This article is a case study for why financial institutions, crypto exchanges and MSBs must understand their transactions flows through their organizations, as well as the parties involved. This type of sanctions avoidance will continue, so understanding and monitoring the risks related to FX, correspondent relationships and intermediaries (i.e. vessels) will remain important for effective sanctions compliance.
"The diplomat stressed that the US penalties against the Venezuelan oil sector, along with freezing its dollar accounts, has had an enormous negative impact on the country’s economy. The measures deprived the Latin American nation of free access to international financial support and investments in its oil sector."
Venezuela and Russia are in talks to use the ruble in mutual trade settlements, thereby abandoning the commonly-used US dollar in country-to-country transactions. Further, the two countries are considering using El Petro, Venezuela’s oil-pegged cryptocurrency, as another medium of exchange. Venezuela‘s UN representative, Jorge Valero, told Russian house organ Russia Today about the upcoming trade plans. The Petro is pegged to the value of a barrel Venezuelan oil and the national currency, the bolivar, is pegged to the Petro. Venezuela hopes to avoid sanctions by disconnecting from USD and the Petro is an integral part of this process. It is also “swapping crude oil for imported products” according to RT.