Investors seize one billion from Venezuela in Novobanco

In recent years, nearly a dozen international investors have filed seizure proceedings in Portugal to enforce Venezuela’s accounts at Novobanco, totalling €1 billion, according to data consulted by ECO at the Lisbon court. The cases in question were brought by an oil company, a mining company and vulture funds, among others, who came to the Portuguese capital to try to collect debts and compensation they claim from Venezuela, whose legal disputes exceed €13 billion.

Among those who have requested the seizure of Venezuelan accounts at Novobanco are the American company ConocoPhillips, the Canadian company Gold Reserve and the glass manufacturer Owens-Illinois, which have taken action against Caracas and are seeking compensation for the expropriation of their businesses in Venezuela that took place during the Hugo Chávez era and which international courts have already ruled in their favour.

But the list of “Venezuela’s victims” also includes funds such as Red Tree Investments, Contrarian and Banco San Juan Internacional, which are seeking to recover loans that the Venezuelan regime never repaid.

With these actions, these investors have managed to block the withdrawal of funds that 18 Venezuelan state-owned companies still hold in dozens of accounts at Novobanco (in euros and dollars), despite a Portuguese court ruling in 2023 that the money should be returned to Caracas.

Maduro wanted to take money to Russia

In 2019, when it decided to cut commercial ties with Caracas and close all accounts, the Portuguese bank held around €1.4 billion in accounts held by companies such as PDVSA, Petrocedeño, Petropiar and the Development Bank of Venezuela (Bandes), among others.

At that time, Nicolás Maduro, who has since been captured by American forces and is on trial in New York on several charges, including drug trafficking, and the then self-proclaimed president Juan Guaidó attempted to recover the money from these companies. Maduro wanted to take the money to Russia, Guaidó to New York. But neither attempt was successful.

Novobanco, then led by António Ramalho, decided to place the money in the custody of the court (by way of a deposit) because it had doubts about the legitimate beneficiary of these accounts: whether it was the Maduro faction or the Guaidó faction, which were then vying for power in Caracas — much of the international community, including Portugal, recognised Guaidó.

And so, part of the money went to an account held by the Institute for Financial Management and Justice Equipment (IGFEJ), which manages the financial resources of the Ministry of Justice, with the IGCP, for a total amount of €347 million, while another €612.3 million ended up going to Caixa Geral de Depósitos (CGD) due to the IGJEF system’s inability to receive funds in foreign currency.

Trump may unblock funds

Both Caixa and IGCP (the latter being more resistant due to fears of the consequences of the money being seized) have already returned the funds to Novobanco, as ordered by the court, after the Portuguese government cleared up doubts regarding the legitimate beneficiary of the deposits from Venezuelan state-owned companies.

A note from the chief of staff of Foreign Minister João Gomes Cravinho, dated 19 October 2022, implicitly recognised Maduro’s legitimacy in power in Caracas, considering Guaidó only as a ‘privileged interlocutor of the Venezuelan democratic opposition’.

It was on this basis that, in 2023, the Lisbon District Court ordered the money to be returned to Venezuela. The decision was celebrated in Caracas, but the funds remained frozen in Novobanco, precisely because of the seizures by foreign investors.

However, difficulties in summoning the Venezuelan officials responsible have hindered the execution of the account seizures, but the new political reality, with Donald Trump claiming ascendancy over the Venezuelan regime now led by Delcy Rodriguez, could help speed up the process, according to a source close to one of the enforcement proceedings.