Guillermo Lasso described as damaging oil contracts with China, in which intermediaries acted

The President of the Republic, Guillermo Lassonoted as Harmful to the interests of Ecuador are the contracts for the commercialization of crude oil with China. He explained that there some $2,000 million of the total debt of $4,600 million with that country, related to this type of contract from which Ecuadorian and international intermediaries benefited, he said.

In this regard, he explained that during his recent visit to China, the request the president of China, Xi Jinping, to renegotiate the Ecuadorian debt. The Government’s position has been, on the one hand, to thank the help that China has given us on the subject of vaccination, but also to explain that the pandemic generated economic problems at a global level. So, it has been asked extend terms of the total debt, lower rates and, finally, decouple crude oil from those contracts where there are Ecuadorian and foreign intermediaries who have taken advantage of it.

Now, what fits is that the economy ministers of China and Ecuador sit at a tableso that they talk, as they already talked before the trip, and get to work on the process, he said.

Indeed, from what has been known in Ecuador, reports from Petroecuador, revealed before the Control Commission of the Assembly, confirm that the damage to the marketing of crude oil in contracts with Asian companies has been $3.6 per barrel. Additionally, the awarding of contracts that is not very transparent is contaminated by corruption schemes and bribery payments, which have been revealed in US courts by Raymond Kohut, former Gunvor (Russian oil broker) strongman. Recently, this newspaper revealed how European banks also participated in the intermediation plot, working with the intermediaries.

Lasso said that his government is going to act with transparency, and information on debt contracts and crude brokerage will be published. On the other hand, he rejected the actions of the Government of Rafael Correa in which these contracts were concluded, and in which, moreover, they were declared confidential. “The terms of the financial relationship with China should never have been confidential; We all have the right to know what the government negotiated,” he said.

The president said that in general, the financial terms and the balances that Ecuador currently has with China have reasonable terms. However, the obligation to sell the oil “supposedly to China” is detrimental to the country. In this sense, he announced that he will surrender to the The Prosecutor’s Office and the State Attorney’s Office the information collected and the possibility of initiating legal actions will be considered, both local and international, with a view to protecting the interests of Ecuadorians.

Another important issue, announced this morning by President Lasso, was that no further financing will be taken from China. He explained that this year the high price of crude oil supports the economy and there would be no need for further indebtedness. “We have the accounts in order,” he said.

Lasso also assured that the issue of Coca Codo Sinclair was not at the talks table, since issues that have legal or arbitration conflicts were not included. In any case, he recalled that this asset has not yet been officially received by Ecuador and in its contractual process there is still room for claims.

Taxes

About the annoyance that exists in certain sectors of those who earn more than $2,500 due to the increase in Income Tax, the president said he understood the discomfort of taxpayers, because nobody likes to pay taxes. However, he guaranteed that these monies are being used well and gave as an example the financing of programs against child malnutrition, bonds for vulnerable mothers.

He also stressed that there are no corruption scandals in his government. He assured that the increase in tax collection that has occurred in these months is due, in addition to the economic reactivation, because the SRI is charging those who were not paying before, even though they should have. He also highlighted that provisions have been established in the new Law on Economic Development and Fiscal Sustainability so that no one who has business in Ecuador can argue that they are not a tax resident and thus avoid paying taxes.