Tuesday, May 06, 2008

Merchant accounts provide new way to get dollars

While most of the world economy is fleeing from the dollar to the euro and other economies, Venezuelans are opening credit card merchant accounts with banks in Panama and the Netherland Antilles to provide dollars to other Venezuelan nationals and making up to 20% in fees for that.

Venezuelans taking circuitous route to get dollars

WILLEMSTAD, Curaçao: Stroll down Columbustraat. Enter the smoke-filled lobby of the San Marco Hotel Casino. Proceed up one flight of stairs to the front desk. Dial room 106. Bring a credit card issued in Venezuela.

In a desperate quest to get their hands on American dollars, Venezuelans are flocking to this island in the Netherlands Antilles to take part in this elaborate backroom scheme and dozens of others like it to get around currency controls imposed by the government of President Hugo Chávez....

Trying to slow capital flight, Venezuela limits its citizens to $5,000 in annual credit card purchases abroad. That is 10,750 bolivars, at the official exchange rate of 2.15 to the dollar. But at the prevailing black-market rate of 4.5 to the dollar, the amount more than doubles to 22,500 bolivars.

Seizing on that gap, some Venezuelans began coming to Curaçao's casinos last year and using their credit cards to buy chips. They then played a few hands and cashed in the chips for dollars, which circulate here along with guilders. But the casinos soon prohibited them from buying chips with their cards, because so few of the people were actually using the chips to gamble.

Middlemen then moved in, organizing trips for Venezuelans and charging a 20 percent commission for cash advances at the office of a merchant, like the travel agency in Room 106 of the San Marco Hotel. The middleman and merchant divide the $1,000 commission, leaving the Venezuelan with $4,000 in cash.

With a wink and a nod from local banks that process the transactions, the middlemen dummy up receipts, often for expensive electronic items, offering the travelers an alibi in case they are audited by back in Venezuela by bureaucrats loyal to Chávez.

Full text in http://www.iht.com/articles/2008/03/12/america/journal.php?page=1

Willemstad Journal

Island’s Treasure, the Dollar, Lures Venezuelans

Published: March 13, 2008

...Some Venezuelans hold the dollars as a hedge against economic uncertainty, while others exchange them back in Venezuela for bolívars at the black-market rate, for a profit. The merchants get hefty commissions for swiping credit cards.

And in an illustration of where some of Venezuela’s oil wealth is going, some middlemen have accumulated fortunes. “I made $300,000 in December alone,” said Roberto, 31, a middleman who would not give his full name out of concern of being identified as a profiteer.

Full text in http://www.nytimes.com/2008/03/13/world/americas/13curacao.html

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