US sanctions blamed as Venezuela laments drug order freeze

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An order of $ 12.7 million of essential drugs and medical supplies, placed by the development bank of Venezuela with the Pan American Health Organization, has been blocked for more than two months as an indirect result of US sanctions. The request, frozen by the Portuguese bank Novo Banco, relates to more than 30 million syringes; 6 million vaccines against measles, mumps and rubella; 5.5 million vaccines against diphtheria and tetanus; 2 million polio vaccines; and 1 million yellow fever vaccines. It comes as the country grapples with a punitive economic crisis and has battled notable increases in vaccine-preventable diseases in recent years – diphtheria and measles, specifically.

Faced with criticism of his radical sanctions against Venezuela, the US government often points to the broad humanitarian exemptions in place, which, he says, allows the free flow of food and medicine to those in need. But as the ongoing dispute over medical shipments illustrates, that’s not always the case.

According to documents shared with The Intercept, Lisbon-based Novo Banco refused for several weeks to approve a transfer from a Portuguese lender to the Pan American Health Organization, or PAHO, a public health agency affiliated with the World Health Organization.

Novo Banco did not respond to a request for comment. But critics in the European Parliament say the stalled transaction is proof of both the far-reaching reach and deleterious effects of US sanctions against Venezuela. Tightened under the Trump administration and left in place by President Joe Biden, these restrictions weigh heavily on banks and financial institutions, even those operating outside U.S. borders.

The delay of Novo Banco is part of a much larger dispute between the bank and the Venezuelan government. Starting in early 2019, after opposition lawmaker Juan Guaidó declared himself the country’s interim president and quickly gained recognition from the United States and the European Union, financial institutions across the country Europe have frozen assets owned or closely linked to the government of Nicolás Maduro. These entities included Venezuela’s state-owned oil company and its state-owned development bank, known as Bands.

The sum understand roughly $ 1.7 billion at Novo Banco, a bank created in 2014 during the last financial crisis in Portugal. A quarter of the bank’s property belongs to Portugal Resolution funds, a special state-backed fund to help stabilize banks. The other three quarters are possesses by US private equity firm Lone Star.

A nurse takes a break at the nursing station of the University Hospital, one of the most important in the training of doctors in the country, in Caracas, Venezuela, on June 3, 2021.

Photo: Pedro Mattey / AFP via Getty Images

Although the EU has not anymore recognized Guaidó as president of Venezuela since January, the deadlock dragged on at Novo Banco. According to a July ruling from a Lisbon judge, the Portuguese lender is explicitly authorized to approve Bands transactions, provided the transactions get the approval of a judge beforehand. This is precisely the process that Venezuela’s development bank intended to embark on this summer.

On July 22, Bandes sought approval from Novo Banco to send the order of approximately $ 12.7 million to PAHO. To reduce fears of a violation of US sanctions and maximize the chances of getting the green light from a judge, Bandes offered to make the transfer in Brazilian reals and deposit the money directly into a PAHO-based account. in Brasilia. It also included information about the drug and the supplies in question.

Two months later, however, Novo Banco has yet to give the green light. On September 15, the president of Bandes, Héctor Andrés Obregón Pérez, sent a follow-up letter to the CEO of Novo Banco, Antonio Ramalho, urging him to continue the transaction, noting that the payment is “urgent” and for “reasons” humanitarian “.

Now Novo Banco’s inaction sparks criticism outside Venezuela. A group of 24 members of the European Parliament plan to issue a letter on Thursday calling on the Portuguese lender to move forward with the Venezuelan drug order. The letter, shared ahead of its public release with The Intercept, asserts that “there are no legal or extra-legal obstacles that would prevent a Portuguese bank from making a transfer of Brazilian Real Bands’ equity directly to an account. Brazilian bank to pay for humanitarian supplies.

The group also deplores that “European banks continue to comply too much” with US sanctions against Venezuela despite efforts “to clarify that humanitarian aid is perfectly authorized and even desirable”.

It’s a similar review to that made by Progressive International, which earlier this year organized a conference highlighting the harmful effects of US sanctions on public health – and in particular, the global fight against Covid-19.

“The case of Novo Banco is clear: sanctions kill,” James Schneider, communications director of Progressive International, told The Intercept. “President Joe Biden and the G7 love to talk about the need for ‘solidarity’ in the face of a global pandemic. Yet their economic policies prevent entire countries from accessing basic medicines that save lives and protect the profits of their pharmaceutical companies before the lives of ordinary people who die from Covid-19 and other diseases. “

A spokesperson for the US State Department declined to comment.

For its part, the Treasury Department’s Office of Foreign Assets Control – or OFAC, the agency that oversees the application of sanctions – maintains that various restrictions on doing business in Venezuela do not prevent civilians from accessing the system. much-needed food and medicine. In August 2019, even after the Trump administration tightened sanctions as part of its so-called maximum pressure policy against Maduro, OFAC issued a advice stressing that “the flow of goods and humanitarian services to the Venezuelan people is not prohibited by US sanctions”.

Nevertheless, financial institutions sometimes go beyond what is legally required, hesitant to authorize certain transactions out of prudence or for fear of risking heavy penalties. As The Intercept reported earlier this year, for example, the Venezuelan government criticized U.S. sanctions for hampering its ability to access Covid-19 vaccines through COVAX, the global vaccine sharing initiative backed by the United States. ‘World Health Organization. (At the time, the State Department rejected the idea that he bore any responsibility.) In any case, Venezuela eventually received its first shipment via COVAX this month. It was the last country in South America to obtain it.

Alena Douhan, UN Special Rapporteur on Unilateral Coercive Measures and Human Rights, also drew attention to the issue. In February, she published a report on the effects of foreign sanctions on Venezuela, calling existing humanitarian exemptions “ineffective and ineffective” and arguing the “devastating effect” of sanctions is “multiplied by extra-territoriality and over-compliance”. Douhan also specifically distinguished Novo Banco: in July, she sent a letter to the bank alongside other UN officials in which they criticized the presence of “increasingly stringent and zero risk policies” and reminded the Portuguese lender that member states of the EU to comply with US sanctions.

As debates rage on who is to blame, it is clear that the economic and public health situation in Venezuela remains grim. More … than 5 million people have fled the country in recent years, according to the United Nations High Commissioner for Refugees. According to the United States’ own government YOU SAID agency, 7 million Venezuelans are in need of humanitarian assistance.

So far, the Biden administration has avoid calls to dramatically change the approach to the Trump era in Venezuela. In a joint statement Posted in June, alongside the EU and Canada, the US said it would consider easing sanctions against Venezuela if “significant progress” was made in talks between opposition figures and the government. This month, representatives of the Guaidó and Maduro camps held two rounds of negotiations in Mexico City under the mediation of Norway. As the regional elections in November approach, Maduro has applauded progress in the talks, while a declaration released Monday by the Norwegian Foreign Ministry, said that the “positions of the two sides have come closer”.



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