Venezuela Targeted Sanctions Update: U.S. Appears to Give Up on Inner Circle Split

On Tuesday the U.S. government added several new names to its targeted sanctions list against Venezuelan elites, bringing the total number of Venezuelan individuals sanctioned by the United States since 2008 to 88. The latest announcement is notable in that it appears to be a firm break from an overall strategy of using sanctions to encourage a split in Maduro’s inner circle. Instead, the inclusion of key powerbrokers in the new sanctions suggests that the U.S. government has decided that these individuals have no incentive to support a transition.

Below are four clear takeaways from the latest announcement, and from the current state of U.S. targeted sanctions against Venezuelans overall. For a look at our full database of individual sanctions against Venezuelan individuals and the countries/entities that have sanctioned them, see the WOLA database of targeted U.S., Canadian, E.U., Panamanian, and Swiss sanctions.

  1. The U.S. government has “plugged” gaps in the list. The latest officials added to the sanctions list are all major powerbrokers: First Lady Cilia Flores, Foreign Minister Delcy Rodriguez, Information Minister Jorge Rodriguez, and Defense Minister Vladimir Padrino Lopez. Their prior exclusion from the list has been seen as recognition of a dynamic that we have voiced concerns about—the ability of sanctions to reduce individuals’ “exit costs,” making a break from Maduro unlikely for them. However in the absence of such a break occurring in the past several months, the Trump Administration has apparently given up on these figures playing an important role in a transition. The first step in this direction was taken in May when the U.S. government sanctioned Diosdado Cabello, an important rival of Maduro’s within Chavismo. Interestingly all of the latest individuals sanctioned by the U.S. government (the Rodriguez siblings, Cilia Flores, Padrino Lopez) were already sanctioned by the Canadian government—and in Delcy’s case by both the Canadians and Europeans—highlighting the fact that the United States has been slower to act than others in making this decision.
  2. From a “vertical fracture” to a “horizontal” one? The logic for avoiding any action that could bind the ties between Maduro and his ruling circle is relatively straightforward. It relies on the idea of a “vertical fracture,” or a split that runs vertically between two factions of elites in government. The latest targeted sanctions effectively put the elites of Maduro’s inner circle in the same camp, suggesting that the Trump Administration has ruled out the possibility of such a fracture. Instead recent developments suggest that the Trump Administration is now betting on some kind of “horizontal fracture,” or one that pits lower-ranking figures against elites. This would explain why U.S. officials have met with rebellious military officers, and why the share of active security force personnel that have been sanctioned has shrunk under Trump. But aside from being counterproductive, efforts to create such a horizontal fracture so far have failed dramatically. The Maduro government has demonstrated a clear ability to crack down on dissent within the armed forces, and deftly dismantled coup attempts meant to take place in March and May of this year.
  3. These sanctions are paired with clearer communicated conditions. As we have written, U.S. targeted sanctions have differed from other sanctions imposed by the Europeans, Canadians, and others in that the U.S. government has not emphasized the conditions under which the sanctions can be lifted. We’ve recently have noticed a change in the U.S. discourse on this front. Both the State Department and Treasury announcements of Tuesday’s sanctions include the following language:

“U.S. sanctions need not be permanent; they are intended to change behavior. The United States would consider lifting sanctions for persons sanctioned under E.O. 13692 that take concrete and meaningful actions to restore democratic order, refuse to take part in human rights abuses and speak out against abuses committed by the government, and combat corruption in Venezuela.”

This is important because we know that outlining the conditions under which sanctions can be lifted, and clearly communicating them to the intended targets, maximizes the measures’ effectiveness. The inclusion of this language in today’s sanctions announcement follows similar remarks made by Alexis Ludwig, U.S. Deputy Chief of Mission to the Organization of American States (OAS). In a September 5 Permanent Council meeting on Venezuela, Ludwig also emphasized that U.S. sanctions “need not be permanent,” adding that they could be lifted “in response to positive, significant, and sustained behavior changes by the government.”

  1. Sanctions increasingly linked with corruption. In the latest round of targeted sanctions, the U.S. government has attempted to more clearly link the measures with public corruption. The sanctions against the four ruling circle members were paired with further information about Diosdado Cabello’s alleged corruption network. Specifically, OFAC identified a private jet based in Florida that was purchased through supposed Cabello frontman Rafael Sarria, who is accused of hiding his purchase of the jet through various other shell companies and individuals. As the Associated Press reported earlier this week, this appears part of a larger strategy by the U.S. Treasury Department to bring Venezuelan corruption networks (particularly ones that involve food trafficking) to light alongside financial investigators from Mexico, Colombia, and Panama.