In recent months, some major Spanish newspapers have reported that the subsidiaries of Spanish companies operating in Venezuela have accumulated exposures of at least €8bn. One of the main problems faced by Spanish companies in Venezuela is the exchange control policy of the Venezuelan government. Today in Venezuela there are three rates of exchange of the national currency (the Bolivar) against the US dollar. According to press reports, because of Venezuela’s foreign exchange control policy, Iberia has retained over €184m from ticket sales which it cannot repatriate to Spain because it cannot gain access to an appropriate exchange rate. Meanwhile, it is estimated that Air Europa has profits of at least €85m and BBVA has $500m in accumulated dividends in Venezuela which they cannot repatriate to Spain. Furthermore, it was reported as a relevant fact to the Spanish stock exchange that Venezuela’s monetary policy caused a drop of €399m in Telefonica’s net profit in 2014. Some of the other 110 Spanish companies operating in Venezuela that could experience similar problems are Repsol, Mapfre, Meliá or Duro Felguera. Although there are no specific statistics available, foreign investors from other countries may also be in the same position.

Solution under Bilateral Investment Treaties

States frequently sign international treaties in order to encourage and promote reciprocal investments between both countries (commonly known as Bilateral Investment Treaties or BITs). Such treaties usually include substantive protections for foreign investors, including clauses providing for fair and equitable treatment, full protection and security, compensation for expropriation, etc. Of particular relevance are the provisions in many BITs allowing the repatriation of the investment and any returns arising from such investment to the country of origin.

Jan-Mar 2016 issue

B. Cremades & Asociados