US sanctions Venezuelan arms firm for illegal sales

The US State Department on Tuesday announced sanctions against Venezuela's state-owned weapons manufacturer Venezuelan Military Industry Company (Cavim) - along with other firms from different nations - for selling arms and transferring defense technology that could allegedly help Iran, North Korea and Syria develop sophisticated weapons.

The US government will prohibit Cavim and 12 other firms from doing business with any company in the United States or federal or state agencies until February 2015. The sanctions were imposed under the Iran, North Korea and Syria Nonproliferation Act.

The "sanctions were imposed on these entities and individuals because there was credible information indicating they had transferred to, or acquired from, Iran, North Korea, or Syria, equipment and technology listed on multilateral export control lists [...], or items that are not listed, but nevertheless, could materially contribute to a weapons of mass destruction (WMD) or cruise or ballistic missile program," the State Department release said.

It wasn't clear which of the three nations the US government has accused Cavim of doing business with.

Currency devaluation

On Friday, the Venezuelan government announced a 32-percent devaluation of the bolivar. In announcing the move, Planning and Finance Minister Jorge Giordani blamed it on "an outbreak of inflation mixed with speculation."

The official exchange rate now rises from 4.3 to 6.3 bolivars to the dollar.

Analysts have been predicting for months that the government would eventually have to devalue its currency, but the Chávez administration postponed the move to avoid a potentially negative impact on its credibility during last year's presidential elections. The announcement was made just at the start of the Carnival weekend holiday and with President Hugo Chávez absent from the country while he recovers from cancer surgery in Cuba. No one has seen or heard from Chávez in more than two months, and it has not been possible for him to be sworn in for his fourth mandate.

Vice President Nicolás Maduro and other government officials continue to assure Venezuelans that Chávez is governing the country and making decisions from his hospital bed.