A Russian bank not known in the West and jointly owned by the states of Russia and Venezuela has emerged as a key player in Venezuelan President Nicolas Maduro’s efforts to work around U.S. sanctions that are cutting his country off from the global economy, Bloomberg reports.
Evrofinance Mosnarbank, which is not subject to sanctions itself, has been tapped by the Maduro government as an alternative to handle payments to its suppliers. What’s more, officials in Caracas are urging local banks and companies to channel international transactions through Evrofinance, according to people with direct knowledge of the matter.
Major U.S. and European-based financial institutions have cut off ties with Venezuelan businesses to avoid breaking U.S. sanctions imposed to punish the Maduro regime for human-rights abuses, political repression and graft.
But Evrofinance, with its unique capital structure and its origins as a joint venture created during the alliance between Vladimir Putin and the late Hugo Chavez, has been unmoved by such concerns and is increasingly getting involved in Venezuelan markets, Bloomberg wrote.
According to two sources who participated in the discussions, in at least two meetings in the past month central bank officials have told local private banks that they need to open Evrofinance accounts in order to take part in currency auctions. Economy Vice President Tareck El Aissami said last week that the auctions are now swapping bolivars for euros, yuan and other currencies instead of U.S. dollars.
In addition, state oil giant Petroleos de Venezuela SA’s contractors are also being told to open accounts with Evrofinance to receive payments abroad, according to two people with direct knowledge of the situation.
In recent years Evrofinance has grown “mainly due to shocks to the banking sector such as the rehabilitation of lenders and revoking of licenses from large players on the market,” according to an e-mailed response from the bank’s press office, without commenting specifically on whether Venezuela business has increased.