SUCRE: chavista virtual payment mechanism is the latest corruption scam

Wikipedia (handle with care) defines it thus: "SUCRE (Spanish: Sistema Único de Compensación Regional, English: Unified System for Regional Compensation) is a proposed regional currency to be used in commercial exchanges between members of the regional trade bloc Bolivarian Alliance for the Americas (ALBA), which was created as an alternative to the Free Trade Agreement of the Americas (FTAA). The SUCRE is intended to replace the US dollar as a medium of exchange in order to decrease US control of Latin American economies and to increase stability of regional markets." A noble endeavor, some will say, by the late Hugo Chavez and satellites in his shrinking sphere of influence to "brake away" from Uncle Sam's imperialism and affirm national sovereignty (include here chavista argument du jour...)

In practice, as with everything proposed by chavismo, SUCRE has turned out to be nothing but a huge corruption racket. The modus operandi seems to work like this:

- company A is formed in Ecuador (national currency U.S. dollar);
- company B is formed in Venezuela (national currency Bolivares Fuertes, forex restricted);
- company A "sells" goods to company B; for that to happen company A needs to provide certificate of origin of goods, export license and demonstrate that goods are free from duties, all permits must be issued by competent Ecuadorian authorities;
- company B goes to one of the banks approved by Venezuela's Central Bank (bank C) to grant SUCREs to pay for imports;
- bank C processes request of company B for X amount of SUCREs to pay for goods "sold" by company A; for this to happen company B must have registered with RUSAD, a register of companies maintained by CADIVI (Venezuela's forex control authority);
- upon conclusion of all relevant checks by bank C, it informs CADIVI and Venezuela's Central Bank of company C's SUCREs request;
- CADIVI / Venezuela's Central Bank approves SUCRE's request of bank C on behalf of company B;
- bank C communicates the news to bank E (counterpart of exporter / company A in Ecuador);
- bank E issues a payment to company A in Ecuador (in local currency, i.e. U.S. dollar);
- company B "gets" the goods, company A gets paid, all laugh on the way to bank...

Problem with the above is, as press reports have recently exposed, that company A's exports aren't even produced in Ecuador and could be entirely made up. According to El Comercio, once the SUCRE payment mechanism started, exports from Ecuador to Venezuela grew from $7 million in 2010 to $910 million in 2012. Ecuadorian tax authorities have identified 200 companies that could be involved in "fictitious" exports to Venezuela, read empty containers making rounds in order to scheme millions of dollars out of the system.

El Comercio's editor Gabriela Quiroz has been leading investigations into this corruption racket. She got in touch, asking if we could help identify those behind Venezuelan companies, and the findings are shocking. Take for instance Intraecua (Intraecua International Trading Inc), one of the companies at the centre of this investigation. It was registered by a Venezuelan called Yavi del Castillo Pardo (pictured)  in Florida in April 2012. The address provided (304 SW 160TH AVENUE, SUITE 625, SUNRISE, FL 33326​) is Weston 8 Cinema, according to Google Maps. But that didn't stop his company, Intraecua, from getting $800,000 worth of SUCREs per day.

Del Castillo had a twitter account (@ydelcast) which appears to have been closed. There's no record of Intraecua in Venezuela's register of contractors, nor in CADIVI's list of companies approved to receive USD. Intraecua has "exported" a few things to Venezuela: from vitamins to food processing equipment to chemicals. The companies Intraecua has "sold" stuff to in Venezuela are either non-existent -as Medical Supplier 2020 or Importadora Danmig- while others -such as PRODUCTOS ALIMENTICIOS PIGOLLO or IMPORTACIONES ARICAGUA- not only are not registered with CADIVI but have even been suspended from Venezuela's register of public contractors. That private banks, central banks, tax and customs authorities, and company registers in at least three countries have failed to do due diligence on this sort of schemers and have allowed nearly a billion dollars to be paid to fly-by-nights headquartered in cinemas suggests, unequivocally, that official complicity is not only a given, but rampant.

Quiroz also reports that once companies in Ecuador get paid, funds are immediately siphoned out of the country to the usual places: Panama, Switzerland, Hong Kong, U.S.A. Venezuelan companies identified thus far:

- Medical Supplier 2020;
- Importadora Danmig;
- Sutulap;
- Qdeveca;
- Wintoca;
- Importadora Manuela Sáenz de Venezuela 2421;
- Productos Alimenticios Pigollo;
- Importador Balu;
- Alimentos de Venezuela KGL;
- Importaciones Aricagua;
- Importador A Mac Kuei;
- Importadora Nueva Vida;
- Industrias Imserso;
- Inversiones Transernaga;
- Comercializadora Bicentenaria 2020;
- Easy Plast;
- Serviproduct Young Fast.

Some of them have links to Venezuela's register of public contractors (all suspended), the others have little or no web presence. It would be interesting to learn which banks in Venezuela sent requests to CADIVI and Venezuela's Central Bank on behalf of the companies above. Current requirements place responsibility of compliance checks solely with approved banks, meaning neither CADIVI nor the Central Bank check legitimacy of paperwork required. In the meanwhile, nearly a billion has been paid out.