Americas Brief newsletter: 8-14 May 2019

This edition of the Americas Brief newsletter analyses new US sanctions on Venezuela’s security and defence sectors, likely delays at Bogotá’s airport, and student protests in Brazil.

United States & Canada

• Canada – Christian acquitted of blasphemy in Pakistan arrives in Canada
• United States & Iran – US government agency warns of Persian Gulf tensions
• United States & Venezuela – US sanctions defence and security industries

Mexico, Central America & Caribbean

• Cuba – Shortages prompt increase in rationing, long queues
• Dominican Republic – Reduced fuel availability in north-east on 16 May
• Honduras – Power outages heighten operational risk, lead to protests

South America

• Argentina – Large demonstrations in capital heighten travel risk on 15-16 May
• Brazil – Nationwide student protests increase risk of travel disruption
• Chile – Striking workers block road access to capital’s main airport
• Colombia – Flag carrier warns of month-long delay risk at capital’s airport


United States & Canada

Canada flag

Canada – Christian acquitted of blasphemy in Pakistan arrives in Canada
CANADA – Terrorism risk: Medium
8 May: A Christian woman sentenced to death and subsequently acquitted in Pakistan arrived in Canada on 8 May. Asia Bibi’s case led many countries to call for her release, while Islamist conservatives and extremists demanded her execution. The Catholic Church in Canada has offered Bibi support, while the state is expected to grant her anonymity and protection.

Why it matters: Bibi’s departure from Pakistan heightens the threat that Islamists will seek to attack Canadian, Catholic, and other Christian targets in Pakistan and elsewhere. In 2011, the governor of Punjab province Salman Taseer and Pakistan’s minister for minorities Shahbaz Bhatti were murdered due to their opposition to Bibi’s blasphemy conviction. The threat is from organised groups and so-called ‘lone wolf’ attackers, with the latter almost impossible for the security services to detect or deter. Personnel of Canadian commercial interests operating in Muslim-majority countries and Christian places of worship should increase their situational awareness. In the event of any attacks against such targets the potential for a backlash against the wider Muslim community also increases. Companies should also factor this threat into their security planning.

United States & Iran – US government agency warns of Persian Gulf tensions
UNITED STATES – Maritime risk: Low
IRAN – Maritime risk: High
10 May: The United States Maritime Administration, a government agency, warned that Iran could target merchant vessels, including oil tankers, in the Persian Gulf. The warning comes as Ayatollah Tabatabai-Nejad, a senior Iranian cleric, said that the US fleet could be ‘destroyed with one missile’. Meanwhile, the US has deployed the USS Arlington, an amphibious warfare vessel which transports personnel, aircraft, and a Patriot missile defence system to the region. A statement from the Pentagon said the deployment was in ‘response to indications of heightened Iranian readiness to conduct offensive operations against US forces’ or interests in the region. Iran said the move amounted to ‘psychological warfare’. On 12 May, four ships were the subject of a ‘sabotage’ attack off the UAE’s Fujairah port in the Gulf of Oman.

Why it matters: The warning underscores concerns that recent tensions between Iran and the US could escalate into an armed confrontation in the Persian Gulf. The development takes place against the backdrop of heightened tensions between the two countries, after the US’ decision to withdraw from the 2015 nuclear deal and impose new sanctions on Iran. A2 Global advises businesses with interests in the region, including international shipping companies, to monitor ongoing developments and factor these into their operational and contingency planning.

United States & Venezuela – US sanctions defence and security industries
UNITED STATES – Political risk: Low
VENEZUELA – Political risk: Extreme
10 May: The US Department of the Treasury expanded its sanctions targeting the Venezuelan government to include defence and security firms, and imposed new sanctions on two shipping companies and two oil tankers. US and foreign firms working with Venezuela’s defence and security services sectors can now be penalised under the US sanctions regime. Sanctions were imposed on Marshall Islands-based shipping firm Monsoon Navigation Corp, and Liberia’s Serenity Navigation Ltd for delivering oil from Venezuela to Cuba on the companies’ respective vessels. Sanctions were also placed on Monsoon Navigation Corp’s Ocean Elegance and Serenity Navigation’s Leon Dias vessels.

Why it matters: The sanctions form part of the US administration’s gradual ramping up of sanctions against Caracas in an effort to weaken the government of de facto President Nicolás Maduro and support the competing claim to power of national assembly president Juan Guaidó. The sanctions are particularly likely to impact firms supplying the security sector with military spare parts or telecommunications equipment. Firms operating in Venezuela should adjust sanctions lists and practices to reflect the new measures.


Mexico, Central America & Caribbean

Havana

Cuba – Shortages prompt increase in rationing, long queues
CUBA – Health risk: Medium
10 May: The government announced the widening of consumer goods rationing, amid growing shortages. Under the new measures, supermarkets will limit purchases of impacted goods, and some items will only be available through a ration book system. Impacted products include chicken, eggs, rice, beans, and soap. Social media reports show that shortages are prompting long queues at supermarkets.

Why it matters: Commerce minister Betsy Díaz Velázquez blamed the shortages on US President Donald Trump’s hardening of the US embargo. However, the shortages are more a reflection of rapidly declining aid from crisis-hit ally Venezuela. In particular, oil supplies from Caracas have fallen by approximately two-thirds, reducing Cuba’s power generation capabilities and limiting its access to foreign currencies, which it earned through on-sales of oil.

Firms with staff and assets in Cuba should factor shortages and rationing into operational and strategic planning in the three-month outlook. Individuals visiting the island should mitigate the impact of shortages by ensuring they take essential supplies with them. Mitigate queues by visiting shops early in the morning.

Dominican Republic – Reduced fuel availability in north-east on 16 May
DOMINICAN REPUBLIC – Travel risk: Elevated
14 May: Members of the ANADEGAS union, which represents fuel sellers across the country, will not sell fuel from their petrol stations in the north-eastern region of the country on 16 May, in protest against illegal sales from unregulated competitors. The union also announced that its members are planning to stage a march to the national palace, located in the Gazcue district of the capital Santo Domingo, on 16 May. However, the march route and timing were not disclosed.

Why it matters: The decision to halt fuel sales for one day is likely to cause severe disruption to hauliers in the north-eastern region, and may impact consumers in Santiago de los Caballeros, the country’s second-largest city. Firms and individuals which operate in the north-eastern region should ensure their vehicles have sufficient fuel supplies the day before sales are halted, as availability is likely to be extremely limited on 16 May. Individuals in Santo Domingo on 16 May should exercise heightened caution in the vicinity of the national palace and avoid the march as a precaution.

Honduras – Power outages heighten operational risk, lead to protests
HONDURAS – Travel risk: Extreme
8 May: Power outages across the country impacted at least 2 million people and led to multiple protests in the week to 8 May, local media reported. Areas most affected include the northern and central departments of Atlántida, Colón, Cortés, Olancho, and Yoro. According to energy provider EEH, the outages were due to a recent increase in temperatures and consequent hike in demand. On 7 May, protests took place in affected urban areas, including San Pedro Sula, the business hub, where protesters put up barricades and burned tyres.

Why it matters: The power outages are likely to continue in the 48-hour outlook, given that both high demand and hot weather are set to persist. Firms operating in Honduras should assess their vulnerability to a loss of power supply, and consider acquiring off-grid electricity generators. Business travellers should monitor updates, exercise heightened vigilance, and travel with trained and vetted drivers.


South America

Protest

Argentina – Large demonstrations in capital heighten travel risk on 15-16 May
ARGENTINA – Travel risk: Medium
14 May: Two large demonstrations are to take place in the capital Buenos Aires in the 48-hour outlook. On 15 May, members of the ATE union, which represents public sector workers, will protest to demand the opening of salary negotiations. Participants will gather at the Casa de la Provincia de Buenos Aires in the central San Nicolás neighbourhood at 0930 local time, before marching 1.8km east to the modernisation ministry.

On 16 May, university professors from the Conadu union, students and scientists will hold a march to demand higher salaries for professors. Participants will gather outside the congress building in the central Balvanera neighbourhood at 1700, before walking 1.9km east to Plaza de Mayo, the capital’s main square.

Why it matters: Both demonstrations are likely to be well-attended, due to widespread discontent over inflation and declining purchasing power. Given their central location, the marches are likely to cause significant localised travel disruption. Individuals in Buenos Aires should monitor updates, avoid march locations at the respective times, and allow additional time for travel.

Brazil – Nationwide student protests increase risk of travel disruption
BRAZIL – Travel risk: Elevated
15 May: Students at public universities across the country will stage protests as part of a national education strike. Students’ groups are demanding high-quality public education and opposing cuts to federal universities’ budgets and the federal government’s proposed pension reform. At public university campuses across the country, students will hold assemblies and protests. A large number of protests are likely in the industrial states of São Paulo and Rio de Janeiro.

Why it matters: While the demonstrations will mostly take place on university campuses, many of these are located in central locations in large cities. There is a low to moderate risk of protesting students blocking roads, heightening travel disruption risks to business travellers. Similar protests on 6 May were well attended, particularly in the city of Rio de Janeiro. Individuals in major urban areas should monitor updates, avoid all protest gatherings, and allow additional time for travel.

Chile – Striking workers block road access to capital’s main airport
CHILE – Travel risk: Medium
13 May: Striking ground handlers at Arturo Merino Benítez International Airport (SCL), the capital Santiago’s main airport, erected roadblocks on the three access routes to the airport’s only terminal building. Police responded by deploying water cannon. The demonstrators, who are employees of ground-handling firm Swissport, have been protesting since 9 May, when collective bargain negotiations broke down over workers’ salary demands. Further protests were held on the morning of 14 May.

Why it matters: The protests are likely to continue beyond 14 May, and police operations could lead to residual disruption once protesters have been dispersed. Individuals with flights departing from SCL should monitor updates, follow the instructions of local police, and allow additional time for travel to the airport. They should not attempt to pass roadblocks, as this could provoke violent confrontations with protesters.

Colombia – Flag carrier warns of month-long delay risk at capital’s airport
COLOMBIA – Travel risk: High
7 May: Flag carrier Avianca announced that maintenance work at the capital Bogotá’s El Dorado International Airport (BOG) is likely to disrupt domestic flights until 7 June. Due to work on aircraft parking bays, aircraft are to be allocated different gates, or boarded away from the terminal buildings, which could result in delays to flight schedules. As the work is taking place on bays used solely by Avianca, no other airline will be impacted.

Why it matters: Individuals planning to fly to or from BOG with Avianca in the one-month outlook should re-confirm their flight status prior to travelling to the airport. Pay frequent attention to flight status, gate, and boarding announcements once at the airport.

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