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The United States is pushing the maritime industry to cut Venezuela's oil



(Reuters) Several companies certifying vessels are seaworthy and ship insurance companies have withdrawn services to tankers involved in the Venezuelan oil trade as the United States targets the maritime industry to tighten sanctions on Latin American the country.

US sanctions have propelled Venezuela's oil exports to their lowest levels in almost 80 years, starved President Nicolas Maduro's socialist government of its main source of income and left the government with shortages of cash for essential imports such as food and medicine.

The sanctions are part of US efforts to weaken Mr. Maduro's hold on power after Washington and other Western democracies accused him of staging a 201

8 re-election. Despite the country's economic collapse, Maduro has kept frustrating the administration of the US President Donald Trump.

Mr. The Maduro government says that the United States is trying to seize Venezuela's oil and calls the United States action for illegal persecution suffered by the suffering of the Venezuelan people.

Washington has encountered the maritime industry in recent months to better implement sanctions on the oil trade and isolate Caracas, Washington's special envoy in Venezuela, Elliott Abrams told Reuters.

"What you see is most shipowners and insurance and captains will simply turn away from Venezuela," Abrams told Reuters in an interview. [19659002] "It is not worth the trouble or risk to them."

The United States is pushing shipping companies, insurance companies, certifiers and flag states to register ships, he said.

Ship classification societies, which certify safety and environmental standards for ships, feel the heat for the first time.

The United States is pushing classifiers to determine whether vessels have violated sanctions and to withdraw certification if that is a way to further tighten sanctions, a US official told Reuters, speaking on anonymity.

Without certification, a ship and its cargo will be uninsured. Shipping companies would also violate commercial contracts requiring the retention of certificates. In addition, the port authorities may refuse entry or detain a ship.

London headquarters Lloyd & # 39; s Register (LR), one of the world's leading ship classifiers, said it had withdrawn services from eight tankers involved in trade with Venezuela. [19659002] "In accordance with our Sanctions Compliance Program, where we become aware of vessels that violate relevant sanctions laws, LR classification has been withdrawn," said a spokeswoman for Lloyd's Register.

Mr. Abrams said the pressure on the maritime industry worked.

"We have had a number of senders come to us and say: & # 39; We just had our insurance company withdraw the insurance, and the ship is at sea and we have to get to the port. Can you give us a license for a week? "Abrams said.

In June, the United States named six shipping companies – two of them based in Greece and six tankers they owned for

Another leading ship classification, Hamburg headquarters DNV GL Maritime, said it had suspended services for three of these vessels in June.

The company resumed services when the United States removed these vessels from the list of sanctioned entities after the shipping companies that owned and operated the vessels ceased trading with Venezuela. [19659002] Cooling effect

The United States has threatened sanctions against all companies involved in oil trade with Venezuela, and it has had a cooling effect even on trade permitted under sanctions.

Some oil companies refuse to charter vessels that have called on Venezuelan ports in the past year, even though the trip was, for example, from sanctions.

"The shipping sector has been at the end of US efforts against Venezuela, and it has caused a lot of uncertainty because nobody knows who will be next, "said a shipping company within the chain.

Insurance companies are also in a bind. They have been conservative in their interpretation of US sanctions to avoid any violations, says Mike Salthouse, chairman of the Sanctions Subcommittee with the International Group. The group represents companies that insure about 90% of the world's commercial shipping.

"If it is unclear what is legal and what is illegal makes it almost impossible for an insurer to say whether someone has coverage or not," he said.

Even after vessels and companies have been removed from the list of sanctions, they can face difficulties, Salthouse said.

"The stigma associated with a designation can last longer," he said.

Oil majors, for example, can review relationships with companies that own or manage vessels designated by the United States and then removed to avoid any problems with other vessels, he said.

"Real threat"

Venezuela is on the list of high-risk areas established by London insurance market officials.

"If a ship sails to Venezuela, they must notify the insurer, and it may be that the insurer will not be able to cover them," said Neil Roberts, head of m arine underwriting at Lloyd & # 39; s Market Association, representing the interests of all insurance companies in the London Lloyds market.

The industry is facing "the direct and real threat of having its trade stopped by a watchful US administration because of an unintentional intrusion," he said.

"This risk alone is sufficient to drive the compliance control multiplication."

Some of the largest global flag registers including Panama and Liberia are also looking closely at vessels involved in Venezuela's trade as they come under US pressure to withdraw registration for vessels that violate sanctions.

Panama's maritime lawyers said its records fine fined vessels that do not follow the U.S. Maritime Administration issued in May. The registry mostly winds up vessels that target multilateral sanctions rather than unilateral US sanctions, the lawyers said.

Officials at the Liberia Register did not respond to the request for comment.

U.S. Secretary of Commerce Wilbur Ross, a former maritime investor, helped shape the strategy for the maritime sector, sources said.

A Department of Commerce spokesman acknowledged that Ross had been working with other government agencies "to determine how best to be held accountable they are avoiding US sanctions" against Venezuela.

Mr. Abrams promised to keep the pressure up.

"There are people who do not cooperate. … We go after the ship, the shipowner, the ship captain. "


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