The United States government issued new sanctions against the Maduro regime, this time aimed at undermining the regime’s ability to finance its operations. Unlike previous rounds of sanctions which targeted regime officials like Maduro, vice president Tareck El Aissami and high-profile cabinet ministers, today’s sanctions instead take direct aim at some of the financial mechanisms that are helping to keep the regime afloat.
The sanctions bans US institutions and persons from trading in debt bonds involving PDVSA and the Government of Venezuela. In other words, PDVSA and the government of Venezuela will not be able to raise money by selling bonds to investors, which is a common technique used by governments the world over to earn capital.
Speaking during a press conference this afternoon, US Treasury Secretary Steven Mnuchin summarized the goal of the sanctions by saying:
Maduro may no longer take advantage of the American financial system to facilitate the wholesale looting of the Venezuelan economy at the expense of the Venezuelan people.
With today’s sanctions, Washington has signaled a willingness to intensify pressure on the Maduro regime by striking its coffers directly.
Regime, Opposition React to Sanctions
Minister of Foreign Affairs Jorge Arreaza reacted to the news of the sanctions by saying:
These financial sanctions announced today are the worst aggressions to Venezuela in the last 200 years maybe. … Maybe after the Spanish empire was defeated by our liberators.
These sanctions are surgical and effective, [and have] a strong financial, commercial and political impact.
Machado also accused Maduro of “underestimating the international community like he underestimated the Venezuelan people”.
The National Assembly also issued a response to the sanctions. The legislative branch applauded the sanctions as an inevitable consequence of the regime’s continued drive towards dictatorship, saying:
The sanctions announced by the United States are a consequence of Maduro’s and his [elite regime officials’] refusal to respect the calls for change from the people (…) Maduro has taken on the task of fighting with every country in the world and to not look for the necessary solutions to move forward as a country.
They [the regime] destroyed the country, deny the responsibility of being the cause of the crisis, and do not recognize that the sanctions are a product of their own mistakes….
Maduro Blames Opposition for Sanctions, Promises “Historic Trial”
Maduro reacted to news of the sanctions by blaming the Venezuelan opposition for bringing them about, and ordering a “historic trial” to punish those found to be responsible for the measures. During a televised speech, Maduro said:
I’ve asked the president of the Supreme Court and the president of the National Constituent Assembly to star a historic trial for treason against the fatherland against all those who have asked for these economic sanctions that have been placed today and that will harm or economic life.
It is not clear who Maduro believes called for the sanctions.
Attempting to argue that the sanctions were placed to punish the entire country rather than his regime, Maduro said:
Venezuela hasn’t messed with anyone to get these aggressions [sic], these threats that have been promoted by the treacherous right wing. You have to be a big traitor against the fatherland to ask for sanctions against your own country.
Maduro also appeared willing to attempt to circumvent the sanctions by dealing directly with bond holders, saying:
Attention, debt holders: I’m calling you to a meeting next week with the vice president of finance, Ramon Lobo, in order to look for solutions to the damage that Donald Trump has done to bond holders.
Because the sanctions place a blanket ban on all US institutions and persons from engaging in bond-related financial activities with the regime, Maduro’s suggestion is unfeasible.
Maduro also suggested that President Trump may not understand the nature and extend of the measures, saying:
Trump has damaged the US financial sector. Has anyone told President Trump that? I could be the one to tell him, but he doesn’t pick up the phone. If he’d pick up the phone I would explain it to him. Or I should him [the explanation] in a letter.
In an attempt to downplay the severity of the sanctions, Maduro said:
The Revolution has economic capacity, financial capacity, and Venezuela has economic capacity and financial power. A couple of imperalists won’t be able to defeat us, neither today nor ever.
US Courts Rules Against Venezuela in $1.4 Billion Case
A US court ruled in favour of Crystallex, a Canadian mining firm, in a case dating back to 2008 involving the nationalization of the company’s assets in Venezuela. According to the decision–which was originally issued in July 26 but was not made public until today–Crystallex may collect $1.2 billion plus $200 million in interest from a bank account belonging to the government of Venezuela in the Bank of New York Mellon Corp.
In September 2008, President Hugo Chavez ordered the seizure of the country’s largest gold mine, which was owned and operated by Crystallex. The reason for the nationalization had to do with financial difficulties Venezuela faced at the time which Chavez sought to alleviate by taking over Crystallex’s assets.
The case, which has been in litigation for years, also resulted in the World Bank’s International Centre for Settlement of Investment Disputes ruling in favour of the Canadian company in April of last year.
Maduro Reminds Venezuelans 2018 Presidential Election May Not Happen as Scheduled
Days after promising that the 2018 presidential election would happen even if the United States were to invade Venezuela, Maduro reminded Venezuelans today that this may in fact not be the case.
During today’s televised address, Maduro said that the Constituent Assembly may decide to change the date of the election “if it believes it to be correct”, and that as the most powerful entity in the country there is nothing that any individual or institution could to do prevent the change from happening.
In a particularly disjointed segment of his speech, Maduro said that the election would still take place in December of next year but then quickly corrected himself and appeared to suggest that the date may be changed. Maduro explained:
… or when the National Constituent Assembly decides [to hold the election]. If it believes it to be correct to set a new date or a new month [sic], we are ready to compete and to win the presidential election when they set them for 2018.
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