Friday, January 24, 2014

Jeff Bezos will go to jail in Venezuela

The regime has made it official today: there is a new decree law from Maduro regulating how commerce can operate, from profit margins to price controls and the astounding sanctions to whomever does not respect them. A new bureaucracy, SUNDDE (and not as sweet as a sundae for sure) is created for the task.

To allow you a better understanding of a law that is going to result in a huge black market controlled by corrupt bureaucrats of the regime let me tell you why Jeff Bezos, the founder of Amazon, should never set foot in Venezuela. Not that he would, the guy is smart enough to avoid rat holes.

It starts with article 2 that states the reach of the law including "foreigners" and "including transactions made through electronic means". So Jeff Bezos is subject to the law if the regime decides that Amazon is overpricing, say, Harina Pan sold through Amazon.

Amazon is speculating , and possibly hoarding, to destabilize the Venezuelan regime


And it is quite likely that Bezos will face sanctions. Article 32 says that under no circumstances can something be sold with an earning bigger than 30%. That is, if Bezos offers something at 130 that means that all his costs, shipping included, must be exactly 100 or more. Otherwise he will incur a sanction. Let's look at the picture above. Amazon is selling Harina Pan, the Venezuelan main staple, at 3.5 USD (numbers rounded for simplicity).  Even if I use the official 6.3 rate this means that Bezos is selling the essential food item of Venezuelans at 22 VEB in local currency. And you know what? In Venezuela it can only be sold at 7 per price control rules. In other words Amazon has a profit of MORE than 200%. He should be punished!!!!!!

And what are the sanctions that Jeff faces? Article 45 lists some of the actions that can be taken against Amazon: a fine, disestablishment of the brand, occupation of Amazon depots by the Nazional Guard for up to 180 days, shutting down of Amazon web for up to 180 days, confiscation of whatever (preferably electronics, books the regime has no use for them), and more.

But that is not all, Jeff Bezos may also fall under article 54.  See, in the print screen I got today Amazon says they have "only" 10 packages of 2 pounds left. How do we know that is true? How do we know that Bezos did not order a hoarding of Harina Pan sensing that the increasing scarcity of the item in Venezuela will make desperate people order same day delivery at any price for their Sunday Morning Brunches? Until a commission of the Nazional Guard and the new SUNDDE is sent to visit Amazon depots we will not know. And if he is guilty then he will have to pay for the travel expenses, of course. If Bezos is found guilty of hoarding Harina Pan he faces from 8 to 10 years in a Venezuelan jail, in addition of heavy fines reaching above 200K USD while Amazon depots would be occupied for 180 days.

Mug shot suggestion
for the SUNDDE
In addition article 55 implies that if Bezos sold once Harina PAN he must keep selling it but at 7 even if he loses money! That article would consider his refusal to be a boycott of Harina PAN. Article 56 goes further in that Amazon may incur in deliberate sabotaging of the Venezuelan economy and regime if it were proven that the hoarded Harina PAN was not made in Colombia and instead was smuggled out of Venezuela to the US depots of Amazon. Then not only Jeff goes to jail in Venezuela but the government will confiscate Amazon. Article 59 specifies that in this case Jeff can go to jail for up to 14 years.

There are other additional infractions that Amazon could be at the very least investigated, from the sale of gift certificates (a very popular way for Venezuelans to save their now extinct quota for Internet purchases) to the suggestions of bundles that often appear in Amazon.  But the above is enough I trust for the reader to get an idea how absurd the law is, how disproportionate it is, how political is its intent, how unenforceable it will be.

In short, this is a law that propels not only black market but that will lead to rationing since the SUNDDE is not only involved in price fixing but also in how to distribute stuff.


32 comments:

  1. Of course I did not consider shipping, etc, etc... in the way Amazon could have decided on the price of its Harina PAN. But the point is that the bureaucrats that will be in charge of that law could not care less about these details, nor are they duly prepared to understand them. They will sanction first, then you will appeal and at some point you may be proven right. Meanwhile, for days or weeks, your good name is thrown to the wolves of public opinion.

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    Replies
    1. Yes, shipping and lots of other things. However, you've clarified the paradoxical context of Venezuela as an alternative universe. Bazaar policies create many bazaar results that are readily visible when comparing things outside the Chavismo bubble. Come to think of it, inside the bubble, it's looking more and more like a prison.

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    2. Yep Gordo, what we got here is the Law of the Souk.

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  2. This is the most confusing, most complicated law the commies could have come up with. It is certainly a political tool to selectively punish business owners. But more than that, how can you apply something like this? Imagine a bank that makes most of its money through interest rate spreads and then has to incur in all sorts of costs. This means that lending rates, which are still somewhat market-regulated will come down?

    How ignorant and mediocre you have to be to approve something like this?

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    Replies
    1. This is not "approved", it is dictated through the enabling law of last year. There has been no discussion whatsoever besides inner chavismo discussion as to how far they could go.

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    2. It's not for punishing it's for skimming.

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  3. It is actually better than your SINGLE example.
    Jeff has many prices for PAN
    http://www.amazon.com/s/ref=nb_sb_ss_i_0_6?url=search-alias%3Daps&field-keywords=p.a.n+harina&sprefix=P.A.N.%2Caps%2C548&rh=i%3Aaps%2Ck%3Ap.a.n+harina

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  4. Anonymous6:53 PM

    Some of what you are saying sounds exactly like the situation in the book Atlas Shrugged by Ayn Rand. Remarkable that this can happen in "real life". Let us hope for the best for your country.

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  5. Milonga7:03 PM

    Meanwhile, Lula doesn´t see anything of this happen, greets the return of Bachellet to the arms of progressism, and predicts a pinkish future to a Latin America, united in ideological idiocy (tha's my saying). Recommend reading his predictions to those that read Spanish. Hail Lula! http://elpais.com/elpais/2014/01/06/opinion/1389026911_978607.html

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  6. Unbelievable! When will this madness end?

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  7. charly7:37 PM

    When one thinks of Maduro and his gang, only one word comes to mind: wankers!

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  8. Soon all economic activity on Planet Venezimbabwe will cease....

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    Replies
    1. Anonymous12:54 PM

      But there must be toilet paper at all costs for this shitty revolution and its followers!!!!

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  9. Tic,tac,tic,tac...

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  10. 1979 BP1:34 AM

    The Castro brothers are very proud of this.

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  11. Well technically Bezos is not actually selling the corn flour, it is his platform that allows people to sell and buy through his e-commerce site.

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  12. Anonymous7:18 AM

    The profits from the drug trade are going to plummet dramatically !

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  13. Anonymous11:19 AM

    Of Venezuela’s estimated 2.3 million barrels of average daily oil output, about 330,000 barrels per day are thought to go to China to pay cash advances. Another 260,000 barrels per day are sent to Cuba and other neighbors at cut-rate prices, while 760,000 barrels per day are refined to meet local demand for fuel sold at a fraction of what it costs to process it.


    http://www.latimes.com/world/worldnow/la-fg-wn-venezuela-airlines-ticket-sales-20140124,0,2603008.story#ixzz2rQSiDT6q

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  14. Anonymous12:53 PM

    What idiots! How the hell do they know what an overseas item costs to produce? Do Marxism and stupidity go hand in hand? Everything is going to get smuggled in and out of Columbia now. Massive black market in the making and the police will probably raid your home if they suspect you have cheated. This may be the last straw even for Chavistas.

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  15. AMAZON (Bezos) does not price the Harina PAN! AMAZON is only a sales channel of "Mi Antojito Latino".

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    1. And how does this change the point of my post?

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    2. Anonymous2:23 PM

      Oh, I will tell you. You just overlooked a tiny detail. All of the Harina PAN sold in the U.S. is NOT produced in Venezuela, but in COLOMBIA. Therefore, Venezuelan laws do not apply here. Not that such a law would not win the world championship of absurdity, and it is for all practical purposes inapplicable. Then, again, Colombians do not have a problem with whichever price Harina PAN is sold in the U.S., as long as it is sold! That means export earnings for them and of course tax earning for the government. Lorenzo Mendoza may own the company, but it is a Colombian company, most probably using Colombian corn, so the above example clearly does not apply.

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    3. Your nitpicking is way besides the point of this entry; which you could benefit from reading it again with more leisure.

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    4. Anonymous4:18 PM

      I read it at leisure allright and I understand completely the reaches of the law, which makes it even more absurd in light of the fact that there is practically no Venezuelan-made product - except oil, of course (not man-made) - that is desired or wanted outside its borders. So the provision of the law is based on a totally fictitious scenario. That is why your example it inapproppriate, and Bezos can rest easy, lol.

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    5. You are still not getting the point and you are still not understanding that if anyone were idiot enough to pay the courier price for corn flour from Colombia the sundde law actually could apply. But for some reason you have a need for litterality while shielding as Anonymous to make a point against me so I'll stop here.

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  16. Anonymous9:36 PM

    Actually, it is very clear to me that your understanding of this matter is very poor. Again, NO, the sundde law cannot apply because this is a COLOMBIAN company, not Venezuelan. What part of COLOMBIAN don't you understand? The fact that there is a Colombian brand named as a Venezuelan brand does not imply anything else. This is a Colombian company subjected to Colombian laws, nothing else. But don't take my word for it. Let's just wait until or if the Venezuelan government dares go against Amazon or someone else for that matter for selling Harina Pan at a higher price. My bet is that either of two things might happen: 1) the Venezuelan government won't do anything because it knows it doesn't have a case, or 2) they will attempt something in which case the whole world will be laughing at them.

    You don't take different views very easily, do you? Temper, temper, mon capitaine. By the way, literality is spelled with one t. Thanl you very much.

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  17. "Only 10 left in stock!"

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  18. Oh dear, some people don't understand the concept of using an example to explain a point. Don't worry Daniel. We get it. And thanks for explaining this new decree in "layman's terms".

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    Replies
    1. Anonymous4:29 PM

      "So Jeff Bezos is subject to the law if the regime decides that Amazon is overpricing, say, Harina Pan sold through Amazon." This was not merely an example. This was a factual statement as if something will happen, once the law is sanctioned. And its premises are incorrect. When you present an example, you use the word "if" or state the hypothetical nature of the example. Clearly, this was not the case. But, now we know who do not not get it. I am done with lesser minds and sycophants. Other blogs are much more interesting and worth reading than this one.

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    2. Anonymous4:31 PM

      And now you resort to censorship? Very telling!!!

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    3. If you were a regular reader and regular comment poster you would know that after a couple of days posts are moderated and published only when I have time to seat in front of a computer (to avoid spam and to make sure I do not miss an interesting comment, which is not the case with you). But obviously you are not a regular, just an average anonymous that thinks that post bombing will hide that he is apparently the only reader that is irony impaired.

      Please, do go to other blogs and do not come back. Google analytics tells me that you will not blip statistically.

      Delete

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