, told Reuters on Tuesday that his bank had planned to sell its stake in Evrofinance, the same as VTB did, but no deal was reached.
“Now the situation is different, we will see what can be done. The time is needed,” Sadygov said.