Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Breaking News

Kohl's Soars in Premarket on Bid Reports; Coinbase, Halliburton Fall

Maduro Regime Is Moving Money Through Spain’s Central Bank

EconomySep 09, 2019 02:17PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. Maduro Regime Is Moving Money Through Spain’s Central Bank

(Bloomberg) -- As a growing number of banks around the world refuse to move money on President Nicolas Maduro’s behalf, Venezuela has found an ally in the Bank of Spain, according to two people with knowledge of the matter.

Venezuela’s central bank is increasingly relying on its Spanish counterpart to transfer and receive funds abroad at a time when U.S. sanctions have prompted many large banks and financial institutions to shy away from any actual or perceived dealings with the socialist regime.

Venezuelan central bank officials are telling contractors that going through the Bank of Spain is an option to make and receive payments outside of the country, while warning that it may still take at least a month to clear transactions due to increased scrutiny, one of the people said.

In an emailed statement, a Bank of Spain spokesman said the account kept by Venezuela is used to pay operating expenses related to the diplomatic relations between the two countries and by international organizations to send funds to Venezuela since they can’t use commercial banking channels. The balance of the account is “relatively small and has not registered significant variation in the past year,” according to the statement.

The Spanish government has deftly maintained relationships with both Maduro and the opposition’s Juan Guaido who is recognized by more than 50 countries as the rightful leader of the crisis-ravaged nation. While a top Guaido ally, Leopoldo Lopez, has been living at the official residence of the Spanish ambassador in Caracas for months, the Spanish government still maintains normal relations with Maduro and his allies.

The help from the Bank of Spain comes at a critical time for the embattled Maduro administration after state-run Ziraat Bank, Turkey’s largest bank by assets, stopped offering its services to move money. The U.S. financial system is off grounds and suppliers sometimes have to wait weeks to find a working account to make payments to the government. They often end up relying on far-flung financial institutions from Eastern Europe to Asia.

A press official for Venezuela’s central bank directed questions to the bank’s president, Calixto Ortega, who didn’t respond.

Widening Sanctions

Since U.S. President Donald Trump took office three years ago, he’s slapped sanctions on more than 100 Venezuelan individuals and entities, including the central bank, to increase pressure on Maduro in the hopes of regime change. The U.S. has increased its maneuverings against Maduro and support for Guaido this year, but the status quo remains.

As a consequence of the increased scrutiny -- and very limited access to dollars -- the central bank is conducting more transactions in euros, sometimes offering local clients access to euros in cash. That shift would make the Bank of Spain an attractive choice over other banks outside the eurozone.

The Bank of Spain’s willingness to move Venezuela’s money is legal within the correspondent banking system, in which countries, companies and consumers send trillions of dollars in payments around the world. In some instances, correspondent banks increase scrutiny when dealing with countries under financial penalties or flagged as money-laundering risks.

Sanctions imposed against Venezuela by the European Union, of which Spain is a part, include an embargo on arms sales as well as a travel ban and asset freeze for 18 officials deemed responsible for human-rights violations.

Within Europe, Spain receives by far the highest number of Venezuelan migrants fleeing the chaos in their home country. While Spain recognizes Guaido as the country’s rightful leader, it still hosts the Maduro-appointed ambassador in Madrid, as well as a representative picked by the opposition.

Even though Spain’s biggest oil company, Repsol (MC:REP), stopped shipping gasoline to Venezuela in March, the company still supplies low-sulfur diesel in exchange for Venezuelan crude oil.

In order to shield itself from the effects of sanctions, Venezuela’s government has been considering the possibility of switching to a Russian-operated international payments messaging system as an alternative to the SWIFT system that most financial institutions use.

(Updates to adds comments from the Bank of Spain in the fourth paragraph.)

Maduro Regime Is Moving Money Through Spain’s Central Bank

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Buzzy Jefferson
Buzzy Jefferson Sep 09, 2019 2:23PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Awe yes. Good old reliable Spain. Such a solid partner.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email