Sanctions busting: FBI probes Mexican, European firms for Venezuela oil trade

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The FBI is probing several Mexican and European companies allegedly involved in trading Venezuelan oil as it gathers information for a US Treasury Department inquiry into possible sanctions busting, according to four people familiar with the matter.

US Secretary of State Mike Pompeo and special envoy for Venezuela Elliott Abrams told reporters late last month the State and Treasury departments were investigating whether several firms were violating sanctions imposed on Venezuela’s state oil company PDVSA since January 2019.

The sanctions are part of a campaign by Washington to strangle the revenues of President Nicolas Maduro, which has failed to break his grip on power. US officials say privately that is a source of frustration for President Donald Trump, whose administration has tightened the implementation of
sanctions in recent months.

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Three of the people who provided information to the FBI - who asked for anonymity to discuss the matter - said the agency was investigating three Mexican companies: Libre Abordo, Schlager Business Group, and Grupo Jomadi Logistics & Cargo.

Reuters could find no record of Venezuelan oil purchases by those companies prior to sanctions.

The three people also said the FBI was gathering information on two Europe-based oil trading companies that do have a track record of dealing in Venezuelan oil or selling fuel to PDVSA: Elemento Ltd and Swissoil Trading SA.

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One of the sources familiar with the matter in Washington said any action against the Mexican and European companies could be postponed or cancelled if the firms had already halted trade with Venezuela.

The three others said the probe by the Treasury and the State departments could potentially lead to action in the coming weeks if they discovered a violation of sanctions.

A spokesman for the U.S. Department of Justice, which handles media enquiries for the FBI, declined to comment, as did a State Department spokesperson. The Treasury Department did not reply to a request for comment.

Emails and phone calls seeking comment from Swissoil went unanswered. Emails sent to an address on Jomadi’s website bounced back.

Law firm Holman, Fenwick & Willan (HFW), representing Elemento, said in a letter to Reuters after this story was published on May 13 that its client “is not aware of any investigations into it or its business” by the FBI, the US Treasury’s Office of Foreign Assets Control (OFAC) or any other body.

“Our client does not currently trade oil of Venezuela origin or sell fuel to PDVSA,” it said, adding that Elemento does not have any intention of doing so in the future. “Our client goes to great lengths to ensure that its business activities comply with applicable rules, regulations and sanctions, including
obtaining legal advice.”

Elemento and its lawyers did not respond to requests for comment prior to publication of the May 13 story.

In a lawsuit in January 2020 in a British court, Tansy Shiptrade Inc alleged Elemento had used its name without permission to load a cargo of about 2 million barrels of Venezuelan crude in December 2019, according to a judge’s ruling refusing Elemento’s request to be allowed to sell the oil.

The judgement said Elemento had admitted using Tansy’s name to receive the cargo but that Elemento had said it had permission to do so and had asserted that Swissoil had acted as its agent in the trade.

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