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GAO-23-105668 1 (2023-07-03)

handle is hein.gao/gaoowx0001 and id is 1 raw text is: U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 July 3, 2023 The Honorable James E. Risch Ranking Member Committee on Foreign Relations United States Senate The Honorable Michael T. McCaul Chairman Committee on Foreign Affairs House of Representatives Subject: Venezuela: Illicit Financial Flows and U.S. Efforts to Disrupt Them Much of Venezuela is ungoverned, undergoverned, or ill governed, according to the Department of State. In 2019, the U.S. ceased to recognize Nicoles Maduro as Venezuela's president and suspended embassy operations in Venezuela, according to State. U.S. agencies have indicated that the illegitimate Maduro regime allows and tolerates the use of its territory by transnational criminal organizations (TCO), including U.S.-designated foreign terrorist organizations, for drug trafficking and other criminal enterprises. According to the 2022 Caribbean Border Counternarcotics Strategy, the ongoing political instability in Venezuela provides a permissive smuggling environment for TCOs, and Venezuela's corrupt political and security infrastructure enables officials to participate in, and profit from, these illicit activities. TCOs have used Venezuela's permissive environment to generate income. Corrupt Venezuelans have used their positions for illegitimate income. Furthermore, between 2017 and 2022, State has consistently determined that Venezuela is a major money laundering country. State and the Department of the Treasury have reported that Venezuela is susceptible to illicit financial activity, including money laundering and public corruption. You asked us to review transnational organized crime related to Venezuela. In February 2023, we briefed congressional committees on Venezuela's regional influence.1 We described how corruption at various levels within Venezuela had enabled transnational crime, such as the trafficking of drugs, gold, arms, and persons. We also described how crime in Venezuela had undermined regional security and contributed to the humanitarian crisis. In May 2023, we reported on (1) how Colombian cocaine is trafficked through Venezuela destined for the U.S., Europe, and Africa; (2) how the permissive environment in Venezuela allows corrupt individuals to collaborate with drug traffickers; and (3) how the situation in Venezuela undermines U.S. counternarcotics goals in Colombia.2 In May 2023, we reported on (1) the main TCOs in Venezuela and their activities; (2) links between those TCOs, the Maduro regime, and 1GAO, Venezuela: Corruption and Dysfunction Have Enabled Transnational Crime, Which Has Exacerbated a Regional Crisis, oral briefing (Washington, DC: Feb. 6, 2023). 2GAO, VENEZUELA: The Maduro Regime's Permissive Drug Trafficking Environment Hinders U.S.-Colombia Counternarcotics Efforts, GAO-23-105878SU (Washington, DC: May 3, 2023). The Department of State determined that this report contained SENSITIVE BUT UNCLASSIFIED information and therefore cannot be released to the public. GAO-23-105668 Venezuela: Illicit Financial Flows Page 1

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