Latin America Advisor

Financial Services Advisor

A Daily Publication of The Dialogue

How Are Sanctions Affecting Venezuela Financial Services?

U.S. Treasury Secretary Steven T. Mnuchin on March 11 ordered the seizure of all U.S. assets of Evrofinance Mosnarbank, a Moscow-based bank, over its financial transactions with Venezuela. // File Photo: IMF Staff Photograph/Stephen Jaffe.

Recent rounds of U.S. sanctions on Venezuela have posed new compliance risks for banks and international financial institutions as they seek to understand how to comply with fast-evolving requirements, The Wall Street Journal reported last month. What do banks and financial companies need to know about the Venezuela sanctions? What sorts of penalties and risks are banks facing, and how will the consequences of risk aversion affect commerce and business relationships more broadly? Should companies in the financial services sector prepare for a long-term scenario of continued sanctions and compliance concerns related to Venezuela?

Jaime Martínez Estévez, partner at Rodner, Martínez & Asociados in Caracas: “Since the 2009 Rosemont Finance Corporation case, foreign banks’ anti-money laundering departments carefully monitor transactions related to Venezuela. Later, abuses of the Venezuelan exchange control made them further sensitive to transfers originating in Venezuela. There was a rise in the levels of alertness of these departments with the more general awareness of major and widespread corruption. Alertness has increased further since 2017 with U.S. sanctions and the growing list of the U.S. government’s specially designated nationals. Regulators’ scrutiny has also intensified over the years, as has the frequency and size of their fines. International banks have been exiting the Venezuelan market over the last 10 years and at an accelerated rate over the last three years. In line with the strategy of escalating the sanctions to induce change, the sanctions’ scope has been expanded from individuals to government entities to private enterprises, and from financial transactions to commercial transactions. Because the sanctions have not succeeded yet, it is foreseeable that…”

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About the Financial Services Advisor

Covering Latin America’s banking and insurance sectors, remittances trends and data, micro lending issues, new technologies in the industry, anti-money laundering regulations, and much more, the Inter-American Dialogue’s biweekly Financial Services Advisor, a sister publication of the Latin America Advisor, gives readers fresh insight and diverse viewpoints from financial sector leaders. To subscribe or for more information, contact Erik Brand, publisher of the Advisor, at ebrand@thedialogue.org.


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Erik Brand

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Gene Kuleta

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Anastasia Chacón González

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