Geopolitics

Venezuela: Could Guyana Be Maduro’s Falklands?

Venezuela, facing economic turmoil and the challenge of upcoming legislative elections, is inflaming a centuries-old border dispute with Guyana.

Venezuelan President Nicolas Maduro on April 29
Venezuelan President Nicolas Maduro on April 29
Marcos Peckel

-OpEd-

BOGOTA â€" A long-running border dispute between Venezuela and the former British colony of Guyana has been intensifying for weeks, purportedly because of plans by U.S. oil company ExxonMobil to conduct oil exploration in an area known as the Essequibo region.

Since winning independence in 1830, Venezuela has laid claim to the Essequibo region, which makes up around two-thirds of Guyana’s small territory. And on May 26, in response to what he claims would be an incursion by ExxonMobil, Venezuelan President Nicolas Maduro announced a maritime defense zone comprising Essequibo and a vast portion of Guyana’s territorial waters.

Tensions escalated further last week when Maduro recalled Venezuela’s ambassador to Guyana.

It's complicated

The formal delimitation of borders in Latin America coincided with the dying moments of Spain’s colonies in the region, when an array of viceroyalties, captaincies and governorates gave way to today’s independent states. It was in South America that the international legal principle of uti possidetis juris was born: when a new nation arises, it keeps the same borders it had before independence.

The former country of Gran Colombia â€" comprising modern-day Colombia, Venezuela, Ecuador and Panama â€" bordered Great Britain in the east, which itself didn’t recognize the border at the time.

The Guyanas, a region colonized by the Dutch, French and British, have always been an outlier in South American geography. After an interminable series of conflicts, the three countries formalized the current borders in the 1814 London Convention. Except the treaty didn’t account for the western frontier of British Guyana, bordering Venezuela, which was too weak to exercise its sovereignty over the resource-rich border area.

Venezuela and Great Britain ultimately submitted their dispute to international arbitration, resulting in the 1899 Paris ruling that gave Essequibo to the British. The court that produced the sentence was heavily biased against Caracas, and none of the judges came from Venezuela. Severo Mallet-Prevost, one of the judges on the tribunal, later revealed that the Russian president of the arbitration panel, Friedrich Martens, had negotiated with Britain to rule in its favor in return for concessions to Tsarist Russia.

Venezuela, for its part, declared the Paris ruling null and void at the United Nations in 1962. In 1966, three months before Guyana gained independence, London and Caracas negotiated the Geneva Agreement, which simply recognized Venezuela’s “displeasure” with the British presence in Essequibo but failed to produce a lasting accord.

In 1989 the two countries agreed to the UN naming a goodwill envoy to help resolve the border dispute. But 26 years and many land and sea skirmishes later, the conflict is no closer to resolution.

Smoke and mirrors

Ahead of legislative elections scheduled for later this year, President Maduro is trying to distract Venezuelans from their country’s profound social, political and economic crisis by stirring feelings of nationalism.

His maritime defense zones are a monstrous invention unilaterally imposed on his neighbors, based on an imaginary border line that assumes Essequibo is Venezuelan territory.

Guyana has accused Caracas of putting its national security at risk, receiving the support of the United States, Great Britain and the Caribbean Community (CARICOM). The Union of South American Nations (UNASUR), faithful to its record of incompetence, is silent on the matter.

​

President Maduro’s actions raise the dark specter that he could repeat Argentina’s disastrous invasion of the Falklands/Malvinas in 1982. The ghost of Argentine General Leopoldo Galtieri is back to haunt the Latin American coast, this time in the form of Nicolas Maduro.

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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