The United States on Thursday blacklisted Mexican company Libre Abordo and a related firm in the first formal action taken by the Treasury Department against Mexican companies involved in trading Venezuelan oil.
Three individuals, eight foreign entities and two vessels have been hit with US sanctions “for their activities in or associated with a network attempting to evade United States sanctions on Venezuela’s oil sector”, according to a statement on the US Treasury’s website.
The Treasury said the network helped facilitate the resale of more than 30 million barrels of Venezuelan-origin crude.
Among those blacklisted were Mexico-based Libre Abordo and related Schlager Business Group, as well as their co-owners, Mexican national Olga Maria Zepeda Esparza and her mother, Veronica Esparza Garcia.
The Treasury also targeted Mexican Joaquin Leal Jimenez, accusing him of having worked with Alex Saab, recently arrested in Cape Verde, Libre Abordo and Schlager Business Group for brokering the resale of millions of barrels of Venezuelan crude.
Libre Abordo and Schlager Business Group began receiving Venezuelan crude for resale in Asian markets late last year after signing two contracts with Venezuelan President Nicolas Maduro’s government in mid-2019.
The agreement was framed as an oil-for-food pact exempted from US sanctions as the Mexican companies intended to supply Venezuela with 210,000 tonnes of corn as part of the agreement.
Since the oil shipments began, Libre Abordo and Schlager received some 30 million barrels of Venezuelan oil, according to PDVSA’s export documents. Even though the oil was exchanged for about 500 water trucks, food was never supplied, as very low prices of crude affected the delivery schedule originally agreed, according to the companies.
“The illegitimate Maduro regime created a secret network to evade sanctions, which Treasury has now exposed,” Treasury Deputy Secretary Justin Muzinich said in the statement.
“The United States will continue to relentlessly pursue sanctions evaders,” he added.
Reuters News Agency reported last month that the FBI was probing several Mexican and European companies allegedly involved in trading Venezuelan oil, gathering information for a Treasury inquiry into possible sanctions-busting, according to people familiar with the matter.
The Treasury on Thursday also delisted four maritime entities.
The US in January 2019 recognised Venezuelan opposition leader Juan Guaido the country’s legitimate interim president and has ratcheted up sanctions and diplomatic pressure in the aftermath of Maduro’s 2018 re-election that was widely described as fraudulent.
Maduro remains in power, backed by Venezuela’s military, as well as Russia, China and Cuba. His clinging to power has been a source of frustration for Trump, US officials have said privately.