Trade between Colombia and Venezuela has the great challenge of building trust and legal certainty

After the reopening of the border between Colombia and Venezuela open opportunities for commercial exchange, investment and the possibility of different businesses, for which it is vital to strengthen institutional relations, to strengthen trust and legal certainty so that businessmen of both countries can take advantage of the new moment of binational relationship.

This was one of the main conclusions of the webinar “Window of opportunities with Venezuela: business and regulatory environment of the binational relationship”, organized by the Colombian-American Chamber of Commerce (AmCham Colombia) with AmCham Medellín, with the participation of representatives of the Colombian-Venezuelan Chamber and Araújo Ibarra Consultores.

“Today, there is a desire for openness and a process of recovery, but it is a limited recovery, with inequalities. Although there are interesting opportunities for Colombian products and investments and, at the same time, for Venezuelan products in Colombia, one must be careful and well-informed to determine where these opportunities are and how to compete, “said the president of AmCham Colombia. , Maria Claudia Lacouture.

He added that the Economic recovery what is happening in Venezuela gives rise to hope and that is why he said that although there are signs of freedom of enterprise and respect for private property These are given under a tacit but non-legal connotation, as well as measures of confidence that are not legally established in the legal certainty required by businessmen or investors.

Regarding the expectations of Venezuelan businessmen, Lacouture pointed out that a survey carried out KPMG with the main executive directors of Venezuela, in August 2022, revealed that 93% expect moderate growth over the next three years, 83% say revenue has increased from 2021 and 77% will diversify their supply chain. However, 70% believe financial market volatility will impact them.

In turn, the President of the Colombian-Venezuelan Chamber, Marie-Louise Chiappepointed out that there are various export products with which Colombia has an opportunity and even a lead in the Venezuelan market, but there are also others in which strong competitors appear, such as China, Brazil and the United States.

“Among the most exported products, Colombia is the main supplier of confectionery to Venezuela. In polypropylene, Colombia is also a major player with nearly 70% share, but China is entering the competition and already has a 22% share; in blends of fats and oils, while Colombia holds almost half of the market, Brazil is highly competitive; and in palm oil, Colombia has an almost 80% stake with some competition from the United States,” Chiappe explained.

Regarding investments, the President of the Colombian-Venezuelan Chamber highlighted the advantages of the agreement between Venezuela and Colombia regarding the promotion and protection reciprocal investment, signed on February 4, 2023.

“I think this will greatly facilitate Colombian investments in Venezuela. It is a basis for the return of past investments, but it must be taken into account that it does not apply to investments that were made before the agreement,” Chiappe said.

Specifically, for the Director of Trade Policy and Defense of Araújo Ibarra, Olga Salamancaone of the most important advances in recent months of reopening trade relations with Venezuela is the strengthening of the trade policy instrumentsthrough not only Mutual Investment Protection Agreementbut also the Partial Scope Commercial Agreement No. 28 and the Productive Foreign Investment Act of 2017.

“What we see here is that we already have an important regulatory body which is essential to take into account and continue to deepen the current commitments between Colombia and Venezuela, which we believe are a very important step. important for guarantee legal certainty and clear rules of the game in commercial operations between the two countries”, underlined Salamanca.

In punitive matters, the director of international trade of Araújo Ibarra, Lina Ocampopointed out that since 2015, Venezuela has been subject to the imposition of trade sanctions from different countries, including the United States, which have imposed four sanctions to be taken into account when doing business with Venezuelan businessmen or people.

The first was the economic blockade in all assets and interests of the Government of Venezuela that are in the United States.

“Therefore, they cannot be transferred, paid for, exported, withdrawn or otherwise exchanged. In addition, there has been a freeze on the property and assets of several companies, officials and people linked to the Venezuelan government,” he said. -he explains.

Another sanction is the prohibition for American companies and citizens to have ties to sanctioned companies and individuals.

Likewise, he pointed out that U.S. citizens and people who are in the United States are prohibited from transacting with any digital currency issued by, for or on behalf of the Venezuelan government.