Trafigura Mexico Permits Halted Due to Contraband Fuel Probe
(Bloomberg) -- Mexico President Andres Manuel Lopez Obrador said that Trafigura Group had fuel-import contracts suspended because it allegedly transported contraband fuel amid a government-led crackdown on private energy companies.
The international commodity trader is under investigation by Mexico’s Attorney General’s Office, or FGR, for its suspected connection to a fuel smuggling operation, according to Jesus Ramirez, a spokesperson for the Mexican president.
Under the Lopez Obrador administration, Mexico has awarded fewer import permits and sought legislative changes to give state-owned oil company Petroleos Mexicanos greater control over fuel, which it says is part of efforts to tackle corruption and tax evasion. Trafigura had five permits for gasoline, diesel and jet fuel rescinded in September by the country’s energy regulator without explanation.
“Recently among these famous international companies it was discovered that they are transporting contraband fuel, and Trafigura had its import permit suspended,” the president said during a press briefing on Monday.
“Trafigura strongly denies that it is or has been improperly transporting or delivering fuel into Mexico,” a Trafigura spokesperson said in an emailed response to questions. “Trafigura complies with applicable laws and regulations in the jurisdictions in which it operates, including Mexico. Trafigura has provided documents and evidence of compliance with applicable requirements to the relevant authorities and will continue to work with the authorities to clarify this situation.”
Previously, government officials said Pemex won’t give new work to Trafigura for at least the remainder of Lopez Obrador’s six-year term due to investigations. Other commodity trading houses are also under review.
Trafigura is among a number of top commodity traders that have faced bribery and corruption investigations in a worldwide probe that has spanned jurisdictions from the U.S. and Switzerland to Brazil and Mexico.
The Mexican government says that private companies are bringing in fuel without paying proper taxes, and it has stationed military personnel at several border customs offices. Critics argue the crackdown is just a government effort to grab more market share for Pemex after its sales suffered following market reforms in 2013 and 2014.
Lopez Obrador said that naval forces apprehended a tanker carrying contraband fuel and the case is under investigation by the attorney general. Last month, Mexican news site Contralinea reported that Mexican intelligence agencies were investigating Trafigura.
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