Subsequently, the sanctions continued to increase. In 2017, President Donald Trump signed Executive Order 13808, which imposed restrictions on the primary market debt of the Venezuelan state oil company PdVSA, as well as on the debt obligations of the Venezuelan government. Executive Order18827 (2018) defined bans on the use of digital currencies nominated by the Venezuelan government. Executive Order 13835 (2018) expanded sanctions on government debt. Executive Order 13850 (2018) gave the authority to relevant executive agencies to impose blocking sanctions against individuals working in the gold mining sector of Venezuela. The United States responded to the political crisis in Venezuela in 2019 with new sanctions. Executive Order 13857 (2019) clarified the parameters of the state of emergency on Venezuela, and Executive Order 13884 (2019) introduced blocking sanctions against the government assets of Venezuela, which included PdVSA. Given the importance of oil export revenues for the country, a blow to PdVSA meant an inevitable reduction in export revenues and the degradation of the oil industry.
Signs of changes began to appear in 2022. In November 2022, following an agreement on negotiations between the government of Nicolas Maduro and the opposition on the 2024 elections, the United States began to reduce sanctions pressure. The US Treasury issued two general licenses that introduced some exceptions to the sanctions regime. In particular, the American company Chevron received permission to engage in the limited extraction of natural resources in Venezuela. In addition, Halliburton, Schlumberger, Baker Hughes and Weatherford got permission to conduct operations related to the support of assets in Venezuela, including those in which PdVSA was a participant. This license was renewed in May 2023.
Finally, on October 18 of this year, following the signing of a roadmap between the government and the opposition for the 2024 elections, the United States announced more widespread easing. General License No. 44 lifted restrictions on work with the oil and gas sector in Venezuela for six months, and General License No. 43 introduced similar relief for the Minerven gold mining company.
In other words, there has been a decrease in US sanctions pressure on Venezuela against the backdrop of changes in internal political processes in the country, which favour Washington’s expectations, albeit not as radical as it was in 2019. In addition, the US is interested in the world market gaining access to Venezuelan oil, taking into account the ban of supplies from Russia and uncertainty in the energy market due to political factors. At the same time, easing sanctions has its own nuances.
First of all, the US Treasury in its press release warns that the deviation of the Maduro government from the election road map at any time could lead to the return of restrictive measures. That is, the easing of sanctions is quickly reversible. This is also evidenced by the legal mechanism for mitigating them. The Presidential Executive Orders are still in force. Sanctions are mitigated in the form of general licenses, which have a short validity period. Each time they are extended will be an occasion to verify the fulfilment of US requirements and, possibly, put forward new ones. Moreover, the cancellation or non-renewal of general licenses does not require decisions at a high political level. Here, all that is needed is the signature of the director of the Office of Foreign Assets Control of the US Treasury, that is, an official approximately at the level of the director of a department of a Russian ministry.
The experience of US sanctions against the Republic of Belarus suggests that general licenses can remain a mechanism for mitigating sanctions for quite a long time and, if necessary, be cancelled. Washington has pursued a policy of sanctions against Minsk since 2006, including blocking sanctions against systemically important enterprises of the Belarusian economy. Subsequent mitigations were also carried out in the form of general licenses. After the 2020 presidential elections and the incident with the landing of a Ryanair plane, the introduced exceptions were stopped, and sanctions against Belarusian companies were renewed. Moreover, on August 9, 2021, Executive Order 14038 was issued, which expanded the range of blocking and visa sanctions.
It is obvious that in relations with Venezuela, the stakes for the United States today are growing. Washington is interested in achieving the stabilisation of the situation at least in some areas. With fire of conflict growing in Europe, the Middle East, and potentially the Asia-Pacific, success in Venezuela is important for American diplomacy. In addition, the Americans will be able to set a precedent for the success of sanctions policy, showing other target countries that sanctions are reversible in the event of a “behaviour change.” However, the success of a power transition in Venezuela is far from predetermined. Even more questionable is the possibility of the lifting of sanctions in exchange for political concessions in relations with larger players such as China or Russia. They have much more opportunities to pursue their political interests, despite restrictive measures.
From our partner RIAC