Maltese company in illicit Venezuelan oil trading network gets US sanction

A Maltese company has been sanctioned by the US treasury for allegedly attempting to evade existing sanctions on Venezuela’s oil sector.

On January 19, the US Office of Foreign Assets Control (OFAC) designated three individuals, fourteen entities, and six vessels to the US sanctions list, building upon a previous designation targeting a separate Mexico-based company called Libre Abordo.

Among the entities sanctioned is the Malta-registered company Elemento Ltd, which has operated in the global oil sector since, at least, 2017.

Elemento has little connection to Malta except for its registered company address, which they currently share with GVZH Advocates.

The primary allegation here is that Elemento purchased Venezuelan oil from the state-owned Petroleos de Venezuela (PdVSA) and resold it to third-party customers, but this was denied by the company in 2020 after news leaked that the FBI launched a probe into Elemento and several companies.

On behalf of Elemento, international law firm Holman, Fenwick & Willan told Reuters that “our client does not currently trade oil of Venezuela origin or sell fuel to PdVSA”.

However, a UK court judgement from the same year shows that Alessandro Bazzoni, an ex-director of Elemento (registered as such with the MBR) said that Elemento had purchased many cargos from PdVSA, and that Bazzoni had a pre-existing business relationship with the state company.

This lawsuit saw Elemento being sued by Tansy Shiptrade Inc., a company incorporated in the Marshall Islands. The judgement deals with an application by Elemento for the sale of crude oil cargo from Venezuela, which was subject to an injunction granted by a separate judge.

It was subsequently refused because the judge was not satisfied that the terms of the proposed sale contract will ensure that the proceeds from the cargo sale will be paid into the escrow bank account.

The earlier-mentioned Alessandro Bazzoni was also sanctioned by the US last January. The US Treasury described him as a “core facilitator” of the sanction-evading network, and said that he was instrumental in coordinating purchases and sales of the Venezuelan crude oil.

This lines up with the UK judgement, which detailed his business relationship with PdVSA.

With Bazzoni, another ex-director of Elemento is facing sanctions. Francisco D’Agostino, a Spanish national residing in Venezuela, was designated for helping Bazzoni coordinating the selling of Venezuelan oil and having partnered with him on several business ventures with PdVSA.

D’Agostino is no stranger to scandal – he was one of three Venezuelan businessmen in New York sued by a former US ambassador to Venezuela. Otto Reich, the ambassador in question, alleged that all three defendants amassed enormous fortunes by securing lucrative energy-industry contracts in Venezuela for their US-based companies, namely Derwick Associates.

Back in February 2017, Elemento had been acquired by CISA Holdings Ltd, another Maltese company set up in December 2016.

Various court statements by three ex-directors of Elemento, namely Bazzoni, Richard Rothenberg, and Carlos Galindez, show that CISA Holdings is beneficially owned via a chain of intermediate companies and a Panamanian foundation, by wealthy Venezuelan businessman Ricardo Cisneros, hailing from the wealth Cisneros family that own a wide-ranging group of companies in digital media and property investment, among other sectors.

At present, both Elemento and CISA Holdings are owned by John Sidney Merton Beckwith-Smith. He was appointed as director, shareholder, legal representative and company secretary on 26 October last year following the resignation of Richard Rothenberg on that same day.