3 October 2024 –
A new report by Transparencia Venezuela and Iniciativa para la Recuperación de los Activos Venezolanos (INRAV) finds that Venezuela has legal provisions for the prevention of corruption and asset recovery (Chapters II and V of the UNCAC) but that there is practically no implementation in practice. A captured state with systemic corruption, a politically infiltrated judiciary, and highly opaque institutions significantly hinder advances in the fight against corruption. The report is intended as a contribution to the UNCAC implementation review process in its second cycle, produced with technical and financial support from the UNCAC Coalition.
There is a lack of information across all areas related to the prevention of corruption in Venezuela. The activities, budget, website and location of the National Anti-Corruption Body are unknown to the public, as is information on campaign financing, asset declarations, the names of most directors of state-owned enterprises, the national budget, as well as the National Register of Contractors – and with it all information on public tenders. There are no known or published recruitment calls to enter the public administration or the judiciary, and the salary scale of public officials is unknown.
The highest government authorities have been involved in numerous cases of nepotism, and despite a constitutional prohibition to do so, public funds are regularly used for political campaign financing. This caused an international outcry of fraud following the Presidential elections in late July 2024. The irregular appointment and dismissal of Supreme Court of Justice magistrates and their proven loyalty to the President point to a strongly co-opted judicial system. The 2021 Access to Information Law excludes active transparency and sanctions for non-compliance and has failed to establish a guarantor body, making it practically unusable. The intimidation of civil society and persons who report corruption in Venezuela has people fearing for their lives.
Legally and structurally, Venezuela has regulations and institutions that allow for the tracing and following of illicit money, the seizure of assets related to corruption crimes, and international cooperation. However, there is a lack of initiative by the State to investigate such crimes, respond to foreign requests for mutual legal assistance and few sanctions are imposed for non-compliance with anti-money laundering regulations. The 2023 Organic Law of Asset Forfeiture allows for non-conviction-based forfeiture as well, but its application so far has been controversial due to its limited use and the temporary assignment of its application to existing prosecutor’s offices and courts not specialized in the matter, even though the Law ordered the creation of specialized prosecutor’s offices and courts.
The official second cycle UNCAC review process in Venezuela was scheduled for 2019, and the country visit was held virtually in June 2021. As of June 2023, the executive summary was adopted and is available on Venezuela’s UNODC Country Profile page, but neither the self-assessment checklist nor the full country report have been published online. Civil society was not included in the review.
For all the detailed findings, read the full civil society parallel report in Spanish. A translated English version of the report is also available.
Main Findings
Preventive anti-corruption body or bodies
The Anti-Corruption Law of 2014 established the National Anti-Corruption Body in Venezuela, which is in charge of prevention, analysis, intelligence-gathering, and corruption investigations. This body reports hierarchically to the President of the Republic. Since 2015, there has been no official information available on the budget allocated to this body, its operational plans or management reports. The body does not have a website, nor is its physical headquarters from which it operates known. The law does not establish the selection criteria for the appointment of the highest positions of the agency.
From 2018 to 2023, the Office of the Comptroller General of the Republic, the body in charge of the control, oversight and auditing of public revenues, expenditures and assets, was headed by a former deputy of the governing party. Since 2018, there has been no publicly available information on audits carried out in the contracting of strategic companies such as PDVSA, the state-owned Venezuelan petroleum company. Similarly, this office has not published its management reports for 2018, 2020, 2022 and 2023, nor the list of sanctions of public servants, and it does not respond to requests for information.
Public sector employment
There are no known or published examinations to enter the public administration as a civil servant. Asset declarations, civil servants’ curricula, and the names of 80% of the directors and Boards of Directors of the 940 State-Owned Enterprises are also not published anywhere. The salary scale of public officials is unknown. Less than 1% of asset declarations are checked by the Office of the Comptroller General of the Republic every year.
The highest government authorities have been involved in numerous cases of nepotism (see here and here) and other conflicts of interest. In interviews carried out by Transparencia Venezuela with employees of public companies in 2020, they highlighted that in view of the low salaries, the irregular management of funds and illicit payments are the practices that help them survive.
Political financing
The legal framework does not foresee a limit on campaign expenditures. While the law on political financing provides for the publication of information on campaign financing, this information is not publicly available. Despite the constitutional prohibition of financing political campaigns with public funds of associations with political purposes, Transparencia Venezuela has denounced the use of public resources of all kinds in campaigns since 2006, and since 2015, the organization has registered a significant number of complaints of improper use of public resources in campaign events of the governing party.
Codes of Conduct, Conflicts of Interest and Asset Declaration
Ministers exercise control functions over some assigned entities while heading those entities. There is no obligation to declare conflicts of interest or to publish asset declarations, and there are no sanctions for non-compliance. The Office of the Comptroller General of the Republic has issued administrative sanctions for the lack of presentation of the asset declarations or inconsistencies in declarations, which have served as grounds to prevent officials from running for elected office, despite the fact that the National Constitution establishes that disqualifications from the exercise of public office only apply if there has been a final criminal sentence.
Reporting Mechanisms and Whistleblower Protection
Persons who report corruption in Venezuela have been subjected to attacks, threats, detentions and torture. Transparencia Venezuela has received complaints of non-compliance with the Law for the Protection of Victims, Witnesses and other Procedural Subjects. In many cases where protection measures are requested for whistleblowers, they are not granted. In others, protection measures are issued by the jurisdictional bodies but are not executed by the authorities in charge.
Public procurement
Since 2001, the Public Procurement Law has undergone reforms that increased the reasons for exclusion from public tenders, competitions and other forms of open contracting. Procedures for tendering and awarding of contracts, tracking their implementation, and monitoring are not published. In August 2017, access to the website of the National Register of Contractors was shut down, so citizens have no information on companies contracting with the State. From 2016 until 2021, the Executive decreed several states of emergency under false pretense in order to take advantage of the consequential more flexible contracting processes. There have been numerous cases of grand corruption linked to direct awards.
Management of public finances
Since 2010, no public entity has published its budget execution and the great majority stopped publishing its financial management report since 2016. Neither surplus nor fiscal deficit data have been disclosed since 2010. No information is provided on the amount of gold received or sold by the Central Bank of Venezuela, external debt, internal debt, export and import indicators, among others. The State has not published the National Budget Law since 2017, and since 2022, additional credits and other budget modifications have not been published either. The list of State-Owned Enterprises is not public, nor are their directors, and requests for access to information are not responded to.
Access to information and the participation of society
On September 17, 2021, the National Assembly approved the Law of Transparency and Access to Information of Public Interest. The Law does not include active transparency and limits access to public information to what is necessary “for the active participation of the people in the design, formulation, and monitoring of public management.”. The law does not establish a body to guarantee access to information, maximum periods of confidentiality of information, or sanctions for officials who deny access to information.
Several organizations have reported an increase in arbitrary detentions of human rights defenders, trade unionists and journalists, who are not allowed to appoint private legal counsel. After the presidential elections of July 28, 2024, at least three human rights defenders were arbitrarily detained. In the last few years, the discussion of laws and regulations to limit the operation of non-governmental organizations has begun, and organizations and political parties have intervened.
Judiciary
There is no judicial independence in Venezuela due to the non-transparent and irregular appointment of Supreme Court of Justice magistrates, an overwhelming percentage of which belong to or have direct links with the government party. Other reasons for the lack of judicial independence include a lack of public competitive examinations to enter the judiciary, the provisional nature of more than 80% of the judges and justice operators, the removal of persons in provisional positions without guarantees of due process, the opacity in the administration of justice and the sentences that transgress rights and guarantees.
Private sector transparency
Basic information on the date of creation, purpose, nature, shareholders or directors, address, and assets of a private company or organization is not accessible electronically. No penalties are known to have been imposed for failure to keep the beneficial ownership information up to date. Information on contracts between private companies with public entities is not published.
Anti-money laundering
Legally and structurally, Venezuela has regulations and institutions that allow for the tracing and following of illicit money. However, the lack of independence of the public authorities and the lack of initiative of the Public Prosecutor’s Office to investigate alleged corruption crimes reported in instances and jurisdictions of other States point to a lack of interest of the Venezuelan State in the prosecution of these cases, in the tracing of assets that may be found in the Republic and their subsequent confiscation.
International Cooperation for the purposes of confiscation
Legally, Venezuela has several regulations that facilitate mutual legal assistance, and the State indicated over 300 requests that were registered in 2016 in a report on Resolution 6/2 to Identify Best Practices in Asset Recovery submitted to UNODC in August 2017. In practice, however, as indicated in an interview with a former official of a relevant public institution, the Directorate of International Affairs of the Public Prosecutor’s Office does not respond to requests for assistance from foreign States despite these national and international legal instruments being in force in Venezuela.
Asset recovery
The legal framework in Venezuela allows for the preventative seizure of assets suspected to be related to a crime and the freezing of bank accounts. According to Article 271 of the Constitution, a judicial decision is required to confiscate assets related to crimes against public patrimony or drug trafficking.
In 2023, the Organic Law of Asset Forfeiture was approved to establish a mechanism to allow for the identification, location, and recovery of assets originating from and destined for illicit activities, as well as for non-conviction based forfeiture by means of a judgment, without any compensation whatsoever. Its application so far has been controversial due to its limited use and the temporary assignment of these powers to existing prosecutor’s offices and courts that are not specialized in the matter, even though the Law ordered the creation of specialized prosecutor’s offices and courts. According to an expert in the field of asset recovery who was interviewed for this report in May 2024, only one claim for asset forfeiture has been processed based on the Organic Law on Asset Forfeiture, for which a lawsuit was filed at the end of 2023 in the courts of asset forfeiture and which is ready for a trial hearing.
Key recommendations
In its report, Transparencia Venezuela and INRAV make several recommendations to the authorities to ensure the full implementation of the UNCAC in Venezuela, among them:
- Approve an Law of Transparency and Access to Information, which complies with the standards of the model law of the Organization of American States (OAS), with minimum exceptions, maximum publicity, an independent guarantor body, and with enforcement and sanctioning capacity.
- Implement transparency and accountability in the public administration and the oversight and justice system, especially in relation to the public budget, public contracting, public employment, electoral financing and anti-corruption plans.
- Guarantee the right to freedom of expression, in accordance with international standards.
- Reform the Anti-Corruption Law to create an anti-corruption body with the necessary capacity and powers to prevent and investigate cases of grand corruption and include rules that require establishing systems and sanctions to reduce conflicts of interest, especially nepotism.
- Ensure and protect the full autonomy, independence, and impartiality of the Judiciary, the Public Prosecutor’s Office, and the judicial investigation bodies, guaranteeing the free exercise of their functions without being subjected to any undue pressure or interference by the Executive or Legislative Branches; to guarantee that allegations of corruption are investigated in an exhaustive, independent and impartial manner and that the victims receive full reparation.
- Repeal or refrain from adopting any measure or law that may limit the exercise of the right to freedom of association or result in undue control over civil society organizations or interference in their activities.
- Guarantee the autonomy and independence of the institutions responsible for supervision and monitoring of risk capital so that they can fulfill their role in preventing money and asset laundering.
- Establish specific and clear rules in the domestic legal system that establish the possibility for the direct legal recovery of assets in both in rem actions and actions of a criminal nature.
- Establish different forfeiture tools in the Anti-Corruption Law, such as those established in the different laws mentioned in this report (preventive seizure, freezing of accounts, etc.).
- Include civil society organizations in extraterritorial processes to promote speed, follow-up between multilateral and bilateral agreements, and promote transparency in the mobilization of goods.
- Strengthen the capacities of judges and prosecutors in the application of the Organic Law on Asset Forfeiture and guarantee the autonomy and independence of their actions.