The state oil company PDVSA plays a key role. And Asian companies lend themselves to make a big profit.
Last January, Venezuela’s state oil company already suffered the effects of a series of sanctions of economic sanctions that the United States began to apply a year ago. Many of the bank accounts PDVSA had abroad had been frozen or closed, hampering its ability to pay the suppliers it relied on to keep crude flowing into the South American nation.
So, as the bills piled up, the company decided to rely on a customer from Thailand Long-time Tipco Asphalt to mitigate the impact of the sanctions: In exchange for deep discounts on the price of oil, Tipco would pay PDVSA’s bills and deduct the amounts from what it owed the Venezuelan oil giant, according to records obtained by The Associated Press.
PDVSA quickly took advantage of the arrangement: in a single day – January 10, 2020 – the company sent Tipco executives 43 emails related to payment instructions, which provoked a slight reprimand from Jean-Pierre Pastor, Tipco’s representative in Venezuela, who complained of overwork.
“Tipco is a client of PDVSA, not the Venezuelan central bank,” Pastor wrote in bold and underlined in an email to the state oil company.
“Tipco did everything possible to help them in this difficult period,” he added. “Let’s hope they don’t forget it.”.
The email is just one of dozens of documents obtained by the AP as part of a months-long investigation. on how Venezuela tries to circumvent harsh sanctions Americans who have exacerbated an economic collapse rarely seen outside of war zones. At a time when the government of Nicolás Maduro is seen as an outcast in the West, the arrangement with Tipco has allowed PDVSA to quietly move hundreds of millions of dollars around the world that it might not have otherwise been able to do, they show. the registers.
The listed Thai company says its payments to third parties are perfectly legal and a standard feature of its oil purchases from Venezuela, which are not prohibited by US sanctions, that apply only to US companies. However, the AP has learned that the US judicial authorities and the Trump administration are examining these payments, which they consider a financial lifeline for Maduro.
The documents – invoices, contracts and wire transfer records – were handed over to the AP by a former PDVSA consultant outside of Venezuela on the condition of anonymity for fear of reprisals.
Lawyers and forensic accountants who reviewed the documents at the AP’s request said that Tipco could be sanctioned for defying US policy that seeks to deprive Maduro of oil revenues, a risk that Tipco herself acknowledged last month. Processing payments for a sanctioned company could also prompt a criminal fraud or money laundering investigation against Tipco in the United States if US companies or financial institutions were involved, as appears to be the case in some cases, said David P. Weber, who for years investigated corruption while working in the United States Department of the Treasury and the Securities Commission.
“It might have seemed like a good idea to make a profit as a financial intermediary,” said Weber, who is now a professor of forensic accounting at Salisbury University in Maryland. “But by participating in that risky activity, Tipco joined one of the most despicable governments in the world. ”
On September 11 – four days after the AP sent him detailed questions -, Tipco announced that it would stop buying crude from Venezuela under pressure from the Trump administration.
In a statement to the Thailand Stock Exchange, the company noted that it was first contacted by the U.S. Embassy in Thailand in December 2019, and a month later provided U.S. diplomats with a written explanation of its purchases. to Venezuela. Then, in August, she was contacted again by the State Department, that warned you that you could be subject to sanctions from the United States if she didn’t cancel her purchases by the end of November.
A US official said that the State Department, in its last contact, expressed concern about Tipco’s financial support to PDVSA through payments to third parties. The official asked not to be identified because the talks, part of an effort to proactively work with companies to eliminate the need for sanctions, were private.
The AP could find no record of Tipco ever informing investors of its contact with US authorities until it announced the abrupt end of oil purchases from Venezuela last month. Thai stock exchange regulations require companies to disclose information that could have a ‘significant impact’ in the price of its shares or affect investment decisions.
“To avoid the penalty, the company is taking steps to comply with such request, ” Tipco said in its statement, adding that its Malaysian refinery, which produces half of the company’s asphalt, would have to close temporarily until it is closed. sanctions against Venezuela will be lifted or alternative supplies of crude will be found. Company shares plummeted 40% after the announcement.
In an email to the AP, Tipco CEO Chaiwat Srivalwat did not directly mention the alleged financial support provided to PDVSA via third parties, except to say that any payment “strictly corresponded” to its purchases of oil from Venezuela. He also declined to disclose details of the company’s relationship with Pastor, who is the brother of Jacques Pastor, a former Tipco board member and executive director of the Asia-Pacific office of Colas, the French road builder and Tipco’s main shareholder. .