Russian bank Rusfincorp to take on PDVSA accounts

Rusfincorp PDVSA

The Russian accounts opened by Venezuelan companies, including state-owned oil company PDVSA, will be transferred to the Russian Financial Corporation Bank (Rusfincorp). This institution was sanctioned by the U.S., Reuters said quoting a source familiar with the negotiations.

The decision was made by the Russian government, according to the source. This information confirms a previous report from the RIA news agency.

“This is not the Kremlin’s direct responsibility to open accounts and coordinate with business,” government spokesman Dmitry Peskov said. For its part, Rusfincorp indicated it has no information that Venezuelan firms like PDVSA intent to transfer its assets to this institution.

PDVSA and Rusfincorp targeted by sanctions

Last month, Russian creditor Gazprombank decided to freeze PDVSA’s accounts and stopped all transactions with the firm. The move was meant to reduce the risk of being targeted by U.S. sanctions.

Russian authorities made the decision to transfer the Venezuelan accounts after consulting with their counterparts and the South American firms, according to two sources familiar with the negotiations quoted by RIA.

The United States announced sanctions against Rusfincorp – owned by Russian arms exporter Rosoboroneksport – and some businessmen in April 2018; as part of more aggressive initiatives the American nation is taking against Moscow. The move was prompted by Russia’s alleged interference in the U.S. 2016 elections and other “malicious activity.”

Negotiations took place after the U.S. imposed new sanctions against Venezuela, which include freezing the State’s accounts in U.S. territory; as well as restrictions in the oil sector.

Sanctions continue to escalate

Almost all of Venezuela’s income comes from oil revenue, which is probably why Washington decided to implement its sanctions against PDVSA. This initiative seeks to cut the sources that finance the Maduro regime.

The U.S. government issued an authorization stating that Citgo Petroleum, a U.S. subsidiary of PDVSA, could continue its operations. Nonetheless, Maduro will not have access to the revenues of this activity. Instead, the money will be kept in accounts that the government will put at the disposal of Juan Guaidó, who the Trump Administration recognizes as the country’s legitimate leader after Maduro was reelected in a process that the opposition denounced for being fraudulent and was not recognized by the international community.

The sanctions could cost Maduro’s regime up to $11 billion, according to the U.S. government. They will also affect production, as Venezuela will not be able to purchase light crude from the United States to mix with the country’s heavy crude. This mixture allows moving the product through pipelines for dispatch.

With these heavy restrictions, the North American nation is aiming to drown Maduro.

The sanctions seek to “place pressure on Maduro and his allies, minimize their access to U.S. assets, and safeguarding the U.S. financial system,” said Sandra Oudkirk, Deputy Assistant Secretary of the Bureau of Natural Resources.

Looking for a way out

Venezuelan Vice President Delcy Rodriguez traveled to Russia this week for several meetings with Foreign Affairs Minister Sergey Lavrov.

Rodriguez announced the regime’s decision to transfer the European headquarters of the country’s state-owned oil company from Lisbon to Moscow. The decision, she said, stems from the fact that “Europe offers no guarantees of respect” of the regime’s assets.

Nevertheless, some experts anticipate that these agreements will not manage to avoid the restrictions imposed by Washington, given that the sanctions on PDVSA are directly related to receiving payments in U.S. dollars in the company’s accounts in that country. The request was made by Juan Guaidó.

Venezuela’s interim president made this petition in order to protect the country’s assets. He argued that PDVSA was not using this money to import assets for its operations. In reality, according to Guaidó, this money only serves to feed the system that keeps Maduro in power.

For more information, check Energía16

See also: PDVSA Citgo: Venezuela’s crown jewel enters the political dispute

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