Americas Brief newsletter: 16-22 January 2019
The latest Americas Brief newsletter analyses a terror attack in Colombia's capital, anti-government protests in Venezuela, and new policy developments in the Brazil of President Jair Bolsonaro.United States & Canada
- United States � Teachers� strike in Los Angeles continues
- United States & China � U.S. �investigating Huawei for stealing trade secrets�
- Guatemala � Six injured in IED explosion on bus in capital
- Mexico � U.S. warns citizens after attacks on police in Chihuahua State
- Mexico & United States � Migrant caravan likely to heighten border security
- Brazil � Minister plays down Muslim boycott fears over embassy decision
- Brazil � Minister says U.S. tourists will no longer require visas
- Colombia � Helicopter shot down by ELN guerrilla group, crew kidnapped
- Colombia � Twenty killed in car bombing at police academy in capital
- Venezuela � Anti-government protests in major urban areas tomorrow
United States & Canada
United States � Teachers� strike in Los Angeles continues UNITED STATES � Travel risk: Medium
18 January: At 1030 local time, thousands of teachers converged on Los Angeles� Grand Park, near City Hall, for another round of demonstrations, following industrial action which began on 10 January. On 17 January, the United Teachers Los Angeles union and Los Angeles Unified School District officials met in a bid to break the impasse over wage and work conditions, but the negotiations failed. As a result, the union mobilised members for another round of protests.
Why it matters: This strike has a strong likelihood of extending into this week as negotiating parties have not come near an agreement. Teachers are asking for more pay, increased staff numbers and reduced class sizes, which the authorities are unlikely to offer in the short term. Businesses should evaluate the impact of the strike on staff and consider allowing employees to work from home.
United States & China � U.S. �investigating Huawei for stealing trade secrets� UNITED STATES � Political risk: Low CHINA � Political risk: Medium
16 January: The U.S. is investigating Chinese telecoms giant Huawei for allegedly stealing trade secrets from American businesses, according to a report in The Wall Street Journal newspaper on 16 January. The criminal inquiry is reported to have stemmed from a 2014 U.S. lawsuit brought by the German-headquartered telecoms company T-Mobile, which accused Huawei of stealing robot phone testing technology. In 2017, a U.S. jury agreed that Huawei had misappropriated trade secrets, but said that its actions were not �wilful and malicious�. Huawei and the U.S. Department of Justice declined to comment on the report.
Why it matters: If a probe is taking place, this would add further pressure to Huawei, which has recently faced bans and accusations in multiple countries over concerns that its equipment could be used by the Chinese government for espionage. Huawei denies these claims. Relations are particularly fraught with the U.S. following the arrest in December of Huawei�s chief financial officer in Canada. She may be extradited to the U.S. to stand trial on allegations of fraud over Iran sanctions. Following this latest development, U.S. companies operating in China should review operational and security procedures to factor in possible reprisals. These could include delays in processing shipments or granting licences. Businesses using telecommunications equipment supplied by Chinese companies should review whether this could prejudice their chances of winning tenders issued by Western governments.
Mexico, Central America & Caribbean
Guatemala � Six injured in IED explosion on bus in capital GUATEMALA � Travel risk: High
21 January: Six people were injured when an improvised explosive device (IED) detonated aboard a bus on 9th avenue, in Zone 7 of the capital, Guatemala City. Interior minister Enrique Degenhart said that a female member of a criminal gang had brought the IED onto the bus in an attempt to extort money from the driver when it accidentally exploded. According to media reports, the 19-year-old woman lost her arms in the blast.
Why it matters: An estimated 54,000 gang members operate in the Northern Triangle countries of Guatemala, El Salvador and Honduras in Central America. Extortion is a main income source for gangs, who target transportation companies and bus drivers, among others, demanding high initial protection fees followed by monthly payments. In March 2016, two people were killed when an IED exploded in a bus in San Jos� Pinula, 12km from the capital. In 2011, eight people were killed when an IED detonated on a bus on the San Juan road in the capital. These incidents were linked to extortion attempts by criminal gangs. Business personnel should avoid using public buses and if travelling by road in private transport keep a safe distance from buses.
Mexico � U.S. warns citizens after attacks on police in Chihuahua State MEXICO � Security risk: Elevated
21 January: The U.S. Department of State's Overseas Security Advisory Council issued a travel warning to U.S. citizens, following a series of connected attacks against police officers in the cities of Ciudad Ju�rez and Chihuahua, in the northern state of Chihuahua, which began on 17 January. Six officers were injured in six attacks on 17 January in the two cities. The attackers also set fire to a public bus during the attacks. U.S. authorities believe that Mexican organised criminal groups, thought to be the La Linea and Los Mexicles gangs, are behind these incidents, and that the attacks are set to continue.
Why it matters: Individuals in both cities are advised to avoid police stations and other law enforcement facilities in the one-week outlook due to the threat of violence. A2 Global advises business travellers who find themselves in emergency situations to call the police rather than visit a police station in the one-week outlook. Non-essential travel to Ciudad Ju�rez and Chihuahua should be avoided due to the heightened security risk.
Mexico & United States � Migrant caravan likely to heighten border security MEXICO � Security risk: Elevated UNITED STATES � Security risk: Medium
15 January: A new migrant caravan of approximately 800 people set off from the Honduran city of San Pedro Sula towards the United States� southern border. The group, which will likely grow as it passes through Guatemala towards Mexico and the U.S., is fleeing poverty and violence in the Northern Triangle region, which comprises El Salvador, Guatemala and Honduras. Why it matters: While the caravan is approximately 1,000km south of the U.S.�s southern border, there is a high likelihood that border security will be increased in the one-month outlook, as occurred with the previous migrant caravan. Firms which move goods across the Guatemala-Mexico and Mexico-U.S. borders should monitor media reports on the progress of the caravan, develop contingency planning in case borders are temporarily shut, and anticipate possible delays and heightened security.
Brazil � Minister plays down Muslim boycott fears over embassy decision BRAZIL � Political risk: Medium
21 January: Agriculture minister Tereza Cristina Corr�a has sought to assuage fears that Brazil, the world�s largest exporter of halal beef, risks a trade boycott or ban over plans to move its embassy in Israel to Jerusalem. In a report published on 21 January in the Financial Times newspaper, Corr�a said that Muslim-majority countries were vital export markets for Brazil and that Bras�lia sought to maintain good relations with them. She insisted that no decision had yet been made on the proposed embassy move. Brazil sent more than USD3.5 billion worth of chicken and beef to Arab countries in 2017.
Why it matters: President Jair Bolsonaro, who took office this month, has pledged to move the Brazilian embassy in Israel from Tel Aviv to Jerusalem. This reflects the right-wing president�s Christian evangelical beliefs and admiration for U.S. President Donald Trump, who in 2018 transferred the U.S. embassy in Israel to Jerusalem. Such a move by Bolsonaro would almost certainly antagonise Muslim countries, as Jerusalem contains sites that are sacred to both Jews and Muslims. While Corr�a appears to have softened her country�s stance, foreign businesses with interests in Brazil should monitor developments closely and factor into planning the possibility of a consumer boycott or ban of Brazilian products by Muslim countries.
Brazil � Minister says U.S. tourists will no longer require visas BRAZIL � Political risk: Medium
21 January: Brazil�s tourism minister, Marx Beltr�o, announced that the country plans to eliminate visa requirements for U.S. citizens. The minister did not indicate when the new policy would be implemented. He also said that the country intends to eliminate visas for Australian, Canadian, and Japanese tourists.
Why it matters: The policy is part of plans by Brazil�s president, Jair Bolsonaro, to boost the country�s tourism sector. Brazil currently receives approximately 6.5 million foreign tourists per year, and the government is hoping to almost double that number to 12 million by 2022. A2 Global views the proposed Brazilian policy as positive for business sentiment as an increase in tourism will likely offer opportunities for foreign companies.
Colombia � Helicopter shot down by ELN guerrilla group, crew kidnapped COLOMBIA � K&R risk: High
14 January: Reports in the local press stated that a helicopter carrying the equivalent of USD500,000 in Colombian pesos was forced to making an emergency landing in Hacar� municipality, Norte de Santander department, after receiving gunfire on 11 January. The three crew members were then kidnapped by the National Liberation Army (ELN), the largest active guerrilla group in the country. Reports state that two of the crew are security guards linked to Brinks, a U.S.-based logistics security firm, while the other kidnap victim was the pilot, who works for local company Aerocharter Andina. The ELN has confirmed that it was behind both the shooting and the kidnapping. Why it matters: The army, police and public prosecutor�s office have begun an operation to locate and rescue the kidnapped individuals, who remain unaccounted for. The case highlights the high security risks facing personnel and assets in rural Colombia, particularly in north-eastern areas where the ELN operates. A2 Global advises firms considering doing business in Colombia, especially rural areas, to conduct a thorough threat assessment prior to making investment decisions. Business travellers should minimise travel to north-eastern rural areas, especially the border with Venezuela, travel with private security, and use a secure travel management service.
Colombia � Twenty killed in car bombing at police academy in capital COLOMBIA � Terrorism risk: Elevated
17 January: A car bombing inside the premises of the General Santander National Police Academy in Bogot� killed at least 20 people and injured 68. The bomb exploded at approximately 0930 local time. Local media report that the vehicle entered the police academy through one of the secondary entrances, and that windows of nearby buildings shattered when the explosion occurred. The majority of those killed were police officers and cadets, including at least one Ecuadorian citizen. The vehicle�s driver died in the attack for which responsibility was claimed by the National Liberation Army (ELN).
Why it matters: The car bomb � the deadliest attack with explosives in Bogot� since 2003 � highlights the ELN�s continued ability to carry out attacks on the security forces in major urban areas. Business travellers visiting Bogot� and other major cities, such as Medell�n and Cartagena, should exercise heightened vigilance, particularly around police and military installations. Individuals should consider their need for personal security services, minimise night-time travel, and use a secure travel management service.
Venezuela � Anti-government protests in major urban areas tomorrow VENEZUELA � Travel risk: Extreme
22 January: The U.S. Department of State�s Overseas Security Advisory Council (OSAC), issued an alert about forthcoming demonstrations, including in the capital Caracas, that will take place on 23 January. The U.S. embassy will maintain normal business hours during the protest, however movement of U.S. government personnel will be restricted to the Valle Arriba, Sante Fe, and Las Mercedes neighbourhoods in Caracas. In a separate but related development, a group of unidentified men in military uniforms appeared in a video yesterday (21 January) in which they threatened to take action against president Nicol�s Maduro and said they were responding to calls from Juan Guaid� � the leader of the opposition-controlled national assembly � for people to participate in nationwide demonstrations tomorrow.
Why it matters: The video surfaced a few hours after the government announced it had arrested 27 national guard soldiers who were allegedly planning to overthrow Maduro. Business travellers in Caracas should immediately withdraw from the area if they come across anti-government protests, as these will most likely prompt a tough response, including the use of tear gas and water cannon, from security services. Likely flashpoints for protests include around Plaza Alfredo Sadel, a square in Las Mercedes neighbourhood in Caracas, and the Cotiza area of the capital.