The Myth of the Bs.6.30 Dollar

Nothing's as rojo rojito as the tape...

Nothing’s as rojo rojito as the tape…

Here’s a ditty that came in from a reader who, for obvious reasons, would prefer we don’t name him. It gets at something people continually miss: in the real world, even CADIVI dollars cost way, way more than Bs.6.30.

Take it away, reader:

This is the candid testimony of a non-enchufado businessman who imports and sells retail merchandise through CADIVI. I want to make sure people actually grasp what it’s like to import under our perverse currency control system, because there are a lot of misconceptions out there.

People think we have it easy. Let me show you just how easy we have it.

It all starts long before you start to put together your carpetas. Just to register in RUSAD and gain the olympian privilege of submitting a request to CADIVI, you need to tick a long series of boxes. Needless to say, you need to register your company, which is not as straightforward as you might think. Then you need to gather slew of stamps and certificates: a labor “solvencia” showing you’re in compliance with a thicket of labor rules, the INCES certificate, RIF, your IVA solvencia, your ISLR solvencia, your Fondo de Ahorro Obligatorio para la Vivienda (?!) solvencia, your municipal tax solvencia, etc. etc. etc. By the time you get the last solvencia on your list, the first one has probably already expired: go back and get it again. 

For the masochists among you, this is the 24-page document explaining what you need to get on RUSAD. It includes crucial details like exactly how you may and may not bind the pages to the folder. Just so we’re clear, this isn’t what you need to do to get dollars, this is what you need to do to register to be able to ask for them

But say you’ve managed this marathon-to-the-starting-line: great! Hope you have some breath left, though, because this is where the real fun starts.

Assuming you want to import anything other than chemicals, fertilizers, live animals and some minerals, you must obtain a “Certificate of no –or insufficient– production” (CNP in the Cadivese) from the Ministry of Light Industry and Commerce (MILCO).

To score a CNP, you need to either be exceedingly lucky or hire a fixer, (a.k.a., a gestor). This will cost you anywhere from 0.30 to 10 Bs per US$ requested, depending on the product. The process takes from 2 to 3 months, and you bear the risk of being rejected at any time for any reason all on your lonesome.

In some cases, you may also need a SENCAMER certificate – don’t even ask – that’ll add another couple of months and 0.30 to 5 Bs per US$ to your tab.

We’re just getting going here. The next step is securing the Authorization to Acquire  Foreign Currency – AAD, in Cadivese. That one takes about a month. After this you are allowed to import under a set of very strict and always-changing CADIVI deadlines and requirements. Not complying with any of these can lead to your import being disapproved by MILCO and/or CADIVI, in which case you and your overseas provider won’t get paid.

By now, you’ve grasped that, as a business-owner, you’ll need to hire a number of people to handle all this paperwork. In SMEs you’re talking perhaps 10 people, in larger companies as many as 100, doing nothing but this stuff: all day, every day. Also, you better be ready to spend most of your time supervising every step of the process, as a misplaced coma can – and will – cost you hundreds of thousands of dollars.

Now the big day is here, and your import shipment has actually reached a Venezuelan port. Breathe. Every single time you try to get anything through custom control, there will be “issues”.

This means you have to bribe the officials (usually something between 0.50 to 2 Bs per US$). Of course, after this the unworthy-of-capital-letters national guards will also want their share (here we’re talking 0.50 to 5 Bs per US$). Occasionally you might also have to bribe the CADIVI official at customs (maybe 0.30 to 2 Bs per US$).

So you’ve done all that, and now you have your actual stuff: fantastic! Now you’re done, right?

Silly you.

Remember at this point CADIVI hasn’t actually disbursed any dollars yet. In the best case scenario, that’ll take another year. Since no foreign supplier is willing to wait that long you have a choice.

You can (1) hire a very expensive fixer (5 to 20 Bs per US$) to speed it up or (2) buy dollars in the black market to pay the international provider, in the understanding that he’ll remit you the dollars CADIVI hands him back to you, when they do come. Both options are risky: there are any number of fake, swindling “gestores” pullulating around CADIVI, and  the black market route could end up with the provider running off with both your dollars and the ones CADIVI pays him, or, worse, with you rotting in jail for ilícitos cambiarios.

So, how do businesses cover themselves against such large risks/costs? Basically, everyone asks their foreign partners to pump up some of the prices and/or put made up fees/charges on the invoice, as a way to get obtain extra dollars. Of course, you can also sell the products using the parallel rate as reference (good luck with that.)

The time it takes from processing the CNP to the final disbursement from CADIVI can be anywhere from 15 to 24 stressful months, at a cost that could be anywhere between Bs.7 (if you’re totally zanahoria, very patient and unfathomably lucky) and Bs.30 per greenback. How long and how much it will be in the end is up to the stars.

You might want to read your horoscope, that’s my advice.

That, at any rate, was the system as it existed until last week, when President Maduro had one look at the CADIVI behemoth and decided that what it really needed to overcome its deficiencies was…two more layers of bureaucracy.

¡En serio!

61 thoughts on “The Myth of the Bs.6.30 Dollar

  1. This is good stuff. I’ve heard many opposition people, including businessmen (who don’t get the mythical 6,30 USD) saying that these comerciantes hit by Maduro & Co. had it coming, “bien hecho”. Trying to explain how the copper is beaten is tiresome and useless. Por eso estamos como estamos.

    • precisely. When a state riddles itself with inefficient and corruption-prone practices, under limited rule of law and next-to-no transparency, you can see how the black market can easily mushroom — and corrode a society.

  2. Blah blah blah, nothing new here. Venezuela is a dicatorship with a system that is broken at all levels. Either you can write articles which state what is wrong (everything, so nothing is ever new). Or you can write articles on what it’s going to take the country into a new direction.

    I’ve only started visiting your blog and you are already putting me to sleep.

  3. Quico: this must be translated and disseminated widely, as in, in one of the mainstream media newspapers. Ricardo’s comment, too, is worthwhile.

  4. Very nice piece, what I fail to understand is why so few people know about this, I knew about the delays and matracas on the ports but never imagined that it could take up to 2 years for the provider to be paid, how can a port economy operate like this? I guess the briefcase-companies dont have to go throught all this trouble

    • Because there is another ring that is more illegal than this way…that is paying the people in cadivi that approves your dollars…secretaries…things in key positions…The one I have heard when it was at 4.30, was getting more than you need, and of course what you are asking you paid the same amount in chequeras in Bs already signed…so your dollar cadivi instead of 4 it was 8 or 12… and still with that you go to the black market and sold it in 20-30? (i mean by that time i heard the story) And then you could see poeple buying apartments, loft in plano, paying with cheques of different companies ,So there are so many sides into the cadivi dollar…

  5. The Cadivi story reads like the description of a torture designed between Kafka and the Marquis De Sade with the added contribution of Rube Goldberg !!

  6. Thank you for this article. I have lived in Caracas for a few months and have never been able to figure out why costs are so high. As a foreigner, I can only take money out of ATM machines and I am charged the 6.3, so for me, when I take out 600 Bsf, my account is debited $95 USD. Everything for me is so expensive that I almost cry every time I go grocery shopping. I can’t even enjoy a Big Mac combo because I refuse to pay $20 for it.

    Joe, you don’t live in Venezuela so for you, yes, this post may not be too exciting, but for us that live here it is very revealing. I’m sure there are more exciting Miley Cyrus blogs that you can continue reading.

    • Oh THANKS Fred… Now I have this disturbing mental image of Maduro “twerking” the whole country…

    • Dude…don’t do that anymore please! It’s very easy to find a buyer for your greenbacks in the black market. Anyone would do it.

    • Any foreigner who lives in Venezuela for more than a few days & hasn’t figured out how to get Bs. through different means than an ATM really needs to evaluate their adaptability. I mean really!

      There is PayPal, bank transfers, family transfers – a dozen ways to get $$ to someone who will give you Bs.

      • When I moved to Canada in 1970 you could buy a newspaper from a box. You just put your quarter on a plate with all the other quarters, made change if need be if you only had a dollar, and at the end of the day, the newsboy would come to pick it all up. Latin American visitors thought it was INSANE that no one just grabbed the money from the plate, and took off, because pendejo.

        I really get where this poster is coming from.

        • Amen. There is something to be said for the absence of civic trust engendered by the madness of third-world living.

        • Yes, Jeffrey, but this is at another level. With the current situation prices are not set up at the official rate.

        • I get where Fred is coming from. I don’t know where he finds an ATM that takes his card though. The institutional barriers to behaving within the law in Venezuela are endless!

          • I understand that as well, but here we are dealing with the fact that everything, absolutely everything within the system is cheating on you. Even if you were going to buy a foreign gadget with a state organisation, they will be reaping you off.
            I find extremely easy to pay for a newspaper for its normal price in Canada and leave the coins there. But neither me nor a Canadian pope would find it normal to have to pay more than 4 times what everybody else pays, including the people living in the country
            (and that is part of the implication of an overvalued currency).

        • In Switzerland IT still works this way. The bus as well with a controller comING by once in awhile to check you actually paid. The fine for not paying the bus comes to 30x – 40x the fare if you pay on the spot or later. The ones who dont pay are the foreigners and youth.

      • Let me tell you something: when Mr. Flongerburgerstein uses his foreign issue card in a Venezuelan ATM, it’s the bank that ends up with the dollars, not CADIVI. Say Mr. F uses his card in a Banesco ATM to make a withdrawal of 630 bolivares: (a) 100 dollars are debited from Mr. F’s account, (b) Mr. F gets 630 bolivares in cash, (c) Banesco gets 100 dollars, (d) Banesco can then sell its 100 dollars in the black market and get, what, 6.000 bolivares??? Same thing happens in puntos de venta: local banks get to keep the dollars or sell them in the lechuga market.

      • The bigger questions are: 1) Why should it be illegal for someone to access their money at the true value. 2) Why do so many readers think it’s wrong for someone to follow what he is being told is the legal process to access his funds? Two different issues, both at the root of Venezuela’s savagery.

    • shame on you, saying that following the law is a sin, this is a great example of what venezuelan society has become, yet in this case I must concurr, a foreigner that uses the cadivi rate is very near to the top of the pendejo list, ignorance excluded

      • Yes you are right, I concurr morally, but not ethically nor rationally. The thing is his money is going to a horrible government…and really if he has been months living in the country, there is no one so decent soul saying DUDE!!!!? I know is not moral…but the ethical thing to do against a something really twisted about the venezuelan foreign exchange…

    • OMG! Don’t do that anymore :( … don’t take money out of the atm… find a venezuelan friend that can help you out with that… :)

    • Well you are clearly a FOOL. If you had a brain you would be doing a bank from your USD account to another USD account in exchange for Bolivars. You would also be selling them for the black market rate!

      I’m surprised you haven’t been robbed yet. In due time I guess.

    • I’m laughing here, fuck me. Can’t wait for this guy to realize it. Your Bubbe would call you a Nudnik!

  7. Finally what we all have heard from one way or another ( well because i have heard about how some people from cadivi go and spend money with already signed cheques in BS from different companies, they only fill out the name and the amount of whatever are purchasing -6 apartments) Anyways…that is the thing cadivi just make everyone using it part of the corruption or the illegality because if you don’t get cadivi…yo have to get voldemorts…

  8. by the way, just by suggesting our fellow Fred Flongerburgerstein to use Lechugas we are all incurring in Ilicitos Cambiarios….please don’t shut down CC!

  9. This article is quite interesting. I’m not sure how big the enterprise/business described by the poster is, but it sounds medium sized. I can tell you from experience, the young, small business trying to make it in Venezuela has an even more difficult time because there is no money to be spent on bribes. You have to put up with insults, humiliations and even physical aggression from the “officers of the law.” I’m sure you all know what has been happening in the country this week with the forced price-reductions. They attack small businesses with fervor and many of my colleagues are likely going to lose so much money in the Christmas season, when they made most of their profit, that they will be forced to shut down or at least lay off employees, if they have any. Getting people fired before Xmas, how very Scrooge of Maduro. The irony.

    • fired? remember they cannot be fired…another nice thing so just would make people shut their doors and being seized by “IT” ( la cosa the is no other thing i could say now that I am so angry)

  10. An excellent description of the insane difficulty of importing anything privately into Venezuela (I had heard of only some of this, plus a Bs. 100 mm fee per container to “nationalize” merchandise in the ports). Apart from monetary liquidity concerns, $ as a store of real value, lack of sufficient Govt. $ income to cover spending needs, this is another reason why, in an import-based economy, the parallel rate is sky-high, and going higher.

  11. And I thought it was much simpler than that.

    Of course, the bribes, the corruption were there. I thought, naive me, that they would drive the “official” exchange rate up but not by a multiple.

    Then, the Venezuelan importer bought dollars in the parallel (or black) market to pay the exporter upfront, the exporter in a foreign country would not send anything before being paid. The exporter had two prices, a real one and one for CADIVI which was higher. When the exporter got the dollars from CADIVI, he/she was kind enough to deposit them in an account in the importer’s name, in a real currency instead of toilet paper with Venezuelan heroes’ likeness on them.

    Then, the importer would sell his merchandise at parallel exchange rate prices, which he/she had paid. The dollars in a foreign account could remain there, be reinvested or somehow be taken to Venezuela and sold in the parallel market. Of course, the whole “importing” exercise could just be just an excuse for getting cheap dollars from CADIVI, some enchufado importers might not be importing what they say they import.

    But this is far weirder than that.

  12. When I read things like these, I get the sense that people in Venezuela really do not realize how fucked up they are, because at this point I feel that now there are only two alternatives: outright, widespread and extremely prejudiced violence against these thugs or just put up with all these arbitrariness, like…in Cuba. Seriously. Too late for middle grounds.

    • I agree. Cuba has for too long been pulling strings — in sneaky fashion. I suspect the Castro regime even has control over the voting and the CNE — how I’d love to be wrong. Even if the Cubans were to grant the oppo small wins for more seats in the AN, as window dressing, what’s to stop Diosdado from tightening the bolts even further?

      In sum, #8D is a crap shoot. It is being between a rock and hard place. And while it’s easy for me to say, I think that making the effort and going to vote is a chance worth pursuing. Que Dios bendiga a Venezuela.

  13. Out of a particular brand of masochism, I clicked on the SENCAMER link to go down that particular rabbit hole.

    I am not a native Spanish speaker, yet the very first thing I noticed is that this “National Autonomous Quality Service” has misspelled its very own name in the page’s header –


    Oh, dear.

      • Since this SENCAMER is apparently in charge of (a) guarding and enforcing standards, and of (b) “guaranteeing the quality of goods and services acquired by Venezuelans”–yes, it would seem that *by definition*, normaliozación is now the new normal.

        There be a law against spelling it the counterrevolutionary way, so cuidado.

  14. I’m just thinking ahead…. what would happen if the oppo’s take over and everything is decentralized? That is, everybody is free to conduct business as they please. First of all, there will be people with money and other resources who have “personal” relationships with others who can use the money to produce products and services and profits. Those relationships would be the “control” that assures that the borrower shares the profits made with the lenders? So, it would not be necessary for an immediate restoration of a new bureaucracy, legal system, law enforcement that is free of corruption? Does that make sense?

  15. It’s so tragic that almost everything that is currently wrong in Venezuela is directly, or at the very least indirectly caused by Cadivi.

    I mean, inflation, economic distortion, corruption, scarcity, violence, robbery, fraud, loss of ethics, complete distortion of values among the population, insane overspending,…

  16. Please tell the world how, on top of everything, Venezuela had already experimented with the same type of system back in the 1980s, leading to the same type of abominable outcome, but this time we really outdid ourselves.

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