By Luc Cohen

NEW YORK (Reuters) – Citigroup Inc (NYSE:) blocked an attempt by Venezuelan state oil company PDVSA to make debt payments to a Siemens unit, a Citi executive testified on Wednesday in a U.S. trial over whether PDVSA is liable for the payments. 

PDVSA claims that August 2017 U.S. sanction made payment impossible in a Manhattan bench trial.

PDVSA’s January 2017 promissory notes, which were cash-strapped and paid $120 million plus interest to Dresser-Rand as well as a January 2017 promissory notice that PDVSA made available to Dresser-Rand oilfield equipment supplier Dresser-Rand. PDVSA received the initial two interest payments of $4 million. However, it failed to make the $1.9million payment due in October 2017.

U.S. District Judge Louis Stanton of U.S. District Court for New York issued a $149.5million judgment in Dresser Rand’s favor.

Raymond Romano from Citi, the chief Latin America administration officer, stated that Citi had blocked PDVSA’s attempt to send wires. “It did not satisfy our requirements for processing.”

It is clear that the PDVSA sanctions, which were meant to force Nicolas Maduro’s government to make changes to his country, have had far-reaching effects on Western businesses doing business with them.

Maduro describes the sanctions as “criminal” in his view and blames them on the country’s financial crisis.

Dresser-Rand received evidence from a Citi employee on September 25, 2017. He stated in an email that PDVSA and Venezuela had been blocked by Citi, but said it would be open to processing pre-approved transactions.

Romano claimed that DresserRand never sought pre-approval.

Dresser-Rand could support his argument that PDVSA had alternative ways of making the payment by claiming that Citi applied the PDVSA restrictions prior to August 2017, based on their own internal risk policies.

Dresser-Rand called Stephanie Rice as an expert witness. She was a former sanction compliance officer from various banks and said that the payment wasn’t in violation of any sanctions. Other banks could have also processed it.