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Cablegate: Venezuela: Brv Shuts Macdonald's for Two Days

VZCZCXRO7159
PP RUEHAO RUEHCD RUEHGA RUEHGD RUEHGR RUEHHA RUEHHO RUEHMC RUEHMT
RUEHNG RUEHNL RUEHQU RUEHRD RUEHRG RUEHRS RUEHTM RUEHVC
DE RUEHCV #1444 2842214
ZNR UUUUU ZZH
P 102214Z OCT 08
FM AMEMBASSY CARACAS
TO RUEHC/SECSTATE WASHDC PRIORITY 1978
INFO RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
RHEHNSC/NSC WASHDC
RUMIAAA/HQ USSOUTHCOM MIAMI FL
RUCPDOC/DEPT OF COMMERCE
RUEATRS/DEPT OF TREASURY

UNCLAS CARACAS 001444

SIPDIS

E.O. 12958: N/A
TAGS: ECON EFIN PREL EINV PGOV VE
SUBJECT: VENEZUELA: BRV SHUTS MACDONALD'S FOR TWO DAYS

1. (SBU) The 115 MacDonald's restaurants in Venezuela were
closed for 48 hours on October 9 following an inspection by
the tax authority, Seniat. According to a Seniat press
release, Seniat fined as many as 16 of the MacDonald's
restaurants 1,150 BsF ($535 at the official exchange rate)
because of irregularities on the books on amounts owed in
taxes.

2. (SBU) When unable to reach a MacDonald's spokesperson
the morning of October 10, Post Commercial Counselor reached
out to the local franchise association. An association
contact informed him that Seniat had taken the action to make
an example of an emblematic U.S. company. When Post finally
reached MacDonald's, however, a company spokesperson disputed
this, noting that other companies (including Wendy's but also
some Venezuelan food franchises) had been targeted at the
same time.

3. (SBU) The Seniat press release noted that during the
Seniat inspection, more than 200 other government official
were present, including representatives of Venezuela's
consumer protection institute (Instituto para la Defensa de
las Personas en el Acceso a los Bienes y Servicios -
INDEPABIS); the Labor Ministry; and two Labor Ministry
Institutes, including the Institute for Training and
Socialist Education (Instituto de Capacitacion y Educacion
Socialist - INCES) and the National Institute for Prevention,
Health and Labor Security (Instituto de Prevencion, Salud y
Seguridad Laborales - Inpsasel). MacDonald's underlined that
the presence of so many government entities was unusual.

4. (SBU) MacDonald's informed the Commercial Counselor that
it plans to meet with Seniat on October 13 to discuss the
Seniat regulations. According to MacDonald's, Seniat
regulations on bookkeeping are ambiguous and leave much to
the discretion of the officials performing the audit.
MacDonald's plans to ask Seniat to show it the exact format
in which books should be maintained. MacDonald's can re-open
at 2:00 PM on Saturday, October 11.
CAULFIELD

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