Tension in Uruguay for US sanctions against key bank in Tabaré Vázquez's relationship with Venezuela

The Central Bank of Uruguay hopes for a hectic week for Uruguay Bands after the sanctions imposed by the United States on this institution. The Office of Foreign Assets Control of the Treasury Department (OFAC) has sanctioned Bands Venezuela and its subsidiaries in this country (Banco Bicentenario del Pueblo, working clbad, Women and communes – Banco Universal and Banco de Venezuela), Banco Prodem SA of Bolivia and Banco Bandes Uruguay. The measure was taken following the arrest of Roberto Marrero, Juan Guaidó's chief of staff.

The OFAC report states that "in early 2019, Maduro has attempted to withdraw more than one billion dollars from Venezuela through Bandes at its Uruguay subsidiary, Banco Bandes Uruguay SA"The sanctions will involve the freezing of all badets and badets that these entities may have in the United States, or in the possession or control of US nationals, and prohibit them from engaging in any financial transaction with US persons or entities or in transit through the United States. the country.

Uruguay customer bands will be seen concerned with remittances abroad, receive funds from abroad or carry out international trade transactions. In addition, since March 2020, issuers of Visa, MasterCard and American Express cards can no longer be linked to the bank. Bands Uruguay is currently working with Visa.

They will not be affected by the transactions in Uruguay, whether for current accounts, the recovery of wages or operational with the cards issued by the bank, from which they have preferred not to make any comment, being understood that they are an institution dependent on a matrix that is in Venezuela.

Friday evening, the Central Bank of Uruguay (BCU), it was announced that Infobae this would not be done for the moment by comments on the sanctions, during this weekend, the monetary authority of Uruguay will advise in detail what the measure entails and how it can affect the local market. The central question is how other banks based in Uruguay will act in response to a sanction constituting the first time that an actor from the local banking world is produced. In Uruguay, all commercial banks are international, with the exception of Banco República.

Itaú de Brasil, Scotiabank (Canada) and Spanish companies Santander and BBVA lead financial institutions. To these are added HSBC, Banque Heritage, Banco Nacion de Argentina and Citibank.

It is feared that a measure taken by foreign institutions will be Restrict interbank operations by leaving the Venezuelan bank in the background. The BCU also think that next week, the movements of customers with deposits will be the object of particular attention, because they fear a strong loss of them, because nobody wants to have relations with a bank sanctioned by the United States.

But none of the Uruguay Bands will be able to receive capitalization from its parent company. The international operations that arrive in Uruguay go through J.P. Morgan, the US bank, which acts as a correspondent of the Uruguayan Central Bank. From the BCU, the operations are directed to the banks. Therefore, since J.P Morgan is a US bank, it will not go abroad and will not send money from anywhere on the planet to Uruguay Bands. This places the Venezuelan bank in a complex situation.
It is also expected that Moody's, the Uruguay Strip rating agency, will take a resolution next week regarding the greenback because of sanctions imposed by the United States.
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Bands arrived in Uruguay in 2006 when he took over Cofac, a financial cooperative that eventually became a bank but went bankrupt shortly thereafter. A little over a year had taken Tabaré Vázquez in what was the first broad-based government and had sought the help of Hugo Chávez to save an institution that no one wanted and if a buyer did not want it. was not bankrupt, A reversal of the 2002 banking crisis.

Chávez then saw the opportunity to develop in the region and the Bands would become the bank with which all business between Venezuela and Uruguay would be exploited. It is presently present in 10 of the 19 departments (provinces) of Uruguay.

Although he has never had very positive figures in his operations, he has channeled the activities of the Frente Amplio governments with Venezuela over the last 13 years.
According to the BCU data at the end of February, the Bands had 28,000 clients with deposits, of which 774 are foreigners. Of these, 409 made investments for less than $ 5,000, compared to 175 for the $ 50,000 to over $ 250,000 range. Total deposits amount to approximately $ 190 million.

In a recent appearance before the Parliament's Special Committee on Transparency, Anti-Money Laundering and Organized Crime, Graciela Bianchi (National Party) said: "My advisers have agreed that, in 2018, non-resident deposits in Bands increased from $ 53 million to $ 98 million, figures available for publication. By the end of 2017, almost all non-resident band customers were Venezuelans; In addition, it can be seen that at the beginning of 2018, the bands had 27 non-resident customers representing more than $ 250,000 and that by the end of 2018, there were 44 clients in these circumstances, ie at least $ 17 million. new customers … the only option that seems plausible is that new customers must be Venezuelans and have links with their government. "

Juan Pedro Cantera, Superintendent of Financial Services of the BCU, said on this occasion that Bandes "operates internationally, including the management of liquidity and the payment of institutions related to its shareholder, Banco Venezuela Bands "a public bank in Venezuela, where purchases of goods and services made by Venezuela are made through Banco Bandes Venezuela, some of which is routed through Banco's intermediary. Uruguay bands. "

These deposits are placed by public entities, companies and Venezuelan governorates, which uses Uruguay Bands for international operations. When several financial correspondents were closed in the United States, all international operations of the Venezuelan state were channeled through Uruguay. After the sanctions imposed by the United States, this type of operation will be paralyzed.

As a result, foreign depositors can take their money but must seek to transfer it abroad when they wish to withdraw from the country as they can not do more for the Bands.