Peña Nieto, Do Not Back Out

The accomplished election of the National Constituent Assembly has flourishing businesses between Mexico and Venezuela in suspense. The country of North America has considered adhering to the trade sanctions announced by Washington, now that the chavista regime will cease the Parliament elected in 2015 and will initiate a raid against the political opposition. If the decision materializes, it will be a blow to the flourishing trade exchange between the two countries, which has allowed stocking the Local Supply and Production Committees, President Nicolás Maduro’s emergency plan to face shortages and the discontent of the population with Mexican supplies. It is a silent business, marked by opacity, from which entrepreneurs linked to the Venezuelan regime, as Samark López and Alex Saab, have benefited.
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Paradoxes
weave a shadow between Mexico and Venezuela. Both countries currently maintain
what could be the worst diplomatic relationship in their common history, but at
the same time they have reinforced their trade links as never before. The
Ministry of Economy endorses that. Nicolás Maduro’s regime has become the main
buyer in several food categories even amidst the tension caused by Enrique Peña
Nieto's position on the Venezuelan crisis.
Importers Benefit
Chavismo has always known how to separate political
affairs from business. This is evidenced by the shipment that arrived at the
port of La Guaira from Veracruz, in the Mexican Atlantic, days before July 24,
when Maduro accused his counterpart of creating an alliance with the United
States of America and Colombia to intervene in the country. The CNP Paita ship
berthed on the southern margin of the Caribbean with 511 food containers for the
Local Supply and Production Committees (CLAPs). It is a trip that that ship,
along with the Viking Merlin, both of shipping company Hapag Lloyd, have
repeated seven times since the beginning of the year with shipments of 500 to
600 containers shipped by a Mexican packing company for Venezuelan public
companies.
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Each
container brought around 1,000 to 1,300 boxes for CLAPs, containing eleven
products: powdered milk, lentils, corn flour, rice, beans, oil, sugar, pasta
(short and long), mayonnaise, tomato sauce, and canned tuna. The phrase "Made in
Mexico" is repeated in the package of these products. One of the powdered milk
brands even specifies that it is exclusively packed for the "Local Supply and
Production Committee," proof that Maduro’s plan is good business for Mexican
companies.
With the
exception of the sale of items like white corn, vegetable oil and lentils,
Mexican exports to Venezuela were virtually zero. However, Maduro’s regime
suddenly became one of the main buyers of essential goods and found in Mexico
the lifeline to bring subsidized food to a population that is dissatisfied by
the general shortage and suffocated by inflation on the way to four digits at
2017 close.
Confirmed Trend
The trend,
which began in the second half of 2016 in products like mayonnaise, powdered
milk and sugar, was completed in the first four months of this year, according
to official data from Mexico. The regime has even come to dethrone the United
States of America - the neighbor and traditional trade partner of Mexicans - in
the purchase of food to become the number one in the world in seven of the
eleven products that fill the CLAPs (rice, white corn, lentils, black beans,
canned tuna, tomato sauce, and pasta) and second customer in three other items
(vegetable oil, powdered milk, and sugar).
From
January to April 2017 alone, Mexico exported to Venezuela 209,124 tons of food
for the government of Maduro - so hostile and apparently distanced from the
government of Enrique Peña Nieto - to consolidate its subsidized food program.
During this period, Venezuelan purchases of vegetable oil, rice, canned tuna,
sugar, black beans, lentils, white corn, mayonnaise, pasta, and tomato sauce,
all included in the CLAPs, totaled 127 million dollars. As if that were not
enough, last May alone, 205 thousand tons were shipped, almost the total of the
first four months, for a value close to 50 million
dollars.
That
exchange seems like a fraction of a larger business. Although the Venezuelan
authorities do not disclose the investment in dollars for CLAPs, the documents
obtained for this report allows us to establish that nearly 500 million dollars
from Venezuela ended up in Mexico. It is not a minor figure, if considering that
it could settle at least half of the debt that the companies clustered in the
Venezuelan Chamber of Food Industry (Cavidea) have with their suppliers abroad
due to imports that were completed, but that the Government never paid and that
has caused a paralysis in the national production.
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The cargo
was received in Venezuela by public companies like the Trader of Goods and
Services of the State of Táchira (Cobiserta), attached to the Government of that
state, in western Venezuela. With the financial support of the central
government with 340 million dollars, the governor of the Táchira state, José
Gregorio Vielma Mora, imported 10 million CLAP boxes. Corporación Única de
Servicios Productivos y Alimentarios (Cuspal), which reports to the Ministry of
Food, and the state-owned Corporación Venezolana de Comercio Exterior (Corpovex)
– a sort of a large public importer - are other consignees of the Mexican
cargo.
The purchases have been mediated by at least two entrepreneurs
questioned in several jurisdictions, but close to Maduro’s government,
Venezuelan Samark López and Colombian Alex Saab, the latter linked to the former
Colombian senator Piedad Córdoba and investigated in Ecuador for irregularities
in other of his businesses with Venezuela.
Saab, for example, used a
registered company in Hong Kong called Group
Grand Limited to buy the products in Mexico and then resell them to the
Government of Táchira. The data from the Ministry of Economy of
Mexico are once again revealing. If you cross the price reflected in the
invoices issued by Group Grand Limited with the values ??of Mexican exports to
Venezuela reported by the agency, it is evident that filling the CLAP box costs
in Mexico about 16 dollars, while the Saab company resold it for almost 34
dollars.
The only
products that Venezuelans paid at a price similar to that reported by Mexico for
its exports to Venezuela, according to the invoices of Group Grand Limited, were
powdered milk, sugar and vegetable oil. In contrast, corn was resold to more
than six times its value. In other words, two 1-kilo bags of corn flour, which,
according to the Ministry of Economy were exported at $ 0.54, were placed at $
3.40 in the CLAP boxes sold by Group Grand Limited. Rice, mayonnaise and tomato
sauce triples the cost.
Group Grand Limited completed the majority of the
business with the Government of Táchira on January 9-31, 2017, based on the
dates of the invoices. It is almost the same period in which Samark López also
started massive purchases of food in Mexico through Postar
Intertrade Limited, a company registered in the island of Barbados.
In just
seven days in January (9-16) Lopez's company bought food from at least nine
Mexican companies for 11,992 billion dollars, Grupo Soriana; Value Oriented
Services (VOS), created five years ago by Kenneth Moskal, former director of the
Soriana Supply Chain; The modern; Golden Foods, Cereales y Pastas SA de CV;
COPROP, SA de CV; Aktion Trade Services; Comercializadora DTLP and Grupo Pando,
according to different invoices.
At that
time, the Office of Foreign Assets Control (OFAC) of the US Department of the
Treasury had not publicly identified Samark López as "front man" of Vice
President of the Republic Tareck El Aissami, accused by Americans for
participating in drug trafficking. That sanction from Washington occurred in
early February, just when the port of Puerto Cabello - the main one in the
country, some 300 kilometers from Caracas - arrived from shipping company
Hamburg Sud with the first shipment that Postar Intertrade Limited sent from the
port of Veracruz for the Venezuelan government.
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Samark López Figures
Carlos
Paparoni, deputy of Primero Justicia (political party), part of the opposition
alliance Democratic Unity Roundtable (Mesa de la Unidad Democrática, MUD) does
not hesitate to state that Samark López created a scheme in which the only
beneficiary is the Venezuelan businessman by overcharging the merchandise or
charging for insurance and freight through PYP, another company that he owns.
“Optimization is not the business priority. It sets the price and brings what it
pleases (...) They have used food to make big money," sums up the member of the
parliament.
The
calculations of the also vice president of the Commission of the Comptroller’s Office
of the National Assembly indicate that the value of the box in Mexico for Postar
Intertrade Limited would not exceed $ 11 and the price in Venezuela would be $
12.44, but Samark Lopez’s company billed them at $ 22.22.
"That sir
(Carlos Paparoni) having the nerve to affirm that we consciously planned a
scheme to play with the hunger of our people, is something that cannot be
allowed not only to him but to anybody," defended the businessman in an
interview granted to the Miami Herald newspaper and published on July 6.
Contacted for this report, he insists that Paparoni "forges reality" and that
"we have nothing to hide", in reference to the operation of Postar Intertrade
Limited.
Samark
López says that the contract signed with state-owned company Corpovex after
"winning" a tender "does not reach 120 million dollars" to trade 3 million CLAP
boxes. A simple division between the amount of the agreement and the merchandise
to be sold shows that each box was sold at almost 40 dollars, a figure that
would almost triple the value of what the Mexican Ministry of Economy reports
for each kilogram of products exported to Venezuela and included in the CLAP
pantry. According to the businessman, this differential may be associated with
the "difficulty of consolidating this type of export of food combos".
Sources
familiar with the operation of Postar Intertrade Limited, and confirmed by
Samark López, indicate that the slightly more than 1 million CLAP boxes shipped
in two shipments, were at a cost of about $ 31 each and sold to the Venezuelan
government at $ 39 per unit. That would mean that for each CLAP box sold, the
entrepreneur obtained 8 to 9 dollars, multiplied by 3 million combos, as he
said, they would report a total profit of about 25 million dollars in a matter
of months. " I first tried to do it from the USA, but we needed corn flour and
powdered milk," he says about the purchases in Mexico. He said that he worked
with a profit margin of 22% "before taxes".
For the
first and only two shipments due to the sanctions of OFAC, Samark Lopez invested
nearly 40 million dollars. This total includes "logistics" expenses, the payment
to the shipping company, the "personnel" of the company and the cardboard boxes,
costs that almost represent a quarter of the 40 million dollars.
However,
the sources consulted assure that the contract that Postar Intertrade Limited
signed in January of this year with the state-owned Corporación Venezolana de
Comercio Exterior (Corpovex) was for 2 million CLAP boxes that had to be
dispatched 90 days from the signing of the agreement. If so, the price at which
Postar Intertrade Limited would have sold each box to the Venezuelan government
would be even more expensive, as would the final profit margin for Samark
López." As far as I know, it was 3 million. It is a 3-million contract to be
delivered in 180 days," he insisted.
In any
case, Postar Intertrade Limited has only been able to send two shipments to
Venezuela, totaling just over 1,100 containers and almost one million one
hundred thousand CLAP boxes.
That total
of containers is equivalent to more than half of those sent to Venezuela for
other business with the government, according to a presentation on the
activities of the company provided by the team of Samark López. "In five years,
over 2,094 containers with different supplies were shipped from the United
States of America and Mexico to the Bolivarian Republic of Venezuela," says the
presentation in an attempt to highlight the "trajectory" of Postar Intertrade
Limited.
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The effect of sanctions
The
sanctions of OFAC, issued last February, affected Samark López’s food import
business. That month, the first shipment arrived and the second just berthed in
Venezuela last April, two months later than expected, because Corpovex covered
the name of Postar Intertrade Limited of that operation. "The boxes were already
manufactured and Corpovex paid the freight and shipping insurance," explains the
businessman.
Shipping
documents confirm that on April 4 of this year, the Easter Island ship of
Hamburg Sud sailed from Veracruz towards the port of Puerto Cabello, on the
central coast of the country, with about 500 containers with “food combos."
After downloading that ship, the company has not made new shipments.
"
From April 10, 2017 to
date, Postar has not made any shipment of food combos for CLAPs," says the
company presentation. Samark López even adds that Corpovex owes both shipments,
as well as some related to the sale of bulk food in 2016. "Our contract is in
dollars. We are a company that financed the entire operation," he
says.
He added
that the non-payment is due to the effect of OFAC sanctions against him, which
he has "taken seriously from the first moment," as well as the government's
financial difficulties in honoring its commitments. "They owe us a significant
amount of money."
If the
sanctions by the US Department of the Treasury seem to have disrupted Samark
Lopez's businesses, the same could happen with the operations of Alex Saab, as
well as the state companies that buy food in Mexico for the CLAPs. Last week,
the government of Peña Nieto announced a tightening of the relationship towards
the Venezuelan authorities from the broad sanctions announced by the United
States of America due to the celebration of the National Constituent Assembly
(ANC).
One of
these measures involves the collaboration of Mexico with the US government to
also track the assets of "many officials and former officials of the Venezuelan
government for undermining democracy and human rights in that country, as well
as for participating in acts of violence, repression and corruption," regarding
another 13 Venezuelans listed by OFAC last week.
In
addition, Peña Nieto has joined the chorus of governments and countries that
will not recognize the results of the ANC, with which the Venezuelan president
will finally annul the parliament, dominated by the opposition since January
2016. Only then, the relationship between Peña Nieto and Maduro, two presidents
separated by ideology, but united by business in recent months, would
end.
Note: This
work was a joint investigation with the Mexican journalist Claudia Solera, from
the newspaper Excélsior.