CARACAS/MEXICO CITY—Venezuela’s government is using little-known banks, including a small Puerto Rican lender, as intermediaries for some international trade operations after Citigroup
The government has turned to relatively unknown institutions to provide a service known as correspondent banking, as international banks are increasingly concerned about the risks of doing business with socialist-ruled Venezuela amid investigations into corruption and drug trafficking.
It also coincides with complaints by President Nicolas Maduro that Venezuela is struggling to obtain financial services amid a severe economic crisis characterized by triple-digit inflation and chronic shortages.
Government officials call the drug allegations a campaign against their administration by ideological adversaries in the United States, and insist Venezuela’s problems are being caused by an “economic war.”
The situation does not affect payment of state oil company PDVSA’s high-yielding bonds, which continue to be serviced by Citi due to contractual obligation, according to a 2016 letter from Citi to PDVSA bondholders seen by Reuters.
