Is the Movement of Money between Banks in Nicaragua to Avoid Sanctions

The two branches the Banco Corporativo (BanCorp) and its six service windows (5 in Managua and 1 in Leon, all located within the offices of the Cootel telecommunications company), are serving fewer customers than other banks in the system. However, that hasn’t prevented a 225% increase in the deposits in their vaults, representing a sum of nearly 5 billion 390 million Nicaraguan Cordoba’s (US $173.9 million) between January and November 2017, according to data from the Nicaraguan Superintendence of Banks and other Financial Institutions. And this still leaves out the data from December 2017, which isn’t available to the public.

No other bank showed such an accelerated rhythm of growth.  The change that can only be explained by noting that Alba of Nicaragua (Albanisa), a mixed Nicaraguan-Venezuelan enterprise), the principal investor in BanCorp, has been under pressure to remove the funds it was holding in three other banks of the national financial system. The latter banks abruptly closed the Albanisa accounts following the implementation of US sanctions against the mother company, Petroleos de Venezuela, S.A., the Venezuelan state oil company

In fact, the composition of the Board of Directors of BanCorp underwent a sudden change in the past three months, with the departure of the Albanisa Vice President, the president of the Caruna Savings and Loan, and of a well-known private businessman.  Data from the Bank Superintendence last September 30 lists the Board of BanCorp as presided over by Luis Orlando Barcenas Reyes, and made up of Francisco Quiñonez Murphy, Vice President, and members: José Francisco López (vice president de Albanisa); Jorge Martínez González (president of the Caruna savings and loan); Tirso Celedón Lacayo, Eduardo Holmann Chamorro,  and Gonzalo José Espinoza Gaitán, with Armando José Chible Sandoval as alternate director; Julieta del Socorro Jarquín González as Secretary, y Bonifacio Francisco Mendoza Izquierdo as the overseer.

By January 12, 2018, according to the bank’s website, three people had disappeared from the Board with no explanation whatsoever: Francisco “Chico” Lopez, Jorge Martinez, and Tirso Celedon.  The rest continued in their posts, with the exception of Chible Sandoval who became the Board Director instead of the stand-in.

The Albanisa Bank

In 2015, the Venezuelan government indicated to its local partners that all of the assets and liabilities related to the oil cooperation arrangement should be transferred from Caruna to Albanisa. The binational enterprise, of which Venezuela is the majority partner, then set out to move billions of Cordobas, part of which were transferred to accounts in BanCorp, their bank, which also assumed management of the funds in trust, among other financial operations. Nevertheless, Albanisa continued to hold the greater part of their deposits in three other private banks.

That’s how the story of this bank began.  On April 30, 2015, their data reflected total deposits of a little more than US $41,964, but one month later, on May 31^st, recorded deposits added up to nearly US $86,381,280, that is, a growth of 2,058%, presumably after beginning to receive the initial deposits from Caruna. They closed 2016 with US $138,587,724 in their vaults. October and November of 2017 were spectacular months with resources accumulated in the quantity of US $ 69.4 million and US $ 60.2 million respectively, to close November 2017 with US $312,567,240, and the data from December still unknown.

This sudden increase in resources coincided with the revelation from a source in banking, who confirmed to Confidencial that in November of last year, representatives from the upper management of three banks: Lafise, Banpro, and the BDF told “Chico” Lopez, the vice president of Albanisa, that they were closing the latter’s accounts to avoid being implicated in the U.S. sanctions against Petroleos de Venezuela, the Venezuelan company that owns 51% of the Albanisa stocks in a partnership with the Nicaraguan petroleum company.

On September 7, the U.S. embassy in Nicaragua and the American Chamber of Commerce of Nicaragua organized a video conference with an official from the Treasury Department in Washington to discuss the sanctions against Venezuela. The source of those sanctions is an executive decree signed by President Donald Trump on August 25. In this, among other decisions, is a prohibition of “new debt or equity transactions with the government of Venezuela and its corrupt state petroleum company Pdvsa”

Although in the meeting, to which the lawyers and upper level officials of the national banks were also invited, it wasn’t expressly stated that Albanisa would be sanctioned, it was suggested that the US citizens and entities “should closely review all their transactions with Albanisa to ensure compliance with the OFAC (Treasury Department) sanctions were being upheld.”

Translated by Habana Times