|
|
|
|
Search: 
Latin American Herald Tribune
Venezuela Overview
Venezuelan Embassies & Consulates Around The World
Sites/Blogs about Venezuela
Venezuelan Newspapers
Facts about Venezuela
Venezuela Tourism
Embassies in Caracas

Colombia Overview
Colombian Embassies & Consulates Around the World
Government Links
Embassies in Bogota
Media
Sites/Blogs about Colombia
Educational Institutions

Stocks

Commodities
Crude Oil
US Gasoline Prices
Natural Gas
Gold
Silver
Copper

Euro
UK Pound
Australia Dollar
Canada Dollar
Brazil Real
Mexico Peso
India Rupee

Antigua & Barbuda
Aruba
Barbados
Cayman Islands
Cuba
Curacao
Dominica

Grenada
Haiti
Jamaica
Saint Kitts and Nevis
Saint Lucia
Saint Vincent and the Grenadines

Belize
Costa Rica
El Salvador
Honduras
Nicaragua
Panama

Bahamas
Bermuda
Mexico

Argentina
Brazil
Chile
Guyana
Paraguay
Peru
Uruguay

What's New at LAHT?
Follow Us On Facebook
Follow Us On Twitter
Most Viewed on the Web
Popular on Twitter
Receive Our Daily Headlines


  HOME | Main headline

Russia Confirms Venezuela Defaulted on $1 Billion
Venezuela has caused a $1 billion hole in Russia's budget due to the South American country's default on its obligations to Moscow, the country's Audit Committee confirmed after an investigation by RBC and LAHT

CARACAS -- Venezuela has caused a $1 billion gap in Russia's budget due to the South American country's default on its obligations to Moscow.

The Venezuela default was confirmed by Russia's Audit Committee after an investigation by reporters for Russia's largest independent media conglomerate RBC with assistance from reporters from the Latin American Herald Tribune helped uncover and investigate the shortfall.

The Audit Chamber was forced to amend Russia's federal budget for 2017 as the result of the Venezuela default.

The amendment provided for a decrease in the volume of returns on public finance and export credits by 53.9 billion rubles (about $ 950 million), "which is associated with the failure of the Bolivarian Republic of Venezuela terms of the intergovernmental Russian-Venezuelan Protocol of 23/26 September 2016," the Accounts Chamber reported.

Compounding the severity of the situation, the September 2016 Protocol (see below), was a renegotiation of Venezuela's debt default to Russia last year. The September 2016 Renegotiation was the second restructuring of the debt -- the first having taken place in September of 2014.

In the 2016 Protocol, Russia and Venezuela had agreed to restructure the Venezuelan debt of $ 2.84 billion, with a new schedule of payments $530 million through 2019-2021. The other $2.2 billion of the debt was to be repaid by Venezuela within five years, with the first payment due on March 31, 2017. The Audit Committee action suggests that Venezuela failed to make even the renegotiated payment due in March.

Russia loaned Venezuela $4 billion in December of 2011 to finance Russia's supply of industrial products to Venezuela, mainly defense products, including 92 T-72 tanks, 24 Sukhoi fighter jets, S-300 anti-aircraft missile systems, 15 Mi-35m combat helicopters, 20 Mi-17-1B multipurpose helicopters, 3 Mi-26T transport helicopters, in addition to guerrilla-favorite Kalishnikov rifles.

According to the 2016 Protocol, Venezuela had used $2.8 billion and began falling into arrears in 2015.

The September 2016 Protocol lists the cause of Venezuela's default as a "liquidity crisis."

At the end of 2013 Russian companies sold weapons to Venezuela for $ 2.65 billion and those Russian companies were paid by Moscow under the credit agreement. By April 2015, the Russian Ministry of Finance added another $962 million in finance, giving Venezuela $3.6 billion in credits for the purchase of Russian products.

According to the documents, Venezuela regularly paid the loan until 2015.

"The fulfillment of obligations occurred successfully. No overdue liabilities for interest or for the payment of the principal amount of the debt on the loan," reported Deputy Finance Minister Sergei Storchak to the Audit Committee.

However, Storchak reported that things started to get bad on March 31, 2016, when Venezuela failed to pay $265 million on the main debt. In September of 2016, Russia again restructured the Venezuelan debt, postponing $530 million for a few years later due to a "liquidity crisis" in Venezuela and "friendly relations" between the two states.

On March 31, 2017, Venezuela was due to pay Russia a semiannual installment of $362 million in repayment of principal, but from the explanatory note to the amendments to the budget, it appears that Venezuela has not done so.

In April and May, Venezuela and PDVSA had to together pay $3.7 billion in interest and maturities on their $66 billion dollar bond debt. PDVSA was late on its interest payments in May.

In December, the Latin American Herald Tribune helped uncover that Venezuela had mortgaged 49.9% of the Citgo refineries in the U.S. to Russia's state-controlled oil company Rosneft for $1.5 billion. LAHT editor Russ Dallen testified before Congress on March 28, calling for a CFIUS -- Committee on Foreign Investment in the U.S. -- review of the CITGO transaction. In May, Treasury Secretary Steven Mnuchin, who heads CFIUS, confirmed to Senator Bob Menendez during testimony that there would be a CFIUS review of the Rosneft - Venezuela Citgo transaction.

Emails to Venezuela government officials -- including PDVSA head Eulogio Del Pino -- by LAHT about the default during the investigation in May went unanswered.



Russia Venezuela Protocol on Default (English & Russian) - September 2016 by Latin American Herald Tribune on Scribd


Dallen - Testimony - Venezuela's Tragic Meltdown by Latin American Herald Tribune on Scribd


 

Enter your email address to subscribe to free headlines (and great cartoons so every email has a happy ending!) from the Latin American Herald Tribune:

 

Copyright Latin American Herald Tribune - 2005-2020 © All rights reserved