New York Fed arms up against Puerto Rican banks after Venezuela sanction

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New York Fed arms up against Puerto Rican banks after Venezuela sanction

On Friday, the 19th of April 2019, there had been a recent development on US sanctions over Venezuela, as the Federal Reserve of New York had been planning to take severe actions over the $50 billion offshore banking industry of Puerto Rico, most of which were owned by Venezuelan, four spokesmen with knowledge regarding the subject matter told.

Besides, an internal document seen by a press agency had also revealed that the New York Fed had been pointing its gun barrels towards Puerto Rican banks to prevent extraterritorial banks of the island, a majority of which are owned by Venezuelans as beforementioned.

According to the sources, the actions were aimed at overseas banks of Puerto Rico to prevent them from opening accounts, which could proffer the account holders direct access to Federal Reserve. Given the islands territorial authority under the government of Unites States, accounts of offshore banks of Puerto Rico could have direct access to Fed.

However, the recent attempt would be disabling a critical competitive advantage for United States, as the offshore banking system of Puerto Rico had been enabling offshore banks to avert expensive banking jurisdictions, likes of which could have still been seen over Britain owned Virgin Island.

Nevertheless, in an unreported letter sent on February 27th, a month after inclining sanction on Venezuelan crude oil, was quoted saying that the New York Fed had stopped approving new accounts for offshore banks of Puerto Rico alongside other financial institutions.

Addressing to Fed’s concern over expanding its sanction on Venezuelan financial system, followed by the reveal of the report, the Vice-President of the Washington-based Financial Integrity Network, David Murray, a former Treasury Department official, said, “The Fed is concerned about its exposure to reputation, just like any other person”.