Iranian Military-Owned Conglomerate Sets Up Shop in Venezuela

Courtesy of The Wall Street Journal (subscription required), a report on a new Venezuelan grocer brings ties to Iran’s Islamic Revolutionary Guard Corps:

An Iranian conglomerate owned by the country’s military and tied to its missile program has established a retail foothold in Venezuela, according to officials and records detailing the move, deepening Tehran’s involvement with the Maduro government.

The Iranian firm is working with the Maduro government’s troubled emergency food program, which is the subject of U.S. enforcement action as an alleged money-laundering operation, compounding U.S. concerns regarding the move.

The arrival of the company, which also has ties to Iran’s elite military Islamic Revolutionary Guard Corps, designated by the U.S. as a terror organization, bolsters Tehran’s foothold in the Western Hemisphere and comes as Venezuela increasingly seeks assistance from U.S. foes, including petroleum from Iran and energy-industry assistance from Russia.

The U.S. has imposed sanctions against the governments of the two countries, both of which lauded the new venture as part of a growing diplomatic, military and trade relationship.

“Another success in friendly and fraternal relations between two countries,” Iran’s embassy in Caracas tweeted recently.

On June 21, an Iranian vessel discharged a cargo of food at a Venezuelan port to supply the Islamic Republic’s first supermarket in the Latin American nation, according to shipping trackers and comments by Tehran’s ambassador to Caracas, Hojatollah Soltani, released by the embassy.

Venezuelan media, including state-run news outlets, showed a giant, empty grocery store in the Venezuelan capital on the cusp of opening with fresh products. The location previously was a major outlet for Venezuela’s military-run emergency food program known by its Spanish initials, Clap.

The building now exclusively advertises brands owned by the Iranian military: Delnoosh, which makes tomato sauce and canned tuna, and Varamin, which makes sunflower oil. The firms are two of the many subsidiaries of a company called Ekta, according to its website, which was set up as a social-security trust for Iranian military veterans.

Ekta didn’t respond to a request for comment. Iran’s embassy in Caracas and Venezuela’s mission to the United Nations also didn’t respond to requests for comment.

Ekta is headed by Issa Rezaie, a veteran executive in companies owned by the IRGC, which has been blacklisted by the U.S. for its involvement in arms development and for directing proxies fighting across multiple Middle Eastern fronts.

Ekta is subordinate to the Iranian Ministry of Defense and Armed Forces Logistics, another entity sanctioned by the U.S. for its alleged role in ballistic-missile development, according to the U.S. Treasury.

Any Iranian business is required to have IRGC consent to operate overseas, according to U.S. intelligence reports. As part of Tehran’s sanctions-evasion efforts, Iranian officials have appointed retired IRGC leaders to head companies in key Iranian sectors, according to the intelligence.

The Clap program is the main food source for an estimated 15% of Venezuelans and a critical supplement for a far larger percentage of the population, analysts say. But U.S., Colombian and Mexican officials charge the Maduro government has used it to launder stolen state assets, proceeds from drug trafficking and other illicit activities.

U.S. officials and prosecutors say the Clap money-laundering operations were conducted through false invoicing of overpriced food imports by contracting companies owned or controlled by a Colombian businessman, Alex Saab.

Mr. Saab, who has been tied by U.S. officials to Venezuelan and Colombian drug cartels, was detained a week before the June supermarket announcement. Authorities in the West African island nation of Cape Verde acted on an Interpol notice issued after his U.S. indictment for alleged money-laundering offenses last year.

Mr. Saab was apprehended on the way back from Iran, according to U.S. officials. Venezuela’s foreign ministry said that he was on a mission as an agent for the government to “ensure procurement of food for [Clap] as well as medicines, medical supplies and other humanitarian goods.”

U.S. officials and Venezuela watchers question the legitimacy of the Clap program as well as Iran’s intentions in setting up the Venezuelan food operation.

“This is Iran’s sanctioned military taking advantage of the sanctioned but desperate Venezuelans to make money,” said Russ Dallen, the Miami-based managing partner of Caracas Capital Markets who tracks developments in Venezuela. “They are not doing it out of the goodness of their heart.”

The new venture follows meetings last month between Venezuela’s vice president of planning, Ricardo Menédez, and Iran’s ambassador to Caracas, Mr. Soltani, detailing “a strategic cooperation” in science, hydrocarbons, transport, industry and food, according to online Venezuelan government comments.

U.S. officials say they are concerned beyond the potential for the new commercial cooperation to offer new avenues for evading sanctions and money laundering. The collaboration also represents a possible security threat as Tehran exports its military expertise and technology, officials say.

One senior Western diplomat said their nation’s intelligence reported that Iran was transferring military technicians to Venezuela along with engineers Tehran sent to help the country restore its broken energy infrastructure. Top officials from both countries have held a series of recent meetings seeking to bolster cooperation, including in technology transfers.

Etka was established over 60 years ago as a supply store for military families, but became a giant agribusiness and, with 500 supermarkets, the country’s biggest grocery as European consumer-goods giants left Iran under a progression of sanctions programs. Etka’s products also are sold in Iraq and Tajikistan and it has held talks to enter Syria and Russia.

U.S. officials and Iran experts say Iran uses its government-controlled companies to evade sanctions and fund its weapons programs. The U.S. Treasury last year blacklisted the defense ministry overseeing Etka for using intermediary companies as a procurement network for its banned ballistic-missile program.

Most Iranian companies involved in Venezuela have ties to the IRGC. The Golsan, the vessel which shipped the food for the Etka supermarket, is owned by a firm that delivered fuel to Venezuela and that was sanctioned for transporting items related to Iran’s ballistic-missile and other IRGC programs. Mahan Air, an Iranian company involved in transporting personnel, money and arms to Syria for the IRGC, brought components to refurbish a Venezuelan refinery in exchange for gold. Khatam al-Anbiya, an IRGC conglomerate, provided the engineers.



This entry was posted on Sunday, July 5th, 2020 at 3:55 pm and is filed under Iran, Venezuela.  You can follow any responses to this entry through the RSS 2.0 feed.  You can leave a response, or trackback from your own site. 

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