IT PAYS TO TRAVEL - HIGH VISA DEMAND IN VENEZUELA

UNCLAS SECTION 01 OF 02 CARACAS 000310

SIPDIS

E.O. 12958: N/A
TAGS: CVIS CASC ECON SOCI VE
SUBJECT: IT PAYS TO TRAVEL - HIGH VISA DEMAND IN VENEZUELA

(1)Summary: Applications for B1/B2 visas continue to increase
steadily at the U.S. Embassy in Caracas. Visa applicants include
many first-time visitors to the U.S. with little previous travel,
and yet are bona fide temporary visitors for business or pleasure.
While the political situation remains alarming for some Venezuelans,
the driving force causing the increase in tourist applications
appears to be economic - Venezuelans can use the rules related to
exchange rate controls to make travel outside of the country
profitable. Foreign travel provides Venezuelans both with subsidized
dollars and access to cheap goods that can easily be resold at a
profit. Non-immigrant visa applicants intending to immigrate to the
United States may prefer petition-based visas, where fraud rates
have increased over the past few years. End summary.

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Go On Vacation, And Make Money Too
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(2) The number of B1/B2 visa interviews scheduled per day at Embassy
Caracas has remained roughly steady over the past few years, yet the
wait time for an interview has increased dramatically, from 32 days
in June 2006, to 126 days in June 2007, to 160 days in June 2008.
In January 2009, the wait time was 217 days. Over the same period,
the difference between the official exchange rate (2.15 Bolivares
Fuertes per U.S. Dollar) and the higher parallel exchange rate has
increased as well, from a difference of less than half a Bolivar
Fuerte (BF) in June 2006 to more than three BsF in January 2009. As
per Bolivarian Republic of Venezuelan (BRV) regulations,
international travel is a means of accessing money at the official
exchange rate via CADVI, the government organization controlling
access to dollars at the official rate. Travelers to the U.S. can
access a limited number of dollars at the official exchange rate,
and then use that money in the U.S. or bring it back into Venezuela
where it can be converted using the parallel exchange rate. Dream
vacations to Florida, therefore, can pay for themselves. Indeed,
many first-time visa applicants tell Conoffs that it has always been
their dream to go to Miami and Orlando, and that they are applying
now because they can afford it for the first time. Dating to this
divergence in exchange rates, there is no longer a 'low season' for
B1/B2 visa applications in Venezuela - it is always a good time for
a vacation in the U.S.

(3) Applicants often state their intentions to buy clothes and other
items in the U.S. for resale in Venezuela. Most consumer products
are imported into Venezuela, and visitors to the U.S. can easily
make money this way. In 2008, inflation in Venezuela was about 30%,
compared to 3.5% in the U.S., suggesting that this strategy has
increased in profitability over the past year. Many applicants will
list 'shopping' as their purpose of travel, and during visa
interviews they can easily list items they plan on buying. Given
high prices and uneven availability of goods in Venezuela, a
shopping trip to Miami is a sound economic choice even when only for
personal consumption.

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Plan B: Don't Overstay Your B1/B2, Petition Instead
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(4) Given the strong economic reasons to go to the U.S. for a
temporary visit, it is unlikely that the increase in B1/B2
applications is directly related to fears about the political
situation in Venezuela. A recent validation study on visas issued
to musical, sport, and other organized groups has shown very low
rates of people staying longer than the time allotted to them by the
Department of Homeland Security (DHS) upon entry to the U.S.
Similarly, the numbers of cases sent to Embassy Caracas of people
turned back by DHS at customs and immigration are low - an average
of 18 per month in 2006, 16 in 2007 and just 7 in 2008. The latest
B1/B2 Validation Study, completed in 2008, showed a 4% overstay
rate.

(5) Post is concerned about high rates of fraud for petition-based
non-immigrant visa categories. Some petition-based visa applicants,
particularly for 'L' Intra-company Transferee visas but also H1B
Worker visas and F Student visas, appear to be using these visas as
a 'Plan B' should the political situation in Venezuela worsen. Both
applications and fraud rates in these categories have increased over
the past few years. L visas have become so questionable that all
non-blanket L1 cases in Embassy Caracas are pre-screened by the
Fraud Prevention Unit for a documentary review and analysis. During
a September 2008 visit by the Fraud Prevention Manager to 12
companies in Miami supposedly supporting petition-based visa cases,
only three were operating. Many people who apply for these visa
categories already hold valid B1/B2s and could stay in the U.S.
illegally, but prefer to obtain a visa allowing legal residence.
More detailed reporting on petition-based fraud in Venezuela can be
found in the on-line Venezuela Fraud Summary accessible via the
Consular Affairs website.

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CONCLUSION: It Still Pays to Travel, For Now
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CARACAS 00000310 002 OF 002



(6) Given high inflation rates, spending money makes more sense than
saving it in Venezuela. The BRV's de facto subsidy for
international travel, by allowing access to U.S. dollars at the
official rate, only sweetens the deal. Whether spending money on a
'dream vacation' to Orlando or on consumer products to sell in
Venezuela, B1/B2 applicants often have bona fide reasons for
temporary travel to the U.S. for business or pleasure. Fraud
concerns in Venezuela center on repeat travelers concerned about
President Chavez's growing power, who are wealthy enough to
investigate legal means to live in the U.S using increasingly
fraudulent petition-based visas. For these applicants, the February
15, 2009 approval of the constitutional amendment eliminating term
limits is likely to increase concerns about the political situation.


(7) With average prices for Venezuelan oil below 40 USD per barrel,
however, the economic advantages to traveling to the U.S. may
dramatically change in the coming months. The BRV has already
lowered the authorized amount of dollars available at the official
rate for international travelers from 5000 USD to 2500 USD per year.
Post may see high no-show rates of applicants who find that their
economic situation has altered significantly since requesting an
appointment.

CAULFIELD