U.S. sanctions Mexican firms, individuals over links to Venezuela

WASHINGTON (Reuters) – The United States on Thursday blacklisted Mexican company Libre Abordo and a related firm, accusing them of helping Caracas evade U.S. sanctions in the first formal action taken by the Treasury Department against Mexican companies involved in trading Venezuelan oil.

The Treasury Department said in a statement it imposed sanctions on three individuals, eight foreign entities and two vessels for activities related to a network attempting to skirt U.S. sanctions on Venezuela aimed at pressuring leftist president Nicolas Maduro.

Among those blacklisted was Mexico-based Libre Abordo and related Schlager Business Group, as well as their co-owners, Mexican national Olga Maria Zepeda Esparza and her mother, Veronica Esparza Garcia.

The Treasury also targeted Mexican Joaquin Leal Jimenez, accusing him of having worked with Alex Saab, recently arrested in Cape Verde, Libre Abordo and Schlager Business Group for brokering the resale of millions of barrels of Venezuelan crude.

Libre Abordo and Schlager Business Group began receiving Venezuelan crude for resale in Asian markets late last year after signing two contracts with Venezuelan President Nicolas Maduro’s government in mid-2019.

The agreement was framed as an oil-for-food pact exempted from U.S. sanctions as the Mexican companies intended to supply Venezuela with 210,000 tons of corn as part of the agreement.

Since the oil shipments began, Libre Abordo and Schlager received some 30 million barrels of Venezuelan oil, according to PDVSA’s export documents. Even though the oil was exchanged for about 500 water trucks, food was never supplied, as very low prices of crude affected the delivery schedule originally agreed, according to the companies.

“The illegitimate Maduro regime created a secret network to evade sanctions, which Treasury has now exposed,” Treasury Deputy Secretary Justin Muzinich said in the statement.

“The United States will continue to relentlessly pursue sanctions evaders,” he added.

Reuters reported last month that the FBI was probing several Mexican and European companies allegedly involved in trading Venezuelan oil, gathering information for a Treasury inquiry into possible sanctions busting, according to people familiar with the matter.

The Treasury on Thursday also delisted four maritime entities.

The United States in January 2019 recognized Venezuelan opposition leader Juan Guaido as the OPEC nation’s legitimate interim president and has ratcheted up sanctions and diplomatic pressure in the aftermath of Maduro’s 2018 re-election that was widely described as fraudulent.

Maduro remains in power, backed by Venezuela’s military as well as Russia, China and Cuba. His clinging to power has been a source of frustration for Trump, U.S. officials have said privately.

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