Chemron Corp. submitted tax declarations totaling approximately $300 million to the Venezuelan government in 2023, raising scrutiny regarding the benefits to President Nicolás Maduro's administration amid ongoing U.S. sanctions.
Documents indicate that Chevron's Venezuelan subsidiary, Chevron Global Technology Services Company, reported a tax liability of 8.1 billion bolivars to the country's tax authority, Seniat, in March 2024. These filings pertain to Chevron's joint ventures with Venezuela's state-owned oil firm, PDVSA, and have prompted questions about compliance with U.S. sanctions.
Chevron spokesperson Bill Turenne stated, 'Chevron conducts its business in Venezuela in compliance with all applicable laws and regulations.'
The filings show that Chevron's joint venture, Petropiar, declared $217 million in income tax for 2023, while Petroboscan reported $83 million, based on an average exchange rate of 27 bolivars per dollar. Chevron holds minority stakes in four joint ventures with PDVSA, required to pay a third of production in royalties and other taxes under Venezuelan hydrocarbon laws.
However, these payments may conflict with Chevron's sanctions exemption under the U.S. Treasury's Office of Foreign Assets Control (OFAC). General License 41 prohibits the company from paying taxes, royalties, or dividends to PDVSA or any state-controlled entity, and restricts the sale of Venezuelan oil outside the U.S.
The situation could gain further attention as President-elect Donald Trump is expected to adopt a stricter approach toward Maduro's regime. The Biden administration had eased restrictions on Chevron's Venezuelan operations in 2022 following Maduro's agreement to engage in talks about democratic elections, amid rising inflation driven by high oil prices.
Secretary of State nominee Marco Rubio remarked, 'Companies like Chevron are bringing billions of dollars into the regime's coffers, and the regime has not fulfilled any of the promises it made. All of that needs to be reexamined.'
As Chevron's operations in Venezuela are scrutinized, the company's adherence to U.S. sanctions and its financial contributions to the Maduro government are likely to face renewed examination in the upcoming months.
Chevron's tax filings in Venezuela illustrate the intricate relationship between global corporations, international sanctions, and local governance. While the $300 million in tax declarations indicates compliance with Venezuelan regulations, it raises critical questions regarding the extent of benefits to the Maduro administration amid U.S. sanctions. This scenario highlights the challenges multinational corporations encounter while navigating politically sensitive environments, balancing legal obligations with ethical considerations and geopolitical pressures.