President Trump issued an executive order late Monday placing a full economic embargo on the Venezuelan government of President Nicolás Maduro, and his administration warned Russia and China that if they continue to support him, they may never get back their billions of dollars in loans and investments in Venezuela.
The embargo, which follows months of escalating sanctions on government individuals and entities, blocks all property and assets of the government and its officials, and prohibits any transactions with them, including the Venezuelan Central Bank and the state oil company.
The action puts Venezuela on par with Cuba, Iran, North Korea and Syria, the only other countries under a similar full embargo.
White House national security adviser John Bolton is to give a speech outlining the measure Tuesday at a meeting of international supporters of Juan Guaidó, whom they recognize as Venezuela’s interim president. The meeting is being held in Lima, Peru.
In January, as Maduro began a second five-year term in office, more than a dozen countries in the hemisphere declared his reelection illegal. Within days, those countries followed the United States in recognizing Guaidó, head of the opposition-controlled National Assembly, as Venezuela’s legitimate leader.
Guaidó has struggled to gain traction for the opposition against strong repression by Maduro’s still-loyal security forces. In the meantime, there is a blanket freeze on all official Venezuelan assets in this country and a prohibition against any transactions with the regime.
The embargo comes at a time when Venezuela is already collapsing and when previous U.S. sanctions have made a bad situation worse. Oil production has fallen to levels not seen since the 1940s, due to long-term mismanagement but also because of a ban on shipments to the United States imposed this year that robbed Venezuela of its single largest source of hard currency.
More than 4 million people have fled, most of them into neighboring South American countries. In addition to severe shortages of food and medicine, the United Nations reported last month that thousands of Venezuelans have been victims of “torture and ill-treatment, sexual violence, and killings and enforced disappearance.”
In a letter to House Speaker Nancy Pelosi (D-Calif.) Monday night, Trump said the freezing of assets was necessary “in light of the continued usurpation of power by the illegitimate Nicolas Maduro regime, as well as the regime’s human rights abuses, arbitrary arrest and detention of Venezuelan citizens, curtailment of free press, and ongoing attempts to undermine” Guaidó.
Trump hinted at the move last week, telling reporters who asked whether he was considering a “blockade” against Venezuela: “Yes, I am.” News of the executive order was first reported by the Wall Street Journal.
Venezuela’s security services are supported by Cuba. China has extended massive loans to Maduro, as has Russia, which has extended credit in exchange for ownership of Venezuelan energy assets including oil and natural gas fields.
Bolton, speaking to reporters Monday in Lima, warned China and Russia that continuing support “could affect repayment of their debt after Maduro falls.”
The order also imposes sanctions on anyone found “to have materially assisted, sponsored, or provided financial, material or technological support for, or goods or services to or in support of” any person under sanctions.
“I think that the intention of the order is to give the U.S. government the ability to apply the law beyond our shores, specifically to China, Russia, Turkey and Cuba, by allowing seizure of the assets of any foreign bank or company that does business with the Venezuela regime,” said Russ Dallen, Florida-based managing partner of brokerage Caracas Capital Markets.
The near-bankrupt government has sold off gold — much of it to Turkey — and other assets in an effort to remain afloat but has nowhere near the resources required to confront serious structural problems, including massive, nationwide power and water shortages. Venezuelans are also facing record hyperinflation that has broken supply chains and made food, medicine and other basic goods increasingly impossible to afford.
An estimated 5,500 Venezuelan migrants continue to pour out of the country each day, many of them so undernourished that aid groups are increasingly concerned about the onset of near famine-conditions within Venezuela.
Since a failed attempt to oust Maduro in April, the opposition has sought to regroup. Several rounds of political dialogue with the government have taken place, with Maduro’s opponents demanding presidential elections and the creation of conditions for a free and fair vote.
People familiar with the talks said they have made progress. But an accord has yet to be struck, and the talks themselves — sponsored by the government of Norway, with the most recent session held last week in Barbados — remain mired in controversy and complications, with some opposition leaders as well as the Trump administration distancing themselves from the dialogue. Should any agreement ultimately be reached, it remains unclear whether it would win broad backing either within or outside Venezuela. “Every time a round of dialogue is coming, the government of the United States perversely comes out to make decisions, like it did this week, illegal decisions. Stupid decisions, about supposed sanctions because they think that because of a sanction we will tremble. The American imperialism wants to sabotage the dialogue table and we will not permit it,” Maduro said.
One of the key sticking points remains the fate of Maduro. Some have argued that he could potentially remain in office, or at least stay in the country, while new elections are held and could perhaps even run — a notion many, including the Trump administration, have scoffed at. The blockade appears to be yet another attempt by the administration to heighten the cost of Maduro’s tenure, and perhaps force deeper cracks within his inner circle.
Bolton said Monday that the ongoing talks are “not serious.”
Seemingly referring to previous U.S. sanctions announced last week on business executives who have profited from corruption linked to his government, Maduro, in a televised speech Friday, blamed the United States for trying to sabotage the negotiations.
Faiola reported from Miami. Rachelle Krygier contributed to this report.