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Mastercard halts service at 2 Venezuelan banks in sanctions

September 5, 2019

CARACAS, Venezuela (AP) — U.S.-based Mastercard has suspended its services to two Venezuelan banks under sanctions aimed at forcing President Nicolás Maduro from power in the crisis-stricken South American nation, the banks said.

Limiting business with the relatively small financial institutions in Venezuela could foreshadow broader obstacles to come in a country beset by hyperinflation where credit cards reign amid a scarcity of cash.

The Bank of the Bolivarian National Armed Forces blasted Mastercard’s move on Twitter Wednesday. It comes roughly six months ahead of a timeline when it must curtail business under U.S. sanction rules.

“These interventionist and arbitrary measures are out of all legal boundaries and violate our clients’ human rights,” the armed forces’ bank said.

Tensions between Venezuela and the United States rose in January when the Trump administration was first among more than 50 nations to publicly back Venezuelan opposition leader Juan Guaidó’s campaign to oust Maduro.

The countries backing Guaidó say Maduro’s government rigged the election that extended his power despite a historic economic crash that drove mass migration from the once-wealthy oil nation. Maduro remains in power with backing from the military and international support from countries such as Cuba, Russia and China.

To exert pressure, the U.S. has personally sanctioned Maduro and dozens of his political allies. It has also hit Venezuela’s state-run oil firm PDVSA with economic measures aimed at cutting off the government from billions annually.

The latest round of broad economic measures the Trump administration announced Aug. 5 immediately blocked companies and individuals from doing business with socialist Maduro.

However, Mastercard, Visa and American Express are among financial institutions that the U.S. Treasury Department has given until March 2020 to curtail doing business in Venezuela.

The second Venezuelan bank being affected is the Agricultural Bank of Venezuela. Mastercard did not immediately respond Thursday to a request for comment by The Associated Press.

The Bank of the Bolivarian National Armed Forces underscored that Mastercard has “suspended” and “not terminated” its agreements with the two Venezuelan banks, leaving open a possibility that the terms could be reached to resume normal activities.

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