US President Donald J. Trump signed on Friday an Executive Order imposing new financial sanctions on what the White House described as the “dictatorship in Venezuela.”
Trump’s new action prohibits dealings in new debt and equity issued by the government of Venezuela and its state oil company PDVSA. It also prohibits dealings in certain existing bonds owned by the Venezuelan public sector, as well as dividend payments to the government of Venezuela.
The White House said that to mitigate harm to the American and Venezuelan people, the Treasury Department is issuing general licenses that allow for transactions that would otherwise be prohibited by the Executive Order. These include provisions allowing for a 30-day wind-down period; financing for most commercial trade, including the export and import of petroleum; transactions only involving Citgo; dealings in select existing Venezuelan debts; and the financing for humanitarian goods to Venezuela.
The US, and many other countries, has been critical of the elections that Venezuela held in July to approve a new government body, the National Constituent Assembly. The National Constituent Assembly is now responsible for rewriting the country’s constitution. The results of that election have been labelled as being “illegitimate,” with various countries saying that they won’t recognize the National Constituent Assembly, whose members support Venezuela’s President Nicolas Maduro, and which is aimed at replacing the National Assembly that is led by the opposition.
In Friday’s statement, the White House said, “The Maduro dictatorship continues to deprive the Venezuelan people of food and medicine, imprison the democratically-elected opposition, and violently suppress freedom of speech. The regime’s decision to create an illegitimate Constituent Assembly—and most recently to have that body usurp the powers of the democratically-elected National Assembly—represents a fundamental break in Venezuela’s legitimate constitutional order.”
According to the White House, “In an effort to preserve itself, the Maduro dictatorship rewards and enriches corrupt officials in the government’s security apparatus by burdening future generations of Venezuelans with massively expensive debts. Maduro’s economic mismanagement and rampant plundering of his nation’s assets have taken Venezuela ever closer to default. His officials are now resorting to opaque financing schemes and liquidating the country’s assets at fire sale prices.”
Vice President Mike Pence has said that in Venezuela, “we’re seeing the tragedy of tyranny play out before our eyes.”
According to the White House, the new measures “are carefully calibrated to deny the Maduro dictatorship a critical source of financing to maintain its illegitimate rule, protect the United States financial system from complicity in Venezuela’s corruption and in the impoverishment of the Venezuelan people, and allow for humanitarian assistance.”
The White House stressed that it is not alone in condemning the Maduro regime. “Through the Lima Declaration of August 8, our friends and partners in the region refused to recognize the illegitimate Constituent Assembly or the laws it adopts. The new United States financial sanctions support this regional posture of economically isolating the Maduro dictatorship.”