The United States has issued an advisory to alert financial institutions about widespread public corruption in Venezuela, and called on them to report suspicious activity in what appears to be an attempt to build evidence that could help levy sanctions against Venezuelan government officials.
On September 20, the US Treasury Department's Financial Crimes Enforcement Network (FinCEN) issued an advisory to alert financial institutions of "widespread public corruption in Venezuela and the methods Venezuelan senior political figures (and their associates and front persons) may use to move and hide corruption proceeds."
In the advisory, FinCEN outlined some "red flags" to help financial institutions identify and report suspicious activities that may indicate "Venezuelan corruption, including the abuse of Venezuelan government contracts."
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In the past, FinCEN has received various reports of suspicious transactions thought to be linked to public corruption in the Venezuelan government. However, the advisory stated that "normal business and other transactions involving Venezuelan nationals and businesses do not necessarily represent the same risk as transactions and relationships identified as being connected to the Venezuelan government, Venezuelan officials, and Venezuelan state-owned enterprises involved in public corruption."
InSight Crime Analysis
The US Treasury Department's latest warning concerning public corruption in Venezuela appears to be an attempt by the United States to build evidence against Venezuelan government officials in order to continue levying targeted sanctions against them, as opposed to the more controversial approach of levying broader sanctions that could potentially deepen suffering in the crisis-stricken South American nation.
Michael McCarthy, a research fellow at American University, told InSight Crime that the advisory sends a clear message that "reinforces the tough stance" taken by the administration of US President Donald Trump, "and closes windows for future financing" for the government of Venezuelan President Nicolás Maduro.
McCarthy added that this sort of advisory "falls within the realm of issues that still has a strong bipartisan consensus" and "raises the possibility" of more sanctions.
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Indeed, when the United States sanctioned several top officials in the Maduro administration earlier this year for "undermining democracy," the New York Times reported that the move "won support across the aisle in Washington." The US Treasury Department has also sanctioned Venezuelan Vice President Tareck El Aissami for his alleged involvement in drug trafficking, and more recently placed sanctions on President Maduro.
The advisory may also be an effort to gather evidence for criminal trials in the United States linked to corruption in Venezuela. (Some of these have already concluded with convictions.) For several years, US authorities have been investigating whether Venezuela's state-owned oil company Petróleos de Venezuela S.A. (PdVSA) provided billions of dollars in kickbacks for Venezuelan leaders. And in 2016, US officials were reportedly "closing in" on several Venezuelan government officials who were suspected of taking bribes in exchange for awarding government contracts at inflated prices.
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