US anti-Maduro actions turn screws on Caribbean govs, banks

The US is ratcheting up efforts to isolate Nicolás Maduro's regime in Venezuela.

Recent actions include a crackdown on Puerto Rico’s offshore banks, the reinstatement of a controversial sanction on Cuba and planned military exercises in the Dominican Republic and Guyana.

Last week, a report from Reuters detailed that a number of offshore banks in Puerto Rico, including several owned by Venezuelan nationals, had been targeted by the US Federal Reserve Bank of New York in an investigation of possibly illegal ties to the country under strengthened sanctions.

Puerto Rican offshore banks have a competitive edge over offshore banks in the rest of the Caribbean as they do not require third-party correspondent banks to access the US financial system.

Bank scrutiny building

The action in Puerto Rico follows a February raid of the BSJI bank in February to identify funds potentially associated with the Maduro government, as well as the intensification of US sanctions, which Florida International Banking Association (FIBA) president David Schwarz said has the region’s financial institutions on edge.

Schwartz, speaking to BNamericas, stressed that restrictions on doing business with any firm or individual tied to a growing list of entities, including Venezuela’s state-run oil giant PDVSA has added to the complexity of compliance.

“It’s given pause to the banks when executing a transaction in Venezuela, whereas before you could just put the names in your monitoring the system and your filters, and if you get a hit, you take a look and analyze the transaction, but now when it comes to unnamed related parties, how do you account for that?” said Schwartz.

“Basically, it means you have to look at every single transaction that comes through,” he said. “Failure is not an option.”

Also last week, the US reinstated Title III of the Helms-Burton Act, which allows US citizens to file lawsuits on claims to properties seized in the past by the Cuban government, a move viewed as an effort of by the administration of President Donald Trump to cater to Cuban-American voters in southern Florida, but also as an effort to alienate one of Maduro’s closest allies.

The US State Department has said that Trump’s decision could unleash hundreds of thousands of legal claims worth tens of billions of dollars, drawing quick criticism from Canadian and European allies, whose corporations have substantial investments in Cuba, as reported in regional outlet Caribbean News Now.

Military exercises

The US Southern Command has furthermore announced that hundreds of US military service members, representing national guard, active and reserve forces, will be in Guyana and the Dominican Republic for the division’s New Horizons and Beyond the Horizon humanitarian civic assistance exercises from May to August.

Venezuelan daily El Universal reported Sunday that although several sectors of Venezuela have requested a foreign intervention for humanitarian reasons, there is no information linking the military exercises to that request.

The outlet also reported that Venezuela's self-proclaimed interim president Juan Guaidó has called for a new march on May 1 and for strengthening the ties with the Venezuelan military, whose leaders still back Maduro.

Pictured: Guaidó greets supporters before a rally in Plaza Bolivar on April 19. Credit: DPA/AFP.