The The Sucre system (Regional Compensation Unit System) is practically hopeless after thirteen years of existence. Created in April 2009, the system signed by Venezuela, Ecuador, Bolivia, Nicaragua and Cuba is in the clear process of liquidation after a series of corruption scandals that include money laundering (including Foglocons), zero import and export transactions , non-payment of dues by member countries and non-accountability by the Council of monies delivered by member countries.
A report from the technicians of the Central Bank of Ecuador (BCE) last October shows the main problems that afflict the Sucre, and even recommends analyzing the possibility of suing said treaty.
An example of its weakening is the abrupt drop in its transaction level “until zero operations in 2020,” says the report. Its evolution could be divided into two periods: the first from its creation until 2013, a stage in which its maximum channeled value is reflected (in 2012 with $1,065.9 million), and the second from 2014 to date, in which the use of this mechanism decreased significantly. By 2019, barely $1.69 million. In contrast, in 2020 and 2021 no transactions have been generated.
Of this total number of transactions, the most active country was Ecuador. Transactions in our country reached $834 million in 2012 and gradually decreased until in 2019 they were $1.69 million. In 2020 and 2021 there were also no transactions from Ecuador.
When making an evaluation of what happened with the Sucre during these thirteen years, Marcos López, former director of the ECB, considers that it was a mistake for Ecuador, which had a hard currency, to enter this system. When a country has a hard currency, it does not need to demand foreign currency. Compensation systems serve to avoid having to require so many currencies and be compensated. “It is a crime to enter a weak currency when my economy is in a strong currency.”
But also, he explains, when Ecuador enters the Sucre system, the balance of payments with Venezuela is mysteriously reversed. It is that before the Sucre, Ecuador was a net importer of Venezuela, and with the appearance of the system, it becomes an exporter to Venezuela.
According to data from the ECB, in the period 2010-2020, most of Ecuador’s exports to the Sucre bloc they went to Venezuela and Bolivia; during these years, their total share accounted for 85% and 6%, respectively. In the same period, most of Ecuador’s imports came from Bolivia. This country concentrates 74%, followed by Venezuela with 20%, Cuba with 4% and Nicaragua with 2.5%.
However, it is now known that many of these exports from Ecuador were fictitious, within a money laundering scheme that is being investigated in the US and now also in Ecuador. Marcos López explains that these opaque movements benefited the supposed buyers from Venezuela. It is that to pay for the purchases they made to Ecuador they paid with sucres, but Ecuador had to convert the sucres into dollars to pay the exporting companies in Ecuador. Since Venezuela did not pay in dollars, then Ecuador handed over its dollars, taking them from the Reserve, since there was a six-month compensation system. Immediately, those companies in Ecuador and with ties to Venezuelan businessmen took the money in Ecuador to tax havens.
López considers it logical that transactions in the Sucre system have fallen so much, since currently any common sense exporter will prefer not to use that system.
The ECB report urges the manager Guillermo Avellán, in his capacity as principal director before the Regional Monetary Council (CMR) of Sucre, to make the situation of the system known to the Ministry of Economy and Finance and the Ministry of Foreign Affairs and Human Mobility, “so that the Ecuadorian State assesses the relevance of continuing to be part of the Constitutive Treaty of Sucre.”
About the topic, Jaime Carrera, Executive Secretary of the Fiscal Policy Observatory (OPF), it is very clear. The Sucre system only served to launder money through companies that traded fictitiously, that is, it served for corruption. “That’s the diagnosis,” he says.
However, he thinks that before leaving the Treaty, the Government should try to obtain the necessary information from the Central Bank to be able to sue those responsible for both enabling dark operations and those who misused the Reserve. For Carrera, those involved are from many institutions: Customs, the ECB, companies, among others.
The most sensible thing is for the Prosecutor’s Office to take the investigation with the rigor of the case and establish those responsible at all levels: “This must remain as a national precedent in the fight against corruption,” he says.
Meanwhile, at the moment there is a preliminary investigation open in the Prosecutor’s Office on Sucre, based on a criminal responsibility report from the Comptroller’s Office. From what is known, a series of proceedings have been taken up these days to advance the process. For its part, the Oversight Commission, which conducted an investigation into the case and established evidence on the alleged money laundering processes through Sucre, has presented the conclusions to both the Ecuadorian Prosecutor’s Office and the Colombian authorities.
Bandes blocks funds from Sucre, which is on ‘administrative pause’
According to the Central Bank, in the LII Meeting of the Sucre Board of Directors, held on October 11, 2019, in Caracas, the directors agreed to submit to the consideration of the highest authorities of the member countries the put the Sucre system on an administrative pause. The meeting was not attended by the representatives of Ecuador.
However, the ECB report indicates that there were several reasons for making that decision. There was talk of lack of budget, low flow of commercial operations and difficulty in opening bank accounts in member countries.
In addition, it was known that The US and the European Union have applied sanctions to several member countries.
At that meeting it was recognized that there a financial blockade of the resources of the Reserve Fund and Commercial Convergence of the Sucre system, placed in trust, in a special account of the Bank for Economic and Social Development of Venezuela (Bandes). (I)
Source: Eluniverso
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