Venezuela Weekly: U.S. Reasserts Role in Venezuela Conflict

One day before an international conference on the Venezuelan crisis held in Lima, the U.S. announced a significant ramping up of sanctions on Venezuela. Despite an early interpretation of the new measures as a U.S. economic “embargo” on Venezuela (which would prohibit any commercial exchange, even with the private sector), closer analysis reveals the sanctions freeze Venezuelan government assets in the U.S. and impede any individual or commercial entity related to the U.S. financial system to do business with Maduro’s government.

The new measures exclude transactions regarding food, clothing, and medicine and spares the licenses the U.S. government has granted to some U.S. business in the oil sector to continue operating in the country. While opposition leaders argue that these sanctions will not affect the Venezuelan people, analysts suggest they will lead to more inflation and scarcities. WOLA’s Geoff Ramsey suggests that the wording of the executive order makes overcompliance likely. In other words, many international institutions and enterprises will simply avoid doing business with Venezuela in order to reduce risk of violating vaguely defined sanctions.

One intention of the sanctions seems to be to protect Citgo from debt seizure, a goal that is certainly welcomed by members of the Guaidó government. However, whether the sanctions succeed in this task will depend on the interpretation of the U.S. courts.

The new sanctions and the theatrics surrounding their announcement amount to a reassertion of the U.S. role in the Venezuelan conflict. Since Norwegian-mediated negotiations began in May, and especially since President Donald Trump seemingly derided National Security Advisor John Bolton as overly-militaristic in June, the U.S. had been relatively muted about Venezuela. Bolton said in Lima that the “the time for dialogue is over” referring to the negotiation process between the opposition and the government in Barbados. However, contrasting announcements from within the Trump administration made clear that differences persist between the State Department—which cautiously approves of negotiations—and the National Security Council—which opposes them. Overall, the sticking point for the U.S. government would seem to be the idea of Nicolas Maduro remaining in the presidency until new elections are held.

As David Smilde said here, whatever the U.S. government’s intentions, it is unlikely this will be enough to derail the Barbados talks. Indeed, Juan Guaido said the negotiations will continue, although Bolton’s strong anti-negotiation statements certainly put him on his heels in explaining why.

  • While the sanctions announcements allowed the U.S. to dominate the Lima meeting, other stake-holders withheld support. The European Union’s International Contact Group took a clear distance from the U.S. approach, in a statement after the Lima conference stated that: “the International Contact Group reaffirms its full support to the participation by the Venezuelan national actors in the ongoing talks in Barbados facilitated by the government of Norway.”
  • In contrast, opposition radicals hailed the declarations of Bolton and asked Guaidó to terminate the negotiations and proceed with the activation of Rio Treat that they think could lead to a “humanitarian” military international intervention to the country. María Corina Machado’s Vente Venezuela party even published a glowing digital poster entitled “The U.S. get’s serious.”
  • WOLA and fifteen other human rights groups from the region published a press release rejecting the measures, saying they would have significant humanitarian costs and seemed to be aimed at sabotaging the Barbados negotiations.

Armed Forces

  • Maduro continues appointing officers sympathetic to him to the high positions in the Armed Forces. He also announced the incorporation of the volunteer Militia to the professional Venezuelan National Guard. Maduro will eventually incorporate about 30 thousand militia members into the regular forces.
  • Maduro said that during 2019 the Venezuelan state security forces, including the Bolivarian National Guard (GNB), have seized more than 22 tons of drugs coming from Colombia. Maduro argues that Colombia is a “failed state” that cannot control its borders.

Human Rights

  • The Venezuelan crisis has affected the country’s educational system. Advocates have reported that over the last year schools operated between a 50-70% of the time and that 30% of the teachers have quit their jobs.

Migration

  • A presidential decree in Colombia grants citizenship to the babies of Venezuelan migrants born in Colombia since 2015, and to those who will be born in the next two years. 25,000 children are said to be stateless in Colombia as bureaucratic hurdles from the Venezuelan government prevent documentation as Venezuelan and the fact that Colombia does not conceded birthright citizenship, prevents them from being recognized as Colombian.

Economy

  • A U.S. federal appeals court’s decision last week to reject the appeal of PDVSA against mining company Crystallex’s right to seize parts of Citgo, exposed the problems created by a country with two governments. The court ruled that it accepts “as binding the U.S. President’s recognition of the Guaidó government and assumes the validity of the Guaidó government’s appointments to the PDVSA board.”
  • In a related legal battle, the International Chamber of Commerce’s arbitration tribunal has decided that PDVSA has to pay only $33.7 million, plus interest, to the U.S. oil company ConocoPhillips for the break of a contract between the two parts. ConocoPhillips’ claim was for $1.5 billion.
  • The severe economic crisis has led many Venezuelans to search for budget nutrition alternatives. But consumption of artisanal food and beverage products has lead to a significant increase in food poisoning. According to a study by the NGO Ciudadania en Acción in the last year food poisoning grew by 600%.