• Maibort Petit

Do Sanctions Work - Venezuela Sanctions

Updated: Sep 2

“We will not stand by while Venezuela collapses into dictatorship.”, said the Former Vice President Mike Pence.

Here was a dictatorship being accused of Violating Human Rights. In order to get Venezuela to stop denying its people their basic Freedom and Rights, The USA Government placed economic sanctions on Venezuela.


What do the sanctions do?


According to Larisa Epatko, writing for the PBS News,


The sanctions are meant to block banks from dealing with the government of Venezuela.


But do they really block banks from dealing with Venezuela?


maibort petit

by Maibort Petit

Is a Venezuelan writer, researcher and political scientist specializing in Transnational Organized Crime. Based in New York, she works for several Hispanic media outlets and as a consultant for several firms in New York and Washington D.C.


She is founder of the Freedom Voice Reports, a 501(c)(3) nonprofit investigative reporting site dedicated in the fight against violations of Human Rights.


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Meanwhile the Department of the Treasury of the United States thought that Nicolás Maduro was far from the financial system of that country because of the effect that the sanctions imposed by them caused in that government.


Eastern National Bank
Eastern National Bank

The dictatorship remained afloat thanks to the help that an institution of the US system itself supposedly provided:


The Eastern National Bank, a small entity in Miami that allegedly acted as a kind of "patron" bank of the Venezuelan regime.





You are about to read a complex plan of a bank right here in the USA, in Miami, Florida, being accused of helping a dictator stay in power, and circumvent USA sanctions. We left out much of the report as it gets into the court proceedings and fillings. If you are interested in this case, knowing more detail, contact us.


Department of Treasury

This situation was known through a note from El Nuevo Herald, while Venezuela Política obtained a court document of the lawsuit filed by the minority shareholders of Eastern National Bank N.A. before the United States District Court for the Southern District of Florida to which one percent of the owners of the aforementioned bank went to sue Gabina Rodríguez, Louis Ferreira, César Gómez Valero, Keith Parker, Carlos Rodríguez and Gustavo Macías, members of the bank's board of directors. In the United States District Court for the Southern District of Florida the case is in the hands of Judge Beth Bloom; the plaintiffs' lawyers are Diego Pérez Ara and Derek Eduardo León of the firm León Cosgrove LLC; the defense of Eastern National Bank is in charge of Sydney Brooke Alexander and Jose Angel Casal of the firm Holland & Knight.


Pres Nicolás Maduro of Venezuela
Pres Nicolás Maduro of Venezuela

On June 14, 2022, Judge Edwin G. Torres recommended that the court deny Eastern National Bank a motion filed by his lawyers to dismiss the lawsuit. The parties were given 14 days to turn in to submit a report and recommendations, as well as their objections to the magistrate's recommendation before the District Judge. This was the court document to which Venezuela Política had access.


The lawsuit alleges that Eastern National Bank, N.A.

"is a national banking association authorized to do business in the State of Florida. Its main offices are located in Miami-Dade County, Florida", meanwhile Mercorp, N.V., "is a company organized under the laws of Curacao. Mercorp owns more than 99% of the Bank's shares."


The lawsuit states that Corpofin C.A.

"is a company incorporated under the laws of Venezuela. Corpofin is the sole owner of Mercorp. In addition, since the 1990s, Corpofin has been controlled by the Venezuelan government by virtue of Corpofin's placement in a judicial administration related to a Corpofin debt to a Venezuelan government agency."


Corpofin is a commercial company that is intervened by the Venezuelan state, which we confirm through a judgment of the Supreme Court of Justice of February 22, 2006,

in which it is read that said entity "was intervened by Resolution No. 115/94 dated September 15, 1994, published in the Official Gazette No. 35,547 of that same date by the respondent because "(...) there was at the time similarity between the directors of this company and some members who made up the Board of Directors of BANCOR (similarity that had ceased before the Intervention of Corpofin (...) and because in addition this company owed for that time, without guarantee an estimated nine thousand seven hundred million bolivars, in promissory notes that at the time of its intervention were not expired". It is therefore under the control of the Venezuelan government, Another court ruling indicates that Corpofin C.A. was registered in the Mercantile Registry of the Judicial District of the State of Anzoátegui, on November 16, 1981, under No. 10, Volume A-13[3].


Eastern National Bank's minority shareholders, namely Bancor Group Inc. and Stitching Particulier Fonds Franeker, took legal action on January 23, 2021 — case 1:2021cv22311 — against members of the bank's board of directors, including Gabina Rodríguez, who chaired the institution between 2015 and 2021.


The Defendants

Judge Torres' recommendation states that in the lawsuit the plaintiffs warn that Gabina Rodríguez "is an agent of the Venezuelan government. In 2009, Gabina was appointed by the Venezuelan government as Corpofin's trustee. Its government-appointed control over Corpofin gives it full control over Mercorp, which in turn makes it the Bank's majority shareholder. From 2015 to 2021, Gabina also served as Chair of the Bank's Board of Directors. He is a resident of Caracas, Venezuela."


For his part, it is indicated that César Gómez Valero "served as a member of the Bank's board of directors from 2015 to 2021. He is also a resident of Caracas, Venezuela. And, based on a review of the record, he is the only defendant who has not yet been served on a proceeding in this lawsuit."


Keith Parker is reported to have "served on the Bank's board of directors since 2005. He is a resident of Miami-Dade County, Florida."


They add that Gustavo Macías "has been a member of the Bank's board of directors since 2016. He is a resident of Miami-Dade County."


They also indicate that Louis Ferreira "is the current president and CEO of the Bank, a position he has held since 2020. Ferreira has also been a member of the Bank's board of directors since 2019. He is a resident of Broward County, Florida."


It is also reported that Carlos Rodríguez "was the president and CEO of the Bank from 2018 to 2020. Carlos has also been a member of the Bank's board of directors since 2016. He is a resident of Miami-Dade County, Florida."


It is explained that Edward Holden has been a member of the Bank's board of directors since 2021 and is the only member of the Bank who is not named as a Defendant. He is described as the sole "independent" director.


The plaintiffs

Bancor Group Inc. is a company organized under the laws of the State of Florida that has among its directors Juan Santaella and Juan B. Santaella. Bancor owns 63 shares of the Bank.

Stitching Particulier Fonds Franeker is a company registered in Curaçao that counts among its principals Juan Santaella and Juan B. Santaella. Franeker owns 22 shares of the Bank.


Relationship with the Bank of Venezuela


Before opening the account, Eastern National Bank requested an advisory opinion from one of its regulators, the Office of the Comptroller of the United States Currency (OCC), regarding the opening of the account. The OCC responded that and warned about the risks involved and reminded the Eastern of its obligation to ensure that it is prepared to administer a "high risk" account without violating applicable laws. However, Eastern National Bank failed to meet its obligations with respect to some transactions related to the Banco de Venezuela account which led the OCC to launch an investigation into eastern National Bank's practices in 2018.


The Financial Problems of the Eastern


Judge Torres' recommendation indicates that in October 2018, the OCC, with the consent of the board of directors of Eastern National Bank, warned of the multiple deficiencies in the Bank's practices, including the adequate breach of anti-money laundering obligations and the Bank Secrecy Law with respect to the Bank of Venezuela account.


It is reported that after eastern National Bank's board of directors rejected a request for inspection of certain corporate records, Bancor Group Inc. and Stitching Particulier Fonds Franeker filed a lawsuit in the Southern District of Florida to force the board to comply with its own rules.


The lawsuit ended in a joint stipulation of dismissal without prejudice.

"However, from the issuance of the 2020 Consent Order to the present, the Bank's board of directors allegedly failed to take reasonable steps to comply with the OCC's mandates, which in turn increased the likelihood that the Bank will be subject to serious penalties, financial and otherwise, resulting from a regulatory enforcement action.


Bank is not complaint

In fact, more than a year has passed since the issuance of the 2020 Consent Order and the Bank has yet to add two independent directors to its board. This is despite the forced removal of Gabina Rodriguez and Gomez from the board, which resulted from the revocation of residency waivers by the OCC in March 2021."


The Eastern Stock Compensation Scheme

Following the OCC's actions, eastern National Bank's board of directors implemented a policy to increase its compensation. Specifically, in 2018, a capital incentive plan was established to provide for the issuance of restricted share units for them and others.


Thus, between December 2018 and July 2019, the MSW Plan caused about 16 percent of the shares of Eastern National Bank to be issued in favor of Gabina Rodríguez, Gómez, Macías, Parker and Carlos Rodríguez. Ferreira, who joined the Bank in October 2019, will also benefit from the MSW Plan.


lawsuit

Bancor Group Inc. and Stitching Particulier Fonds Franeker charged that the MSW Plan is a quid pro quo agreement between Gabina Rodríguez and the Bank's board of directors. That is, the capital distributed by the MSW Plan compensates the Eastern board of directors, allowing Gabina Rodríguez – and therefore the Venezuelan government – to continue exercising absolute control over the Bank.


Avoiding OFAC Sanctions

Eastern National Bank, because of OFAC's sanctions on the government of Venezuela, sought licenses to conduct certain transactions with Venezuelan entities and individuals that would otherwise be prohibited by presidential mandate.


Bancor Group Inc. and Stitching Particulier Fonds Franeker claim that in order to obtain these licenses from OFAC, Eastern National Bank made certain false statements to the Treasury Department agency regarding Gabina Rodríguez's relationship with the Venezuelan government. Specifically, they informed OFAC that Gabina Rodriguez makes all decisions regarding Corpofin (and therefore Mercorp) independently of the Venezuelan government, which is not true.


So how effective do you think our USA sanctions are?

Do you think they have been a deterrent to human rights violations?

Exactly how well have the sanctions in Cuba been?

Where have they been effective?


Does this Upset You ?

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