- Oct 25, 2013View Source
Venezuelan Authorities Crack Down on Currency Fraud
Oct 25th 2013, by Ewan Robertson - Correo del Orinoco International
Venezuelan authorities have intensified the battle against foreign currency fraud as part of strategies to defend the country’s foreign currency reserves against an “economic war” being waged against the government. (archive)
Venezuelan authorities have intensified the battle against foreign currency fraud as part of strategies to defend the country’s foreign currency reserves against an “economic war” being waged against the government.
The state maintains controls on the exchange of bolivars into foreign currency in order to prevent capital flight. Citizens and businesses receive dollar allocations from the state’s exchange commission Cadivi at the official rate of 6.3 Bsf = US $1 for a range of purposes such as foreign travel and goods imports.
Recently authorities have increased efforts to prevent the fraudulent claim and use of state-granted dollars, which contribute to pressures to devalue the bolivar and hurt the Venezuelan economy.
Last week six motorsport drivers were arrested for allegedly defrauding the Venezuelan state of US $60 million in fraudulent foreign currency requests.
The alleged scam was first denounced by Sport Minister Alejandra Benitez after discovering that certain “well known” motorsport drivers were involved in forging her signature as part of fraudulent dollar requests.
The scam included using made-up press reports with false details of race finishes and prizes won in order to be able to claim more foreign currency.
In an interview with local newspaper Panorama last Sunday, Justice Minister Miguel Rodriguez Torres confirmed that the six unnamed drivers would face trial for the accusations. “They did it with the prices of races, false trophies, inflated [dollar] requests…we checked over them, now we’ll check if they made any other requests,” he said.
The minister also reported that three other individuals had been arrested for another foreign currency scam. Those involved allegedly requested dollars to import medical equipment, however then only imported the outer covers of the equipment and kept the dollars for themselves.
Further, the president of Cadivi, Jose Khan, informed press this week that around 400 – 500 companies have been discovered with “irregularities” in their requests for dollar allocations, which are being investigated. According to statements by former Central Bank president Edmee Benacourt in May, around US $20 billion were granted last year to “companies on paper” that misused the currency grants.
As a result of these investigations Minister Rodriguez Torres has called on authorities to improve monitoring and control of the use of dollar grants in order to prevent misuse of the country’s foreign currency earnings.
The minister also argued that organized mafias are working to drain the economy of foreign currency as part of an “economic war” by political and economic actors opposed to the Bolivarian revolution.
In recent weeks the government has implemented a variety of measures to better protect the use of foreign currency in the economy.
“We will optimize the use of foreign currency because it belongs to the people. It’s not for acquiring things that aren’t a priority for our needs,” said Vice Minister for the Economic Area, Rafael Ramirez, while announcing new currency measures earlier this month.
New controls have been introduced in airports to avoid currency mafias taking part in a “currency tourism” scam where a single traveler uses several people’s credit cards to receive multiple dollar allocations in cash abroad, to then be sold Venezuela on the parallel, more lucrative, dollar market.
A parliamentary reform is also being discussed to the Law Against Illicit Currency Exchange, which would increase penalties for those taking part in currency fraud.
To satisfy foreign currency demand for legitimate personal and business interests the Venezuelan Central Bank is also pumping an extra $900 million into the economy through an auction system.
However authorities argue that the design and implementation of necessary measures to combat the “economic war” and currency fraud require that President Nicolas Maduro be granted special constitutional law-making powers, called the Enabling Law.
“There is a large section of the private sector that uses foreign currency not for investment, but rather to apply damaging elements [to the economy] such as hoarding, speculation and excessive usury that maintain the economy distorted,” said socialist lawmaker Julio Chavez to public channel VTV on Tuesday.
“Due to this the pertinence of the Enabling Law, to apply far more severe controls against the [abuse of] Cadivi dollar grants,” the pro-government legislator explained.
In anticipation of this, Vice President for the Economic Area Rafael Ramirez, Finance Minister Nelson Merentes, and the Venezuelan Central Bank are currently designing a new set of policies to combat fraudulent use of foreign currency grants.
Original article from Correo del Orinoco International. Additional editing and reporting by Venezuelanalysis.comSource URL (retrieved on 25/10/2013 - 3:03pm): http://venezuelanalysis.com/news/10120
Opposition Use Presidential Security Decree to Label Venezuelan Government “Dictatorial” Written by Tamara Pearson Wednesday, 23 October 2013 15:17
Earlier this month president Nicolas Maduro created a security body, the CESSPA, to coordinate information from intelligence organizations. Opposition spokespeople and private media have categorised the new body as “Castro-esque”, “dictatorial”, and “limiting free speech”.
The Strategic Center of Security and Homeland Protection (CESPPA) was created by presidential decree 458 on 7 October. The decree outlines all the functions of the CESPPA, which is ultimately responsible to the president of the republic, and which come under articles 226 and 236 of the constitution, as well as articles 15, 16, 58, and 91 of the Law of Public Administration.
The CESPPA “will request, organize, integrate and evaluate information of strategic interest ...associated with internal and external enemy activity, that comes from all state security and intelligence organizations, as well as other public and private entities, according to need,” states article 3 of the decree.
It will be the body which articulates policies of those institutions responsible for security, defense, intelligence, foreign affairs, and internal order, in order to “supply timely and quality information to the president” so that he or she can make “strategic decisions and neutralize potential threats to the national interest”.
Article 8 of the decree lists seven specific functions of the CESPPA, which are; direct the processing and analysis of information gathered from security bodies, establish the information requirements for security, control the fulfilling of orders that the national executive puts out in order to increase the level of knowledge about the operative situation, choose its staff, decide its internal functioning, form agreements with public or private institutions, and function 7, the rest that laws and regulations assign to it.
“The president...could declare any information, fact, or circumstance, as reserved, classified, or of limited circulation, where in fulfilling its functions, the [CESPPA] is aware of, or processing such information, in conformity with what is established in article 59 of the Organic Law of Administrative Processes and article 171 of the Organic Law of Public Administration,” says article 9.
In the motivations for the decree, it states that the government is responsible for coordinating state organizations, assigning the appropriate financing, and is responsible for the nation’s security.
Further, the national executive “reserves the right to collect, classify, and publish [information about] those affairs directly related to the planning and carrying out of operations for the security of the state”.
Maduro announced the creation of the CESPPA on 30 September while in Falcon state. At the time he said it would be run by Major General Gustavo Gonzalez.
“It will be an articulating and organizing institute, which will increase our capacity to know about, neutralize, and defeat ...any plan against the country,” Maduro said.
Opposition and private media distortions
The opposition and private media have used the news to claim that the national Venezuelan government is going to crack down on “free speech”.
A leader of the opposition’s Democratic Unity coalition (MUD), Delsa Solorzano, characterised the CESPPA as an “aberration” and compared it to the dictatorships of Marcos Perez Jimenez (Venezuela), Augosto Pinochet (Chile) and Adolf Hitler (Germany).
“They are seeking to repress freedom of speech and to control it, just like the dictator Perez Jimenez did, using national security to go after anyone who thought differently. What is being sought is to impose a single model of thought and convert any dissident into an anti-nationalist,” legislator Solorzano said last week in comments published by various media outlets.
Yesterday, the coordinator of the opposition party A New Time, Yssrael Camero, also said that the CESPPA “is for hounding the media, journalists, and all those who disagree with the state, using military force...it implies the militarization of state policy.”
Camero said that the government had created the CESPPA because it was in a “state of panic” and because it was facing a “political defeat in the [municipal] elections on 8 December.” Camero offered no evidence for such “panic”. Recent polls have put Maduro’s approval rating at 57%.
MUD executive secretary Ramon Aveledo said the CESPPA was a “repetition” of the Cuban model, “that is, war against undefined threats... the doctrine of national security is from the old military dictatorships, this is a big threat of censorship of communication”. Maduro has been one of the most outspoken heads of state to criticize the spying by US’s National Security Agency (NSA).
Conservative newspaper El Universal quoted lawyer and criminologist, Fermin Marmol, as saying that the CESPPA is “historically unprecedented” and aimed at “eliminating dissidence”.
The president of the Christian Democrat party (COPEI), Roberto Enriquez, said that the CESPPA is the “formalization of a totalitarian state in Venezuela”. He said that he went to the Supreme Court to request that the decree be nullified, claiming it “violates constitutional guarantees to privacy”.
English language media outlet, the Inter Press Service (IPS) reported on the CESPPA as “cold war logic”. The IPS quoted Rocio San Miguel, director of the organization Control Ciudadano as saying the CESPPA aims to “turn some citizens into vigilantes and informers...all bodies and people will be obliged to supply information that CESPPA requires on practically anything”.
The IPS did not cite any examples of such governmental actions over the last 14 years to sustain the quote, and did not mention that Rocio San Miguel is a weekly columnist for the right wing Venezuelan newspaper Tal Cual.
In July this year the minister for justice and internal affairs, Miguel Torres, alleged that San Miguel is an “operator with the CIA in Venezuela, I can prove it”.
IPS also quoted opposition front Alliance for Freedom of Expression as calling for the “immediate repeal of the decree...because it runs counter to constitutional guarantees of the right to information and the prohibition of censorship”. On its website, the Alliance describes its aim as “restoring the democratic system” in Venezuela.
IPS then quotes Carlos Correa, coordinator of Espacio Publico (Public Space), who criticized the idea of an “internal enemy” and assumed that “any Venezuelan critical of the government ...would fall under that label.”
According to lawyer Eva Golinger, referring to a 2008 document, Espacio Publico is one of the organizations which distributes US state department funds to certain Venezuelan journalists and media.
The CESPPA replaces the CESNA (Center of Situational Study of the Nation), created by late President Hugo Chavez in 2010 to fulfill a very similar purpose. The CESNA was for “compiling, processing and analyzing” information about “aspects of national interest.” At the time of its creation, the opposition made similar accusations. Human Rights Watch claimed that the CESNA gave Chavez powers to “control public debate.” There is little evidence that that happened.
The new CESPPA comes at a time when Maduro has accused the opposition of orchestrating an “economic war,” and after he expelled three US diplomats on 30 September for their “conspiracy with the opposition.”