A US Federal Court asks declare moratorium on Venezuela

The Federal Court of the District of Columbia (Washington, USA) introduced an application for declaration of default against Venezuela, once the deadline expired for the South American country to respond to a lawsuit filed by Gold Reserve Inc., in connection with a judgment of the International Centre for Settlement of Investment Disputes (ICSID) which requires the Venezuelan government to provide US $ 740 million to the company as a result of an expropriation of its activities in 2008. +

The country's defense, meanwhile, filed an application before the same court to request its cancellation after that 60 days prior established by the court to submit its arguments Venezuela, no document was recorded. Gold Reserve, in turn, submitted its counterclaims on March 30, and the court will decide "in the near future," he said. +

Gold projects in Venezuela were nationalized, leaving investors in limbo ( Las Armas de Coronel )

The lawsuit against Venezuela was introduced by Gold Reserve on November 26, 2014 and during any of the processes of it I heard from legal representatives of the country, says the news portal Business Wire , and ruled that as of March 27 the country is in default with Gold Reserve. +

Doug Belanger, president of Gold Reserve, said that this "is another example of the delay of Venezuela in its actions relating to pay compensation for expropriation (...) the company will continue to seek such compensation systematically and methodically until Venezuela understand that must stop evading its international commitments and pay us later or earlier ". +

In 1992, the company acquired and began to develop what is now known as the Brisas Project, a gold and copper mine in the historic "kilometer 88" south of the South American country; according to Gold Reserve, the mine contains 10 million ounces of gold (about 4 million kilograms) and 1.4 billion (600 million kilos) ounces of copper. +

In 2008, when the project was developed, the Venezuelan government "arbitrarily revoked our concession," Gold Reserve after investing about $ 300 million. The company filed a complaint before the ICSID and in September 2014 obtained the mandate of compensation, which was ratified after the allegations against the Venezuelan government, in December last year. +

How to Venezuela?

The expropriation policy of the country during the government of Hugo Chavez, especially in the period between 2007 and 2013, has begun to reverse massive judgments of international arbitration tribunal, to which the country belonged, just at the time when the successor Chavez, Nicolas Maduro, faces an acute economic crisis by falling oil prices. +

Against Venezuela accumulate 27 claims in the ICSID, being the country with the most cases pending in this court; have been resolved five of them, involving a total payment, until now, of $ 2.12 billion. +

After paying Exxon Mobil $ 747 million, the country still owes $ 853 million; is the amount you are already owes Gold Reserve; Chilean company IDC has to voiding $ 33 million related to the abrupt termination of grant operating Margarita Island airport (in the Venezuelan Caribbean); the American bottling Owens Illinois, which Chavez nationalized its operations in its Sunday television program, $ 454 million; and oil services company Tidewater (decision already ratified), $ 46 million. +

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But insofar as they leave more demands, the amount may become simply unaffordable for Venezuela. Conoco Phillips, US oil company, filed a lawsuit for $ 31 billion, in connection with the nationalization of two projects to produce crude in the Orinoco Oil Belt (now renamed " Orinoco Oil Belt Hugo Chavez "); Rusoro , gold company Russian, filed a $ 3.3 billion; the Techint Group (Argentina), introduced another for the nationalization of a service company in the steel sector; it is estimated, conservatively, that the cost can assume Venezuela for its policy of nationalization, even with cuts to the defendant and further negotiations may reach $ 20 billion. +

Although in 2012 Venezuela told the World Bank its withdrawal from ICSID, demands that arise with prior to that retirement date continue studying at the institution. +

The deputy attorney (defender) of the Venezuelan State, Reinaldo Muñoz, said official media in his country that ICSID rulings "seek to present Venezuela as an insolvent state with many outstanding debts"; and that "these trials are accelerated to give that feeling of broken state, which has many debts". +

The truth is that not only before the ICSID creditors accumulate at the gates of Venezuela. +

Although the country was able to successfully cancel their bookings in the first quarter with international creditors, owed ​​to private companies, both local and international, more than $ 13 billion , which has, for example, that the food supply is restricted to maximum and medicines, which has Venezuelans queuing in front of the shops; the airlines are owed ​​almost $ 3,500 million, which airfare within the country can only be canceled in price in dollars; and debt to China is nearly $ 50 billion. +

The total debt is about $ 125 billion, but there is not taken into account the debt incurred by state PDVSA, which is about $ 50 billion more. +

The needs of the country this year, only to honor these commitments are $ 25 billion. "The government has a cash deficit that can not afford, and will gain time, with challenges to judgments and other payment delays," said economist Asdrubal Oliveros. +