United States President Donald Trump鈥檚 administration has imposed a sweeping economic embargo against Venezuela in its efforts to oust the Nicolas Maduro government.
An signed by Trump on August 5 declares all Venezuelan state assets in the US 鈥渂locked鈥, prohibiting them from being 鈥渢ransferred, paid, exported, withdrawn, or otherwise dealt in鈥 unless specific exemptions are issued by the Treasury Department. All transactions with Venezuelan state entities are likewise forbidden.
Crucially, the executive order likewise authorises the Treasury Department to issue secondary sanctions against non-US third parties deemed to have 鈥渕aterially assisted, sponsored, or provided financial, material, or technological support for, or goods or services鈥 to the Venezuelan government.
While previous executive orders had already laid the legal basis for secondary sanctions against foreign actors dealing with Venezuela鈥檚 state oil, mining and banking sectors, the present White House decree expands the blacklist to encompass all business with the Venezuelan state.
鈥淲e are sending a signal to third parties that want to do business with the Maduro regime: Proceed with extreme caution,鈥 stated US National Security Advisor John Bolton, adding that those who flout sanctions 鈥渞isk [their] business interests with the United States鈥.
Bolton made the remarks during a gathering of the 56 countries that recognise opposition leader Juan Guaido as Venezuela鈥檚 鈥渋nterim president鈥, in Lima, Peru, on August 6. President Maduro continues to be recognised by Russia, China, the United Nations and the rest of the international community.
At the conference, Bolton threatened Moscow and Beijing not to 鈥渄ouble-down鈥 in support of the Maduro administration, which he described as 鈥渘ow join[ing] that exclusive club of rogue states鈥.
Bolton likened the embargo to that imposed on the elected Sandinista government as well as the asset freezes targeting the Noriega regime in the 1980s, while the compared the stringent measures to the draconian US sanctions against Cuba, Iran, Syria and North Korea.
The executive order includes an exemption permitting transactions involving 鈥渁rticles such as food, clothing, and medicine intended to be used to relieve human suffering鈥.
However, analysts such as Torino Capital Chief Economist have warned that humanitarian exemptions have 鈥渢ended to be ineffective when applied to other countries facing similar regimes鈥.
Rodriguez had already projected that Venezuela鈥檚 economy would contract by 37% in 2019, largely as a result of previous sanctions, which economists Mark Weisbrot and Jeffrey Sachs described as a form of 鈥溾 in a recent study.
Despite the latest measures containing no provisions directly targeting Venezuela鈥檚 private sector as a whole, Rodriguez has observed that 鈥渕ost firms in the country have a significant degree of interaction with the country鈥檚 government鈥, meaning that the executive order could in practice amount to a full-scale trade embargo.
Venezuelan Vice President Delcy Rodriguez hit back at the embargo, calling it a 鈥渄angerous step towards a total asphyxiation鈥 of the country鈥檚 economy. Rodriguez went on to say that Venezuela would appeal to international bodies, while also calling for national unity. A march rejecting Washington鈥檚 escalation took place on August 7.
Foreign Minister Jorge Arreaza called on UN Secretary General Antonio Guterres and UN Human Rights Commissioner Michelle Bachelet to condemn what he termed a 鈥渉uman rights鈥 violation against the Venezuelan people. He added that Venezuela is working on an 鈥渁lternative architecture鈥 to counter US sanctions, but which would make transactions more costly.
The chair of the Russian Senate鈥檚 International Affairs Committee, Konstantin Kosachev, said on August 6 that the US policy amounts to 鈥渋nternational banditry鈥. He told Russian state news agency RIA Novosti that the move constitutes 鈥渙pen meddling into Venezuela鈥檚 internal affairs鈥.
Meanwhile, self-proclaimed 鈥渋nterim president鈥 Juan Guaido wrote on Twitter that the sanctions 鈥渟afeguarded鈥 CITGO (the US-based petroleum company majority-owned by the Venezuelan government) and its assets, as well as the Venezuelan private sector, which 鈥渄oes not do business with a dictatorship鈥. The opposition leader concluded that Washington鈥檚 latest actions 鈥渓ook to protect Venezuelans鈥.
Guaido himself 鈥渋nterim president鈥 on January 23 and was promptly backed by the US and regional allies. In the six months since, the Venezuelan opposition has repeatedly sought to oust the Maduro government, including via an attempt to force 鈥溾 across a closed Venezuela-Colombia border on February 23, as well as a failed on April 30.
The August 5 embargo follows months of escalating sanctions from the Treasury Department against key sectors of the Venezuelan economy, including , and especially oil.
Washington targeted Caracas鈥 main source of foreign currency with an in late January, while also imposing on Venezuela鈥檚 ability to import diluents and fuel. More recently, the Treasury Department sanctioned the government鈥檚 (Local Supply and Production Committees) subsidised food program.
[Reprinted from .]