Sunday, January 8, 2012


With presidential elections looming in October, Venezuela's President, Hugo Chavez Frias, has named General Henry Rangel de Jesus Silva as Defence Minister. Gen. Rangel was named, in 2008, as  Specially Designated Narcotics Trafficking Kingpin (SDNTK), by the US Treasury Department,  due to accusations that he was assisting the Revolutionary Armed Forces of Colombia, the FARC, transport drugs into, and through, Venezuela. The FARC is a Specially Designated Global Terrorist organisation.

A former head of the Venezuelan intelligence service, Rangel's appointment is not only a direct affront to the United States, it is a cause for major concern amongst country risk assessors.

(1)  Will purchase contracts with Venezuelan government agencies, or military entities, be considered sanctions violations by US regulators ? What if Rangel, or his adjutant*,  actually signs the contract ?

(2) Will he appoint other sanctioned Venezuelans, or entities, to posts in the Defence Ministry ? The authoritative  publication El Universal listed no less than 35 Venezuelan individuals, and companies, that are sanctioned by the US for allegedly facilitating narcotics trafficking.

(3) Will the United States subsequently designate Venezuela a State Supporter of Terrorism, and/or sanction government agencies, and what will that do to pending contracts, Letters of Credit, goods en route, and accounts receivable ?

Bottom line: I humbly suggest that you consider raising country risk on Venezuela, and that you ensure that your financial exposure there is extremely limited.

UPDATE: The United States Government has advised that it is expelling Venezuela's Consul General in Miami. A recording of her seeking codes of nuclear sites in the United States appeared in the Spanish-language media, and her membership in the Venezuelan intelligence service has been revealed. She has 72 hours to leave the country.

* A junior officer who assists a military commander with administrative tasks, generally on a full-time basis.  The Adjutant is more than an agent; he or she speaks for (and signs for) the senior officer in many administrative matters, rather than the commander.

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