Sucre, the virtual trade currency set up to facilitate transactions between Venezuela, Ecuador, Cuba, Bolivia and Nicaragua, and subject to a 2014 investigation by the Ecuadorian authorities amid allegations of serious abuse and money laundering control issues, is still a relevant use case that demonstrates the importance of implementing the proper financial crime and network risk management controls to ensure that what was in essence a perfect solution to a commercial challenge is not undermined by involvement – albeit inadvert – in financial crime.
Sucre, an invention of Hugo Chávez in 2010, stands for the Unified System of Regional Compensation (in Spanish) and is also the last name of the 19th century Venezuelan leader, Antonio José de Sucre y Alcalá. It is primarily a trading currency managed by a board of central bankers, which is used by importers and exporters to make and receive payments in their local currencies. As The Wall Street Journal points out, “Sucre’s appeal lies in its implicit payment guarantee…In a typical sucre transaction, a company in Ecuador sends the Venezuelan importer an invoice denominated in U.S. dollars, which is Ecuador’s national currency. The Venezuelan company then sends that invoice to the Venezuelan central bank, handing over bolívares. The Venezuelan central bank converts the bolívares to sucre and transfers the sucre to Ecuador’s central bank. There, it is converted into U.S. dollars, Ecuador’s national currency, and the exporting company receives its payments.”