https://udumbara.net/china-busts-us-sanctions-on-venezuelaand-america-says-nothing
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China Busts US Sanctions on Venezuelaâand America Says Nothing
CommentaryChina is thumbing its nose at U.S. sanctions on Venezuela and Iran; so far, the Biden administration does nothing about it. According to Reuters, China is now using front companiesâat least one unregistered and another a major defense contractorâto run illegal oil from Venezuela to the mainland.
Starting in August 2019, China National Petroleum Corp (CNPC) honored the U.S. sanctions due to fears of secondary sanctions that would affect its global operations. But the oil kept flowing via smaller Chinese companies that transshipped in Malaysian waters, and then falsely labeled the crude âMalaysianâ before receiving it in China.
Beijingâs Front Companies
The Chinese Communist Partyâs (CCP) latest scam is to evade secondary sanctions on its companies by using an unregistered company and a major defense contractor to ship the oil directly, without transshipment.
The Malaysian fig leaf has thus dropped, and China boldly flouts U.S. sanctions and issues foreign ministry press statements against them to boot.
According to Reutersâ sources, written up by reporters Chen Aizhu and Marianna Parraga, âSince November 2020 China Aerospace Science and Industry Corp (CASIC) has been carrying Venezuelan crude on three tankers it acquired that year from PetroChina, CNPCâs listed vehicle.â
A gas station belonging to the state-owned oil company, PetroChina, in Beijing, on March 21, 2016. (Kim Kyung-Hoon/Reuters)
To add insult to injury, the Chinese tankers keep their transponders on while loading the oil, at least 13 cargos totaling 25 million barrels ($1.5 billion), which allows the world to see that China flouts the U.S. sanctions.
PetroChina also provided a tank farm in Ningbo where CASIC receives and stores the contraband deliveries.
âAll Venezuelan oil cargoes received by CASIC were originally picked up at the Jose port by Cirrostrati Technology Co Ltd, a firm with no track record in oil trading, acting as [an] intermediary for only these cargoes, according to PDVSA [Venezuelaâs state-owned oil company] schedules,â according to Chen and Parraga. âReuters could not find the companyâs registration or incorporation information.â
CASIC and âCirrostratiâ apparently serve as front companies for CNPCâs normal operations to protect the latterâs global operations from secondary sanctions.
According to Reutersâ paraphrase of one source, CASIC âwas picked for the oil job because it is politically powerful and has limited global financial exposure, making it less vulnerable to sanctions.â
America Sanctions, China Benefits
The Venezuelan and âMalaysianâ oil is marketed at discounts of between $8 and $30 per barrel to independent refiners in China that also lack significant exposure to international markets and, therefore, are relatively invulnerable to secondary sanctions, according to Chen and Parraga.
In what amounts to an admission of guilt, one refinery executive from China told Reuters that the openly Venezuelan oil âis more costly, but itâs good that the government is now taking charge of these Venezuelan supplies, which saves us lots of logistics headaches and sanction-related risks.â
China flouts Iranian sanctions, too.
According to Bloomberg, China purchased 53 percent more Iranian and Venezuelan oil in 2021 compared to the prior year, likely because of the discounts they offered due to sanctions and the resulting lack of markets elsewhere.
While Chinaâs foreign ministry attempts to portray the oil-running as âhumanitarian,â the Venezuelan proceeds actually never leave China. They go from one Chinese bank account to another, to either pay down $50 billion in debt that a Venezuelan dictator, Hugo Chavez, contracted in 2007, or to pay for the substandard COVID-19 vaccines that China unloaded on Caracas during the pandemic.
The logo of the Venezuelan state oil company PDVSA is seen next to a mural depicting Venezuelaâs late President Hugo Chavez at a gas station in Caracas, Venezuela, on March 2, 2017. (Carlos Garcia Rawlins/Reuters)
The sanctions thus punish lesser rogue nations, but Americaâs failure to enforce them actually strengthens the worldâs most powerful rogue, the CCP.
âChinese buyers, particularly private refiners, have benefited from Washingtonâs tough line on Iran and Venezuela, continuing to buy their oil long after their counterparts elsewhere in Asia ceased purchases,â according to Bloomberg. âThe risk that non-U.S. entities may lose access to the U.S. financial system or have their American assets frozen if found guilty of breaching the sanctions hasnât dissuaded them.â
US Treasury Should Strengthen Enforcement
The Venezuelan and âMalaysianâ oil cargos originated in Venezuelaâboth types of cargo are sanctioned, and both CASIC and CNPC are Chinese state-owned enterprises. So failing to sanction CNPCâbecause of a web of legal technicalities invented in Beijing to be purposefully confusingâis an American excuse to do nothing.
But with this latest strategy of open import of sanctio