Feb 26, 2019

Venezuela sanctions pose risks for financial institutions

The continually escalating U.S. sanctions on Venezuela have created problems for more than just the country's president and his inner circle. They are creating "new compliance risks for U.S. and international financial institutions," the Wall Street Journal's Mengqi Sun writes.

Why it matters: Venezuela's state oil company, PDVSA, which has been the target of some sanctions, has many subsidiaries and outsources much of its business to third-party vendors. That means banks are picking over transactions and potential customers with a fine-tooth comb, said Daniel Gutierrez, who chairs the anti-money-laundering compliance committee at the Florida International Bankers Association.

  • Banks are responsible for vetting their customers to ensure they don't have relationships with people or companies on the sanctions list and to flag and block questionable transactions.

The big picture: "The question the industry has is how far down that outsourcing chain do I have to go to determine if I have a sanction on Venezuela or not," Gutierrez said.

  • The deep connections between the U.S. and Venezuela in the oil industry goes much deeper than simply paying for gas. The sanctions can affect automobile and heavy machinery manufacturing, as well as elements of insurance and finance, said Cari Stinebower, a sanctions lawyer at Crowell & Moring LLP, tells WSJ.
  • "Anyone that touches the petroleum industry is affected by the sanctions, " Stinebower said.

Go deeper: U.S. sanctions Venezuela's state oil company in push for regime change

Go deeper

Minneapolis unrest as hundreds protest death of George Floyd

Protesters and police clash during demonstration on Wednesday over the death of George Floyd in custody outside the Third Police Precinct. Photo: Kerem Yucel/AFP via Getty Images

Minneapolis police clashed for a second night with protesters demonstrating the death of George Floyd, an African American man who died in police custody.

The latest: Minnesota Gov. Tim Walz tweeted late Wednesday that the situation where the clashes were taking place was "extremely dangerous" as he urged people to leave the area. There were multiple news reports of police firing tear gas at protesters and of some people looting a Target store.

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Photo: John Lamparski/SOPA Images/LightRocket via Getty Images

Six Blue Cross Blue Shield insurers have sued CVS Health, alleging the pharmacy chain overcharged them based on "artificially inflated prices" for generic drugs and concealed the true cash prices of those drugs.

The big picture: CVS has faced legal scrutiny over its cash discount programs since 2015, and this lawsuit adds big names to a mounting problem.

World coronavirus updates

Data: The Center for Systems Science and Engineering at Johns Hopkins; Map: Axios Visuals

New Zealand has only eight active novel coronavirus cases and no COVID-19 patients in hospital after another day of zero new infections. However, the death toll rose to 22.

Zoom in: A top health official told a briefing a 96-year-old woman "was regarded to having recovered from COVID-19 at the time of her death, and COVID-19 is not recorded as the primary cause of her death on her death certificate." But it was decided to include her in the overall tally of deaths related to the virus.