As the US has quickly ratcheted up sanctions against
Venezuela to pressure
Nicolas Maduro, bankers say they are shying away from doing even legitimate business with the crisis-wracked oil producing country for fear of getting caught in the crossfire.
The sanctions target a growing list of individuals and companies linked to the Maduro regime — including state oil company
PDVSA, the lifeblood of the
Caribbean nation’s crumbling economy.
But because the penalties are complex and the cost of a violation is so high, some banks are beginning to avoid doing any business with Venezuela at all, said Daniel Gutierrez, head of the Florida International Bankers Association's anti-money laundering committee.
Banks must review each transaction and examine the sanctions one by one, consulting lawyers to verify exemptions and requirements, at the risk of being hit with a fine of more than $1million by the US Treasury Department if they get it wrong, Gutierrez told AFP.
That not only presents a challenge for banks and businesses but for families in the US, many in Florida, who send money to relatives left in Venezuela to help them weather the nation's widespread food shortages and
hyperinflation.
As a result, “there are many major banks in the US that have made the decision to decouple from Venezuela," said Gutierrez, who works with 60 domestic and international banks in Florida.
“How am I supposed to know, as your bank, if for example a wire transaction is for the purposes of exporting a diluent?" Gutierrez asked. “The banks find themselves in a situation where they have to do a cost/benefit analysis on their clients.”