It appears that US-owned companies are helping Venezuela avoid US sanctions

Miami (AFP) – The Associated Press has learned that a company with an office in Houston and another owned by US citizens is helping Venezuela bypass US sanctions and quietly transport millions of petroleum products aboard an Iranian-made tanker.

Efforts to evade sanctions center around a crippled refinery and adjacent oil terminal on the Dutch Caribbean island of Curacao which until 2019 was a major shipping hub for Venezuela’s state-owned oil company, PDVSA.

On Sept. 28, the Togo-flagged tanker Colón offloaded 600,000 barrels of fuel oil at the Bolenbay terminal, operated by the state-owned Curacao Refining Corporation in partnership with fledgling Caribbean Petroleum Refinery, owned by two Venezuelan-American dual nationals. .

The state-owned company issued a press release celebrating Kowloon’s arrival as a “historic moment” – saying it was the first delivery of the revitalized terminal, which can store up to 7 million barrels of oil products.

Although the statement did not indicate the source of the fuel oil, for the past year the Iranian-made tanker has moved exclusively between Venezuelan ports. Ship-tracking data shows that, two days before arriving in Curacao, Colón loaded its giant black-and-red hull into Amoy Port, home to Venezuela’s largest refinery.

The oil shipment, which went unnoticed, appears to violate the spirit – if not the strict law – of US sanctions on Venezuela that have aimed in vain since 2019 to force President Nicolás Maduro from power.

With Maduro’s socialist government shunned as a financial pariah in the West, PDVSA has had to resort to ever more complex transactions to move oil produced from OPEC’s vast oil reserves – the largest in the world.

But so far, many of these transactions have involved deeply discounted payments in cryptocurrency by Russian oligarchs, shell companies in places like Hong Kong, and “phantom carriers” that turn off mandatory transponders to avoid detection by US authorities.

In contrast, Curaçao, whose foreign relations the Netherlands, a staunch US ally, holds firmly to US sanctions, even once confiscating unsold PDVSA stocks after its lease on the refinery expired in 2019 to pay US oil companies defaulted by Venezuela over them. the years.

Authorities in Curaçao may be betting on lax enforcement of the Biden administration, said Marshall Billingsley, a former senior Treasury official who helped craft the current sanctions policy. During former President Donald Trump’s administration, the US froze the assets of more than 140 Maduro insiders and threatened retaliation against even non-US companies caught dealing in Venezuelan crude oil.

In contrast, President Joe Biden has not imposed any additional sanctions on Venezuela since taking office and has promised to roll back existing restrictions if Maduro takes meaningful steps toward free and fair elections.

“They flout sanctions because they know that under this administration there are no consequences,” Billingsley said.

The US Treasury Department, which enforces the sanctions, did not respond to an email seeking comment.

Under US sanctions, Americans and US entities are prohibited from doing business with PDVSA, the state-owned oil company. This ban becomes more difficult to enforce, however, whenever a shipment of oil changes hands again and is mixed with other shipments, obscuring PDVSA’s role as the ultimate beneficiary of any international sale.

PDVSA’s internal documents show that the cargo transported by Colón was sold in September by PDVSA to United Petroleo Corp. Little is known about United, who were registered in Panama last year. But it has emerged as PDVSA’s second largest customer this year, with unpaid invoices for petroleum products sold for a shipment of more than $400 million, according to the documents, which a person familiar with the deal shared with the AP on the condition of anonymity.

PDVSA did not respond to an email seeking comment.

The cargo of Colon was unloaded at a storage facility owned by the state-owned Curaçao refinery in partnership with Caribbean Petroleum Refinery.

The Caribbean oil refinery was registered in Curaçao only in June, and has listed among its directors the Venezuelan-American businessman, Raul Herrera. A related holding company bears a similar name to its director Luis Justi, another dual national who was CEO of PDVSA when Maduro’s predecessor, Hugo Chavez, was elected in 1998.

When asked if the shipment originated in Venezuela, Patrick Newton, manager of the state-owned Curaçao refinery, said his company fully complies with US sanctions and that its contracts require its customers to abide by the same laws.

Meanwhile, Herrera said his company’s involvement in the deal was limited to providing storage for the owner of the shipment, which he identified as Knob Trading SA, a company registered in Panama that lists an office in Houston on its website.

“We do not operate Venezuelan products. We are not the owners or sellers of this shipment,” said Herrera, who is also president of a South Florida loan advisory firm.

Giusti did not respond to text messages and emails seeking comment. Knob Trading did not respond to repeated emails seeking comment, and a person answering the phone number listed on their website hung up when contacted by the AP.

It is not known where the crude oil went after it arrived in Curacao.

A month later, however, traders cautiously tried to unload the cargo, marketing it for re-export as a million barrels of “Bullenbaai fuel oil” – perhaps a mixture of different grades since Curacao does not produce oil. This is according to an Oct. 29 Certificate of Origin allegedly issued by the Caribbean Oil Refinery. A copy of the certificate was provided to the AP by an oil trader who had been offered the shipment by a broker working with Knopp. He spoke on condition of anonymity for fear of being identified. A deal that violates US sanctions.

The testimony was allegedly prepared by Frank Verhouts, who has been identified as the general manager of the Caribbean Petroleum Refinery. However, Herrera said that no person by that name works for the company and called the document, on which Knob’s name was cleared, a clear fraud.

“Unfortunately in the industry, there is a lot of fraud and misinformation,” he said.


Associated Press writer Dirk Dreyer in Willemstad, Curacao, contributed to this report.


Follow Goodman on Twitter: @APJoshGoodman

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