How dare Venezuela try to counter an “increasingly acute shortage of foreign exchange”. What, do they think gold is money or something?
ILLICIT OPERATIONS IN THE VENEZUELAN GOLD SECTOR
From early 2018, as the Government of Venezuela’s shortage of foreign exchange became increasingly acute, the Government started using gold resources to pay some contracts, to include CLAP food contracts, and Saab began working with Simon Alejandro Zerpa Delgado (Zerpa) to help the Government liquidate gold mined in Venezuela and convert it into foreign currency. Zerpa was designated on July 26, 2017 pursuant to E.O. 13692 for being a current or former official of the Government of Venezuela. Saab, in turn, worked with members of the Venezuelan government including El Aissami, the current Minister of Industries and National Production and former Executive Vice President, to create a structure for the Government of Venezuela to sell gold to Turkey. As a result of the Government of Venezuela’s corrupt operations in the gold sector, and to prevent Maduro and his corrupt associates from further exploiting Venezuela’s people and resources, the gold sector of the Venezuelan economy was identified as subject to sanctions by Secretary Mnuchin in November 2018.
Saab signed a contract with Banco de Desarrollo Económico y Social de Venezuela (BANDES) to acquire Venezuelan currency to purchase gold from local miners, and the Government of Venezuelan pressured miners to sell gold to Saab at an inflated official market rate, instead of on the black market. BANDES was designated on March 22, 2019 pursuant to E.O. 13850, as amended, for operating in the financial sector of the Venezuelan economy.
Some of the gold was sent to Caracas to be refined, then sold to the Central Bank of Venezuela (Banco Central de Venezuela or BCV), and subsequently exported out of Venezuela. The BCV was designated on April 17, 2019 pursuant to E.O. 13850, as amended, for operating in the financial sector of the Venezuelan economy. The gold was then flown to destinations such as the United Arab Emirates and Turkey. Turkish entities would purchase gold from the Government of Venezuela, depositing money in accounts in Turkey, which in turn would transfer funds to an account held by the BCV in Turkey. Saab’s company in Turkey, Mulberry, purchased goods in Turkey on behalf of Venezuelan clients, marking up prices before being sold back to Venezuela.