July 29, 2014

International Trade

Incoming cargo at Puerto Cabello:

• 146 chicken and beef containers from Brazil and Argentina for Corporación de Abastecimiento y Servicios Agrícolas (CASA)
• Over 45 tons of toilet paper and other personal care products from Procter & Gamble Int México for its subsidiary in Venezuela
• 21 tons of yellow corn from Desa Industries for Agrolucha, Alfonca Alimentos Fontana C.A. and Avícola La Guásima C.A.

More in Spanish: (Notitarde; http://www.notitarde.com/La-Costa/Casa-recibio-146-contenedores-con-pollo-carne-y-margarina-2205470/2014/07/28/341818)

Venezuela says MERCOSUR is open to relations with the Pacific Alliance

Following a proposal by Brazil's President Dilma Rousseff for speeding up a free trade agreement between MERCOSUR and the Pacific Alliance, Venezuela's Foreign Minister Elías Jaua said the MERCOSUR group is open to this idea. More in Spanish: (Infolatam, http://www.infolatam.com/2014/07/28/venezuela-dice-que-mercosur-esta-abierto-a-relacionarse-con-alianza-pacifico/?utm_source=Newsletter%20de%20)

Logistics & Transport

IATA seeks meeting with Maduro over money owed to airlines

A leading air transport industry body has called for a top-level meeting with the Venezuelan president to discuss ways to restore over U$D 4 billion of airlines' money that is trapped in the country due to its currency controls. President Nicolas Maduro's government requires airlines to sell tickets in the bolivar currency but has been slow to allow them to repatriate the earnings. The International Air Transport Association (IATA), which represents around 240 global airlines, said on Monday that while Venezuela had permitted repatriation of U$D 424 million shared among some airlines, U$D 4.1 billion of airline ticket sales remained trapped in the country. "The goal should be to clear the debts quickly in a way that is fair and acceptable to the airlines involved," IATA Director General Tony Tyler said in a statement, calling for Maduro to lead talks with IATA on behalf of the carriers that have money trapped in the country. IATA said that international capacity on routes to Venezuela is down 36% year-on-year, or down 49% from 2013 peaks. "Confidence in the market is falling sharply," Tyler said. "Venezuela risks becoming disconnected from the global economy." (Reuters, http://www.reuters.com/article/2014/07/28/venezuela-airlines-idUSL6N0Q33IL20140728)

Oil & Energy

CITGO’s net profits dropped 63% to U$D 170 million in the first quarter of this year, well below the U$D 461 million posted in the same period in 2013. This was due to lesser volumes of crude oil sold and the behavior of oil prices, according to financial information of PDVSA’s subsidiary in the United States. Net sales were down to U$D 1.2 billion. (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=40362&idc=4)

PDVSA weighs sale of its 50% stake at Chalmette refinery

Venezuelan state-run oil company Petróleos de Venezuela (PDVSA) has been pondering the sale of its refineries in the United States; thus, it has been holding talks with investment banks. The industry has approached Deutsche Bank in the search of buyers for its 50% stake in Chalmette refinery, located in Luisiana, and whose capacity amounts to 184,000 barrels per day (bpd), a PDVSA officer told Argus Media. (El Universal, http://www.eluniversal.com/economia/140728/pdvsa-weighs-sale-of-its-50-stake-at-chalmette-refinery)

Economy & Finance

Central Bank adds obstacles to the process of acquiring FOREX under SICAD II

Venezuela's Central Bank and Finance Ministry have established additional requirements for parties trying to acquire FOREX through the SICAD II system (VEB 50/U$D1). Individuals need to show they reside in Venezuela, present an original copy of the income certificate for payees dated no more than 30 consecutive days prior to the date of the transaction, a copy their last income tax filing and its payment, and an original and duplicate copy of their tax number. Companies need to provide copies of their last two income tax returns. Financial analysts say the new requirements will limit the number of people and companies that can go through the SICAD II system. One analyst says "if the company is new o the individual has just entered the labor market they cannot use this system." More in Spanish: (El Nacional; http://www.el-nacional.com/)

Maduro says Venezuela will strengthen its reserve position

Speaking to the 3rd Party Congress of the PSUV government party, President Nicolás Maduro said that financial operations are being carried out in order to increase international reserves, and consolidated several funds held in FOREX. The move has been announced at different times by Venezuelan officials over the past year. Maduro also claimed "Venezuela has sufficient dollars for the market this year and those to come." More in Spanish: The Government has been making similar announcement over the years. (El Universal, http://www.eluniversal.com/economia/140729/gobierno-afina-operaciones-para-fortalecer-las-reservas)

Exchange houses will sell foreign currency and traveler’s checks, via bank transfers, to individuals pending formal notice that the practice is approved by Venezuelan Central Bank (BCV). (Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=40358&idc=2)

Venezuela's comptroller: Dummy corporations are a huge racket

Venezuela's Comptroller General Adelina González has confirmed reports that dummy corporations may have bought huge amounts of FOREX through the Foreign Exchange Administration Commission (CADIVI). (El Universal, http://www.eluniversal.com/nacional-y-politica/140728/venezuelas-controller-front-corporations-are-a-huge-deal)

Politics

Aruba frees Venezuelan ex-general sought by U.S. over drugs, terrorism connection

A former Venezuelan military intelligence head detained on the Caribbean island of Aruba over U.S accusations of drug-trafficking was released and flew home on Sunday. Instead of being extradited to the United States, retired General Hugo Carvajal flew home after the Netherlands government ruled he had diplomatic immunity, his lawyer and Venezuelan officials said. Carvajal, who ran military intelligence from 2004 to 2008 during the presidency of the late Hugo Chavez, was arrested on Wednesday after flying to the semi-autonomous island that is part of the kingdom of the Netherlands. Jubilant Venezuelan officials at a congress of the ruling Socialist Party celebrated his release as a "victory" over their ideological foes in the United States. Carvajal was declared persona non grata in Aruba after the Netherlands admitted his diplomatic status on Sunday. Aruba’s Attorney General Peter Blanken said he cannot return to the island lest he will be arrested again. The State Department spokesperson added “We are concerned over credible reports we have received that indicate the Venezuelan Government threatened the governments of Aruba and the Netherlands to get this result...this is not the way in which legal enforcement affairs should be handled", and said US will continue efforts to bring Carvajal to justice. In less than 48 hours the Dutch government did a complete about face on the issue of general Carvajal's diplomatic immunity. The accused general now says that Aruba's Attorney General and judge are corrupt were bribed to detain him. He thanked his comrades and the people of Venezuela for their "solidarity". (Reuters, http://www.reuters.com/article/2014/07/28/us-venezuela-usa-arrest-idUSKBN0FW0QX20140728; Bloomberg, http://www.bloomberg.com/news/2014-07-27/chavez-s-ex-spy-chief-to-be-freed-after-aruba-detention.html; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2345420&CategoryId=10717, http://www.laht.com/article.asp?ArticleId=2345357&CategoryId=10717; Fox News, http://www.foxnews.com/world/2014/07/27/venezuela-says-former-general-arrested-in-aruba-on-us-drug-charges-to-be-freed/, http://www.foxnews.com/world/2014/07/28/officials-fume-as-former-venezuelan-general-slips-us-grasp-is-received-as-hero/; Veneconomy, http://www.veneconomy.com/site/index.asp?ids=44&idt=40350&idc=1; Fox News, http://www.foxnews.com/world/2014/07/28/aruba-releases-former-venezuela-ge neral-wanted-by-us-on-drug-charges/)

Venezuelan officers linked to Colombian cocaine traffickers

The head of Venezuelan military intelligence was on the payroll of a Colombian drug lord, invested his own money in drug shipments and personally coordinated the shipment of thousands of kilograms of cocaine, according to prosecutors in Miami and New York. And Venezuela’s liaison with Interpol took hundreds of thousands of dollars in bribes from another trafficker, the Miami prosecutors said. Three federal indictments unsealed last week open a window onto accusations of ties between Venezuelan military and law enforcement officers and Colombian narcotics traffickers, a connection that officials in Washington have long warned about and that has been roundly dismissed by the authorities here. Experts said the indictments help connect some of the dots between traffickers and the Cartel of the Suns, a loosely defined group of Venezuelan government and military officials suspected of having drug ties. Full report: (The New York Times)

Venezuela's ruling socialist party holds first post-Chavez convention amid internal dissent

Venezuela's socialist party is holding its first national convention since the death last year of President Hugo Chavez, with delegates hoping to quell infighting and discontent about party leadership. Behind the scenes pragmatists and hard-liners will be battling to hammer out a vision for the coming year. Hundreds of delegates will consider proposals from members all over the country, many of which concern the escalating economic crisis that has gripped the oil-rich country, provoking widespread shortages and soaring inflation. (Fox News, http://www.foxnews.com/world/2014/07/26/venezuela-ruling-socialist-party-holds-first-post-chavez-convention-amid/)

Maduro hints at a new constitutional assembly to "go deeper into socialism"

Following on calls by what he called "right wing elements" to call for constitutional assembly, President Nicolás Maduro told the PSUV 3rd party congress that "we could use a constitutional assembly to go deeper into socialism". More in Spanish: (El Universal, http://www.eluniversal.com/nacional-y-politica/140728/psuv-no-descarta-una-constituyente-para-mas-socialismo)

Venezuelan court remands in custody retired military official

Venezuela's Court-Martial has ordered the arrest of retired General José Vietri Vietri, former chief of the Presidential Escort Corps under the late President Hugo Chávez. Vietri has been charged with incitement to military rebellion, his lawyer, Alonso Medina Roa, stated on Monday. Vietri was arrested on July 25 at his residence in Caracas, and taken to the headquarters of the Military Counter-intelligence Directorate, said his attorney. The retired official attended a hearing on Monday at the Military Court, which remanded him in custody, Medina Roa told AP in a telephone interview. (El Universal, http://www.eluniversal.com/nacional-y-politica/140728/venezuelan-court-remands-in-custody-retired-military-official)

Maduro says the "little bird" spoke to him again and told him Chavez is happy

During a ceremony in Barinas state, marking the late president's 60th birthday, President Nicolás Maduro called Chavez a "great prophet" and said that the "little bird" again spoke to him and said Chavez was happy. En enormous cake was cut at the ceremony and a statue of Chavez - donated by Russia's ROSNEFT oil company - was unveiled. (Infolatam)

Arial, Times New Roman ... and now the 'Hugo Chavez' font

Supporters of Venezuela's late socialist leader Hugo Chavez have unveiled yet another novel way of keeping his memory alive - a font for typing in "El Comandante's" handwriting style. The distinctive 'ChavezPro' font was launched by a group of young "anti-imperialists" to coincide with nationwide commemorations of the 60th anniversary of his birth. Chavez's bold scrawl became famous to Venezuelans as he used to spend hours on national TV writing and drawing on boards and papers to explain policies, develop ideas and sign deals. His signature, in red for socialist, adorns T-shirts, baseball caps and the walls of buildings around the nation. (Reuters, http://www.reuters.com/article/2014/07/28/venezuela-chavez-idUSL2N0Q31LC20140728)

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.