VENEZUELA: BRV SHUTS MACDONALD'S FOR TWO DAYS

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