New York - Citigroup Inc blocked an attempt by Venezuelan state oil company PDVSA to make debt payments to a Siemens Unit, a Citi executive testified in a U.S. trial over whether PDVSA is liable for the payments on Wednesday.
In a federal trial that began on Tuesday in Manhattan federal court, PDVSA is contending that U.S. sanctions implemented in August 2017 rendered payment impossible.
In the background of Citi’s chief administration officer in Latin America, Raymond Romano testified that PDVSA blocked Citi's wire attempt because it did not meet our requirements for processing. The case shows how the sanctions - intended to pressure Venezuelan President Nicolas Maduro to restore democracy - have had far-reaching consequences for Western companies that do business with PDVSA.
Maduro blames the sanctions on corruption and declares that they have led to the economic crisis in the country.
In a Sept. 25, 2017 email presented as evidence, a Citi employee told Dresser-Rand that the bank restricted the Vélare and PDVSA activities because of sanctions, but that it would consider processing pre-approved transactions.
Dresser-Rand said Romano did not seek preapproval.
In testimony that could bolster Dresser-Rand's argument that PDVSA had other ways to make payment, he said that Citi introduced PDVSA-related restrictions before the August 2017 sanctions based on its own internal risk policies.
Dresser-Rand, who was called as an expert witness by Stephanie Rice in various banks, said the payment was not in violation of sanctions and other banks could have processed it.