Back in January, a yearlong campaign of U.S. sanctions was taking its toll at Venezuela's state-run oil company. Many of PDVSA's overseas bank accounts had been frozen or closed, hampering its ability to pay vendors on whom it relies to keep the nation's crude flowing.
So, as the bills piled up, the company leaned on a longtime client from Thailand, Tipco Asphalt, to blunt the impact of the sanctions: in exchange for deep discounts on oil, Tipco would pay PDVSA's obligations and deduct the amounts from what it owed the Venezuelan oil giant, according to records obtained by The Associated Press.
PDVSA quickly took advantage of the arrangement. Over the course of a single day January 10 the oil company sent Tipco executives 43 emails related to payment instructions, prompting a mild rebuke from Jean-Pierre Pastor, Tipco's representative in Venezuela, who complained about the extra workload.
Tipco is a PDVSA client, not the Venezuelan central bank, Pastor wrote in bold and underlined text in an email to PDVSA.
Tipco tried as much as possible to assist you in this difficult period, he added. Let's hope you will not forget it..
The e-mail is just one of the dozens of documents obtained by the AP as part of a months-long investigation into how Venezuela is trying to skirt harsh U.S. sanctions that have exacerbated an economic collapse rarely seen outside war zones.
At a time when Nicols Maduro's government is seen as a pariah in the west, the financial arrangement with Tipco has quietly allowed PDVSA to move hundreds of millions of dollars around the world that it might not be able to otherwise, records show.
The publicly-traded Thai company says its payments to third parties are a perfectly legal, standard feature of its oil purchases from Venezuela, which are not barred by U.S. sanctions applicable only to American companies.
Nonetheless, the AP has learned that the outlays are being scrutinized by U.S. law enforcement and the Trump administration, which views them as a financial lifeline to Maduro.
The documents invoices, contracts, shipping records, and wire receipts were provided to the AP by a former PDVSA consultant located outside of Venezuela on the condition of anonymity for fear of retaliation.
Attorneys and forensic accountants who reviewed the documents said Tipco could be sanctioned for defying U.S. policy seeking to starve Maduro of oil income a risk Tipco itself acknowledged last month.
Processing payments for a sanctioned company could also spur a criminal fraud or money laundering investigation against Tipco in the U.S. if American financial institutions or companies were involved, as appears to be the case in a few instances, said David P. Weber, who spent years investigating corruption while employed at the U.S. Treasury Department and Securities and Exchange Commission.
It may have seemed a good idea to make a profit serving as a financial intermediary, said Weber, who now is a forensic accounting professor at Salisbury University in Maryland.
But in engaging in such risky activity, Tipco fell in with one of the most despicable governments in the world. Tipco on Sept. 11 - four days after the AP sent it detailed questions - announced that it would stop purchasing crude from Venezuela under pressure from the Trump administration.
The company in a filing with Thailand's stock exchange said it was first contacted by the U.S. Embassy in Thailand in December 2019 and a month later provided American diplomats a written explanation of its purchases from Venezuela.
Then in August, it was contacted again by the State Department, which warned it could be subject to U.S. sanctions if it didn't wind down its purchases by the end of November.
A U.S. official said that the State Department in its latest contact raised concerns about Tipco's financial support for PDVSA via payments to third parties. The official declined to be named because the conversations, part of an effort to work pro-actively with companies to eliminate the need for sanctions, were private.
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