Venezuelan Daily Brief

Published in association with The DVA Group and The Selinger Group, the Venezuelan Daily Brief provides bi-weekly summaries of key news items affecting bulk commodities and the general business environment in Venezuela.

Thursday, October 27, 2016

October 26, 2016

International Trade

MERCOSUR to discuss enforcement of democratic clause against Venezuela

The Common Market of the South (MERCOSUR) will hold a meeting "in the upcoming days" to discuss whether the democratic clause should be enforced against Venezuela, informed Uruguayan President Tabaré Vázquez at a press conference, along with his Argentinian counterpart Mauricio Macri. "As for the democratic clause, MERCOSUR has to hold a meeting to discuss the matter, and Uruguay will attend that meeting and it is going to discuss it with the integrity and responsibility we seek to prosecute in our governance," said Vázquez, who specified neither date nor place of the meeting. For his part, President Macri noted that both Uruguay and Argentina were “very concerned about how things have worsened” in Venezuela. "Under these terms, Venezuela cannot be part of Mercosur,” and added that this country has to be "deplored by all American nations and the entire world" as "human rights are not being respected." (El Universal,


Oil & Energy

Venezuela winning bondholder relief as 39% accept PDVSA swap

Petroleos de Venezuela SA, maneuvering to repay a ballooning debt load, says that creditors holding US$ 2.8 billion of bonds have agreed to extend maturities after weeks of tense negotiations that included dire warnings from Caracas of a possible financial collapse. The deal, while far short of the US$ 5.325 billion that PDVSA had been seeking to exchange, was still seen as significant enough to win the state-run oil giant the relief it needs to continue servicing its debts for the time being. Notes from the company and Venezuela’s government surged after the announcement. The deal comes at a hefty cost. While the country’s oil minister touted it as a victory for the “fatherland,” Venezuela had to pawn one of its most attractive assets -- CITGO Petroleum Corp., the U.S. unit of PDVSA -- to persuade investors to accept the deal. Years of declining output and a crash in oil prices have left PDVSA and the government, which relies on crude for almost all its hard currency income, struggling to find enough cash to make payments and import basic necessities. (Bloomberg,; El Universal,



Agriculture Ministry, NESTLÉ sign agreement to expand production

Venezuela’s Agriculture and NESTLÉ have signed an agreement to create 1500 direct and indirect jobs and substitute imports worth US$ 15 million through investments seeking to increasing production in 30 items, including milk, cocoa, rice, fruit and fruit pulp. More in Spanish: (El Universal,


Economy & Finance

U.S. said to be closing in on PDVSA-linked seizures

U.S. Federal prosecutors are preparing to charge several individuals and confiscate their property over the alleged looting of Venezuela’s state oil company in what may amount to one of the biggest asset seizures in U.S. history. Three people familiar with the case say the government has been investigating at least a dozen Venezuelans and is expected to file charges in Houston against a few of them as soon as next month. Those on the list, including former executives of Petroleos de Venezuela SA, known as PDVSA, are suspected of having taken bribes from middlemen to award contracts at inflated prices, helping to siphon more than US$ 11 billion out of the country. All three people spoke on condition of anonymity because the investigation is ongoing and sensitive due to its impact on U.S. foreign policy. The government has set its sights on a number of U.S. assets, including about 20 residential properties, some in West Palm Beach and the Houston suburbs. Switzerland has seized US$ 118 million in assets from Swiss banks related to the matter and sent US$ 51 million to U.S. authorities, Bloomberg reported on Tuesday. Venezuela’s opposition-run congress is separately seeking to recover US$ 11.3 billion that went missing from PDVSA between 2004 and 2014 while Rafael Ramirez, currently Venezuela’s ambassador to the United Nations, was company president. It seeks to hold him politically responsible. Ramirez has rejected the congressional accusations as lies. Investigators are also looking at the dealings involving PDVSA and a number of companies, including Pratt & Whitney, General Electric and Rolls Royce Holdings, as well as ProEnergy Services, a Missouri-based firm. The prosecutors have been tracking money that flowed through Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co., they added. The people under investigation include current Venezuelan government officials, prominent businessmen and individuals suspected of involvement with cocaine trafficking, two of the people said. Homeland Security Investigations, the Drug Enforcement Administration and the FBI are all involved in the investigation, which has been under way for at least three years and looks at activity going back to 2005.  The investigation comes at a time when the cost of corruption is vividly apparent in Venezuela’s crumbling economy. A former finance minister, Jorge Giordani, has said that as much as US$ 300 billion was embezzled from Venezuela in the last decade through high-level corruption. The U.S. has a strong legal interest in the case because the allegedly ill-gotten money passed through its banks and was used to buy property here. The people under investigation have been linked to billions of dollars of gains, much of which was transferred to offshore accounts in Panama, the people said. (Bloomberg:


Central Bank orders higher denomination currency

It has been reported that Venezuela’s Central Bank has ordered a VEB 1000 coin and currency bills denominated at VEB 5,000; 10,000 and 20,000 for delivery toward the end of this year due to inflationary pressure here, which the International Monetary Fund expects will close at 700% by year end. More in Spanish: (El Universal:


Venezuelan foreign debt only payable in foreign currency, says Rodriguez of TORINO

Converting foreign currency bonds to local currency would of course be an event of default under the terms of the bond indentures and would trigger Credit Default Swaps,” said Francisco Rodríguez, Chief Economist of TORINO Capital, in reference to a claim filed by company Corporation XT 46 with the Supreme Tribunal of Justice (TSJ). “The claim argues that Article 128 of the Law on the Central Bank (of Venezuela), which stipulates that payments in foreign currency must be made in a currency of legal tender at the place of payment, allows (state-run oil company Petróleos de Venezuela) PDVSA to pay in bolivars the coupons and amortizations of its foreign currency bonds,” according to Rodríguez’s report. “Coming as it did on the eve of Friday’s (since extended) deadline for PDVSA’s exchange offer for its two issuances due on 2017, and given that the claim explicitly referenced these issuances (as well as the Pdvsa 2016 bonds due October 28), the news generated concern that the government may have been looking for ways to avoid upcoming payments (…),” the economist noted. (El Universal,


Politics and International Affairs

Enraged Venezuela opposition escalates anti-Maduro protests

Venezuela's increasingly militant opposition stepped up its push to remove leftist leader Nicolas Maduro on Wednesday with rallies that drew hundreds of thousands of protesters and calls for a general strike and march on the presidential palace. Enraged by last week's suspension of their push for a referendum to remove Maduro and determined to end 17 years of socialism here, Venezuela's opposition has sharply ramped up its tactics in recent days.  Maduro, the unpopular 53-year-old successor to Hugo Chavez who has presided over an unprecedented economic crisis, accuses the opposition of seeking a coup with U.S. help. "They are desperate, they have received the order from the north to destroy the Venezuelan revolution," he told a counter-march of red-shirted government loyalists. After launching a political trial against Maduro on Tuesday in the National Assembly, the opposition coalition held nationwide marches dubbed "Takeover of Venezuela" on Wednesday. "This government is going to fall!" crowds chanted, many wearing white and waving national flags as they filled one of Caracas' main highways.  Protesters clashed with security forces in several cities across Venezuela, including the volatile western town of San Cristobal that was an epicenter of violence during 2014 anti-Maduro protests. Opposition leaders said there were dozens of injured, with two protesters reportedly struck by bullets in the Western city of Maracaibo near Colombia. Both were hospitalized and expected to recover.  Coalition leaders called for a national strike for Friday, and a Nov. 3 march to the Miraflores presidential palace in Caracas, unless the election board allows the referendum.  In apparent tactics to impede the opposition demonstrations, authorities set up roadblocks and closed some underground metro stations in Caracas. Reuters journalists in several cities reported big crowds at the opposition rallies, especially in the capital, collectively numbering hundreds of thousands. Wary of trouble, many businesses stayed shut and some parents kept children away from school. In the restive city of San Cristobal, masked protesters threw rocks and petrol bombs in clashes with security forces and attacked the local headquarters of the electoral council.  Maduro convened a special Committee for the Defense of the Nation at the presidential palace to analyze the National Assembly's actions against him and a tentatively scheduled dialogue with the opposition this weekend. National Assembly head Henry Ramos, a veteran politician who swaps insults with Maduro almost daily, declined an invitation to attend. "Here's his chair, empty again," said Maduro, urging participation in talks supported by the Vatican, regional bloc UNASUR and various ex-heads of state. Opposition leaders, however, said they would not attend talks until the government allowed the referendum process to continue. (Reuters:


National Assembly votes to put President Nicolas Maduro on trial; military brass backs him

Venezuela’s opposition-led National Assembly voted on Tuesday to put President Nicolas Maduro on political trial, but the legislature’s dwindling power means the decision will likely have no practical effect. The vote was an attempt to put new pressure on Maduro a day before the opposition planned a show of force on the streets. The legislature charged Maduro with abandoning the presidency and carrying out a coup against the Constitution. “Let him respond for the actions that have destroyed, broken, denied the right to choose in a democracy,” said Julio Borges, the leader of the Assembly’s opposition bloc. In response to the vote, Edwin Rojas, a lawmaker from Maduro’s Socialist Party, said, “This is a cheap copy of impeachment.” Referring to the impeachment of former President Dilma Rousseff of Brazil, he added, “We are not Brazil.” Venezuela’s political turmoil has grown more intractable by the day, with the opposition reacting furiously to a decision by the Electoral Council last week that blocked a drive for a referendum to recall Maduro. The referendum has been seen as the most effective legal avenue to challenge Maduro’s increasingly autocratic rule, which many Venezuelans blame for the collapsing economy. Polls have shown that an overwhelming majority of Venezuelans would vote to remove him. Addressing a crowd outside the presidential palace on Tuesday, Maduro disregarded the Assembly vote. Instead, he blamed President Obama for Venezuela’s political standoff. “These attacks from the right are an attack by Obama because he is close to leaving,” Maduro said. He also invited the opposition president of the National Assembly, Henry Ramos Allup, to meet with him and other members of the government. As he spoke, the crowd chanted, “Dissolve the Assembly!” Maduro has just returned from a five-day trip overseas, where he met on Monday with Pope Francis and early Tuesday with the incoming secretary general of the United Nations, António Guterres. The Vatican has been attempting since May to mediate between Venezuela’s government and the opposition, and it appeared to have made a breakthrough on Monday, when the pope’s special envoy to Venezuela, Archbishop Emil Paul Tscherrig, said both sides would begin a dialogue on Sunday. But leading opposition figures said they would not take part in the session, suggesting instead that the government wanted to buy time by agreeing to discussions. “In a possible dialogue, the opposition has nothing to offer, only to demand,” Ramos Allup said. As the crisis mounted, the army came down squarely in support of Maduro. Defense Minister General Vladimir Padrino Lopez, in a rare televised address, accused congress of trying to promote instability and said the country’s armed forces would uphold the rule of law here. Congress’s “real intent is nothing less that to gravely affect the institutionality of the country through chaos and anarchy,” he said in a prepared statement. “They want to overthrow the lawfully established government of Nicolas Maduro Moros, who for us is not partial to politics but rather the constitutional president and commander in chief of the Bolivarian Armed Forces, with supreme authority and to whom we reiterate our unconditional loyalty and unwavering commitment.” (The Wall Street Journal:; Reuters,; Bloomberg,


Pope urges Maduro to alleviate people's suffering

President Nicolas Maduro made a surprise visit on Monday to Pope Francis, who urged the embattled leader to alleviate people's suffering and negotiate with the opposition to solve his country's crisis. The private, evening meeting took place in the framework of the "worrying" situation in Venezuela which was "weighing heavily on the entire population", a Vatican statement said. It said the pope had urged Maduro to "courageously take up the path of sincere and constructive dialogue to alleviate the suffering of the people, most of all the poor, and to promote a climate of renewed social cohesion, which will allow people to look to the future of the nation with hope".  (Reuters,;; Bloomberg,; El Universal,


Papal Representative announces start of a dialogue; opposition says no talks without recall referendum

The Pope’s Special Representative, Monsignor Emil Paul Tscherrig, announced that President Nicolas Maduro’s government and the opposition MUD alliance agreed to initiate a dialogue next week in pursuit of a solution to this nation’s political crisis. The agreement to begin talks emerged from a meeting of the parties under the auspices of the Union of South American Nations (UNASUR), through the former presidents of the Dominican Republic, Leonel Fernandez, and Panama, Martin Torrijos, and former Spanish President Jose Luis Rodriguez Zapatero, the papal representative said. But opposition leaders balked at the terms of the announcement. "No dialogue has begun in Venezuela," said two-time presidential candidate Henrique Capriles. "These devils want to use the good faith of Pope Francis to buy more time." The opposition Democratic Unity coalition's major parties mostly said they would not be engaging in the talks unless the recall referendum process is reinstated. They also demanded that any talks be held in Caracas, not Margarita Island as originally proposed. The secretary general of the opposition coalition, Jesus Torrealba, who met Monsignor Tscherrig, said that while talks are important and Papal mediation has been sought by them, "it can't continue to be a strategy for the government to gain time".  Capriles later emphasized that he is willing to discuss how to solve the nation’s problems, saying: “If I have to meet with the devil, I would do so, with witnesses, with the Vatican”; and emphasized that he distrusts government representatives and those from UNASUR, particularly Rodríguez Zapatero; and would ask for conditions such as incorporating other heads of state, such as Spain’s Felipe Gonzalez; clear rules and a clear agenda that includes restoring the Constitution, freeing political prisoners,  accepting humanitarian aid, access for media and calling up a recall vote. “The opposition has nothing to negotiate. The government calls for talks because it is drowning…Talks are not to save Maduro and his regime”. He said that through talks he could agree to new general elections, through a Constitutional amendment, “Signed, because one cannot believe anything from those people, and endorsed by the people.” (Latin American Herald Tribune,; El Universal,; Reuters,; BBC News:; and more in Spanish: El Nacional,


Head of Roman Catholic Bishops Conference says talks have not begun

Monsignor Diego Padrón, Chairman of Venezuela’s Roman Catholic Bishops Conference, says that talks between the government and its opposition have not yet begun. He said that on Sunday, October 30th there may be a meeting to set an agenda. He added that the Vatican continues to explore what disposition there is on both sides towards talks, and emphasized that talks cannot replace the people’s right to revoke President Maduro. More in Spanish: (Noticiero Venevision:


UNASUR praises talks in Venezuela, calls for more democracy

The Union of South American Nations (UNASUR) on Monday embraced the decision made by the Venezuelan government and the opposition to engage in talks, adding that political crisis may be solved only with more democracy. In a communiqué, Colombian ex-President and UNASUR’s Secretary General Ernesto Samper said that “today more than ever, it makes sense to call on all Venezuelans to find, through dialogue, the solution to differences that have them confronted with each other”. Likewise, Samper pointed out that the decision made by the National Electoral Council (CNE) to halt the collection of signatures for a recall vote against the term in office of President Nicolás Maduro could have intensified the differences. (El Universal,


HRW calls for international pressure in Venezuela’s humanitarian crisis

Human Rights Watch is urging “strong international pressure,” in particular from the countries of the Americas, to get the Nicolas Maduro government to take “immediate measures” to deal with the “profound humanitarian crisis” in Venezuela, according to a lengthy report released Monday. “The Venezuelan government has seemed more vigorous in denying the existence of a humanitarian crisis than in working to resolve it,” said HRW Americas director Jose Miguel Vivanco. “Its failures have contributed to the suffering of many Venezuelans who now struggle every day to obtain access to basic health care and adequate nutrition,” he added. In preparing the report, in which HRW denounces the “severe shortages” of medicines and food in Venezuela, as well as the “inadequate and repressive” government response, the human rights organization last June interviewed more than 100 people in Caracas and six Venezuelan states and visited several public hospitals. (Latin American Herald Tribune,; El Universal,


The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.

Monday, October 24, 2016

October 24, 2016

International Trade

Imports are down 40% from last year

Despite reports by the Port Authority that in August-October 1,562,426 tons of food from Brazil, Mexico, Jamaica and Colombia have arrived here, Felix Jiménez, President of the Puerto Cabello Chamber of Commerce called this insufficient to supply demand because imports have dropped 40% as compared to 2015. He says high costs have also made products inaccessible to consumers. Eduardo Quintana, President of the La Guaira Chamber of Commerce says increased imports are an attempt to fill store shelves, but have failed “each day there are more people rummaging through garbage for food”, He adds that 90% of all imports go to state agencies, and only 10% to the private sector. Quintana added that “the private sector is importing food at the request of some governors. That is not the solution. The situation will not be solved unless there is production”. Bolipuertos has reported that in two months they have received: 465,010 tons of wheat; 362,074 tons of yellow corn; 293,637 tons of rice; 150,000 tons of white corn; 120,000 tons of sugar; 19,994 tons of soy flour; 16,300 tons of barley; 5,932 tons of white beans; 4,177 tons of powdered milk; 2,994 tons of black beans; 1,404 tons of coffee; 880 tons of frozen beef; 930 tons of processed pasta; 198 tons of pasta; 979 head of cattle. More in Spanish: (El Nacional:


Cargo that has arrived at Puerto Cabello:

  • 30,000 tons of sugar for state agency CASA
  • 2,948 tons of white beans
  • 880 tons of black beans
  • 418 tons of beef
  • 222 tons of whole milk
  • 220 tons of pasta
  • 110 tons of medication
  • 396 tons of sanitary napkins
  • 308 tons of toilet paper, all consigned to state agency CASA
More in Spanish: (Agencia Venezolana de Noticias;


Over 830 tons of food and basic products arrived from Jamaica arrived at El Guamache port in Margarita Island, including pasta, sugar, milk, cooking oil, white rice, sanitary napkins, soap, cosmetics, and other personal care products. More in Spanish: (Bolipuertos,; Agencia Venezolana de Noticias;


Venezuelan economic aid to Nicaragua down 10.9% first half 2016

Venezuela’s oil loan-centered cooperation with its traditional ally Nicaragua fell by 10.9% during the first half of 2016 as compared to the same period last year, according to the Central Bank of Nicaragua (BCN). The drop followed a 43.8% decrease in 2015 from 2014, when Venezuelan cooperation hit US$ 661.9 million, according to official numbers. Venezuelan cooperation funds, which have added up to US$ 4.65 billion since Nicaraguan President Daniel Ortega took office in January 2007, are administered outside domestic budget laws, a move criticized by many here. (El Universal,


Logistics & Transport

AVIANCA has restored service to Venezuela after plane incident

AVIANCA has restored service to Venezuela It had suspended after its Boeing 787, which was flying from Madrid to Bogota with 248 passengers on board, was harassed by a Venezuelan military plane, nearly resulting in a mid-air collision. The crew of the Colombian airliner contacted Bogota to report the proximity of another aircraft, which was following it so close that the Traffic Collision Avoidance System was activated in the AVIANCA aircraft. Colombian Defense Minister Luis Carlos Villegas discussed the incident with Venezuelan counterpart Vladimir Padrino and Foreign Minister Delcy Rodríguez said President Maduro had ordered an investigation into the matter. Colombian President Juan Manuel Santos issued a statement calling for calm and said all was settled. (Latin American Herald Tribune,; Bloomberg,; Reuters,; and more in Spanish: Noticiero Venevision:;


Low cost COPA airline to service Caracas

COPA Airlines will launch a low cost airline called WINGO that will include Caracas in its service route, along with Cancún (México), Havana, Aruba, Punta Cana (Dominican R.), Mexico City, San Andrés (Colombia), Panamá, Quito, and Cartagena. More in Spanish: (El Mundo,


Oil & Energy

PDVSA gets US$ 2.8 billion of US$ 7.1 billion in holders to extend

State oil company Petroleos de Venezuela, S.A. (PDVSA) today announced that the offers to exchange its 5.250% Senior Notes due 2017 and 8.50% Senior Notes due 2017 for new 8.50% Senior Secured Notes due 2020 secured by 50.1% of CITGO has closed. As total consideration to be paid for the validly tendered Existing Notes pursuant to the Exchange Offers, PDVSA will issue an aggregate principal amount of approximately US$ 3,367 million of New Notes on the Settlement Date, subject to rounding adjustments as set forth in the Offering Circular and as adjusted for any delays in processing tender instructions. Investors tendered approximately US$ 2,799 million of the US$ 7.1 billion of the 2017 bonds, which is approximately 39.43% of the aggregate principal amount outstanding.  "The Company intends to waive any conditions to the Exchange Offers," PDVSA said, meaning that they were accepting less than the 50% they were requiring. Last week, oil giant ConocoPhillips filed a lawsuit against PDVSA and CITGO trying to block the use of CITGO as collateral, calling it a "fraudulent transfer" to avoid their creditors. CRYSTALLEX -- owed US$ 1.4 billion -- has also alleged the same fraud in its suits against Venezuela, PDVSA and CITGO. Venezuela and PDVSA must pay US$ 1.8 billion this month and US$ 3 billion next month in debt interest and maturities. Half of the US$4 billion in PDVSA 8.5% of November 2, 2017, must be paid this November 2 unless the swap is successful in reducing that number. (Latin American Herald Tribune:


Maduro on whirlwind Mid East tour to try to bolster oil prices

President Nicolas Maduro has so far visited Azerbaijan, Iran, Saudi Arabia and Qatar in a whirlwind tour aimed at bolstering international oil prices. He met with Azeri President Iham Aliev; and Iran’s President Hasan Rohani, who declared his nation will support any measure that aims for “stabilizing oil markets, fair price and equitable quotas for producers”. He then travelled on to Saudi Arabia where he held a meeting with Crown Prince Mohamed Bin Nayef, which Maduro called “positive” and said he was “more optimistic than ever, we are closer to an agreement than ever”. Maduro then moved on to Qatar, where he was met by Economics Minister Sheik Ahmed bin Jassim Al Thani. His travelling party includes his wife, Cilia Flores; Foreign Minister Delcy Rodríguez, Oil Minister Eulogio Del Pino; Information Minister Ernesto Villegas, and the Secretary of the Presidency, Admiral Carmen Melendez. Maduro says he will also attend the OPEC meeting scheduled to be held in Vienna on November 28-29th to seek an agreement. More in Spanish: (Agencia Venezolana de Noticias;; Noticiero Venevision:;


Hooded gunmen threatened Venezuela congressional committee investigating PDVSA US$11 billion missing

A half-dozen hooded gunmen tried to break into the offices of the comptroller committee at the National Assembly on Friday, according to the chairman of the opposition-led committee, who said the incident was likely politically motivated. The committee had issued a report accusing PDVSA of corruption, saying about US$ 11 billion in funds went missing from the state-run oil company while Rafael Ramirez was at the helm from 2004-14. "What a coincidence," said committee chairman Freddy Guevara in a statement. "Armed 'colectivos' arrived to threaten the personnel just two days after we denounced big corruption cases in PDVSA," added Guevara, in reference to pro-government militant grassroots groups denounced by opponents as thugs. (Reuters,


Venezuela oil price slips after 3 weeks of gains

The price Venezuela receives for its mix of medium and heavy oil slipped slightly after 3 straight weeks of gains as OPEC nations continue discussions over an oil output cut. According to figures released by the Ministry of Petroleum and Mining here, the average price of Venezuelan crude sold by Petroleos de Venezuela S.A. (PDVSA) during the week ending October 21 was US$ 43.03, down 6 cents from the previous week's US$ 43.09.
According to Venezuelan government figures, the average price in 2016 for Venezuela's mix of heavy and medium crude is now US$ 33.81 for the year to date. (Latin American Herald Tribune,



Coffee growers refuse to turn over 50% of their product to government CLAP system

An assembly of coffee growers held in Trujillo state have roundly rejected a government order that would force them to sell 50% of their products to government sponsored Local Supply and Production Committees (CLAP) at controlled prices. The local mayor asked the Maduro regime to reconsider. More in Spanish: (Ultima Hora Digital,


Economy & Finance

Supreme Tribunal here asked to rule if Venezuela and PDVSA can pay bonds in bolivars

A writ was introduced before Venezuela’s Supreme Justice Tribunal (TSJ), asking the court to rule on whether the Central Bank or troubled state oil company PDVSA can pay bondholders in the local currency, Bolivars, instead of in U.S. dollars The writ specifically mentions three issues of “bonos Bolivar-dollar” -- PDVSA 16, PDVSA 17 and PDVSA 17N -- bonds that were issued during the presidency of Hugo Chavez in the local Venezuelan bond market, priced and sold initially in Bolivars, but then resold in exchange for U.S. Dollars in the secondary markets. The Supreme Tribunal was also asked to decide on the debt of the Republic. All in all, Venezuela and PDVSA have US$ 70 billion in U.S. dollar bond debt, with US$ 3.3 billion due to be paid in the next week.  Between now and the end of 2017, Venezuela and PDVSA must pay US$ 15 billion in U.S. dollar bond interest and maturities. All PDVSA contracts with bondholders specifically say that they are signed under the laws of New York state and will be paid in US dollars. The writ was lodged by a corporation called XT46. Oil Minister and PDVSA President Eulogio Del Pino called the action “sabotage”. International analysts have two theories on the move: One is that PDVSA is behind the action in order to scare bondholders into a swap; and another believes some third party made the move in order to lower the price of the bonds. Bond conditions specify that the only way such bond payments can be made in another currency is through the consent of 100% of all bondholders. (Latin American Herald Tribune:; and more in Spanish: (El Nacional:


Politics and International Affairs

National Assembly accuses Maduro of staging a coup, opens proceedings to depose him, replace Elections Council

Venezuela’s opposition-led Congress, consistently undermined by the executive and judicial branches since taking control about 10 months ago, upped the ante on Sunday. The legislature approved a series of actions in response to last week’s decision by the National Elections Council (CNE) to halt an opposition signature drive after four provincial courts called it fraudulent and issued rulings putting a halt to the effort. Four ruling party governors, alleging fraud but presenting no public evidence, had requested injunctions from the courts earlier Thursday. The country’s powerful ruling party vice president, Lieutenant Diosdado Cabello, went even further, saying that opposition leaders should be jailed. In response, the legislature voted to:

  • Charge the Maduro regime with perpetrating a coup d'etat and declare that the constitutional order has broken down
  • Ask international organizations for help in defending the Venezuelan people
  • Call on the Venezuelan armed forces to disobey any order which is unconstitutional or goes against human rights
  • Bring formal charges at the International Criminal Court and all other relevant organizations against judges and members of the National Elections Board responsible for suspending the recall referendum process, along with officials responsible for politically persecuting the Venezuelan people
  • Start immediate proceedings to name new Supreme Court judges and members of the National Electoral Council
  • Urged Venezuelans to stand up in defense of the constitution.
  • Convene again on Tuesday, October 25th, to begin proceedings that will determine the status of the Presidency of Venezuela within the Constitution.

Julio Borges, leader of the opposition majority bloc, also said that the opposition would bring a political trial against President Maduro "to get to the bottom of his role in the break with democracy and human rights here". Hector Rodríguez, pro-regime minority leader in the Assembly, says the opposition has made “mistakes in contempt” of established powers, and said that the halt in recall procedures were just what his side expected. The session was tense and angry, with both government and opposition lawmakers giving fiery speeches. Analysts say the resolutions passed on Sunday are largely symbolic and unlikely to have much effect as the government and the Supreme Tribunal have so far sabotaged any attempts by the opposition to push through bills which President Maduro opposes. The opposition will likely look abroad for help in laying pressure on the government, in particular to the regional body Organization of American States (OAS). OAS head Luis Almagro has previously threatened to invoke the Inter-American Democratic Charter, which could lead to sanctions being imposed on Venezuela. (BBC News:; Bloomberg,; El Universal,; The Wall Street Journal:; and more in Spanish: El Nacional,; Noticiero Venevisión,; El Universal,


Pro-Maduro mob attacks National Assembly in session for debate over Maduro’s removal

The four-hour extraordinary session of the National Assembly in Caracas, was interrupted for about 30 minutes after government supporters breached security and threatened lawmakers on the National Assembly floor, A mob of dozens of pro-Maduro armed supporters dressed in red and screaming pro-regime slogans burst into the National Assembly while legislators were debating ways to depose President Nicolas Maduro from office. They met no resistance from the National Guard in charge of security at the Congress. Once inside the Chamber, they scuffled with legislative security personnel as some pro-regime legislators tried to calm them down. Downtown Caracas mayor Jorge Rodríguez suddenly appeared on site and ordered them to back off. The session was suspended for half an hour while they withdrew and the session reconvened under National Assembly President Henry Ramos Allup. At least two people were wounded. The interruption was described in very different ways by the two rival sides. Opposition lawmaker Julio Borges posted a video of the protests and called it "an attack on Venezuela's parliament". Government lawmaker Diosdado Cabello on the other hand defended those who had interrupted the session, saying they had only been protecting the legitimate government and would do so another 1,000 times. He also accused the National Assembly of carrying out its own coup d'etat. (BBC News:; and more in Spanish: Infolatam:; El Nacional:


Opposition calls for nationwide protests after recall bid halted

Venezuela’s MUD opposition alliance has called for nationwide demonstrations on Oct. 26 to protest the electoral authorities’ decision to suspend a presidential recall referendum campaign. “That day will be the start of a nationwide mobilization. We’d already warned (this would happen). On Wednesday, we’ll take Venezuela from end to end, every corner of the country. I hope to see the people mobilized to restore the constitutional order,” former presidential candidate Henrique Capriles said at a press conference along with the MUD’s other top leaders.
Capriles, who spearheaded the campaign to oust socialist President Nicolas Maduro, said Wednesday’s “Takeover of Venezuela” would not be like the Sept. 1 mass demonstration in Caracas when hundreds of thousands of anti-government marchers withdrew at 1:00 p.m., but instead would be carried out in all 23 states as well as the nation’s capital. Capriles has said they could take protests right up to the Miraflores Presidential Palace. (Latin American Herald Tribune,; Bloomberg,; Reuters,


Maduro calls for peace and dialogue after recall process halted, says the right is trying to take over power

In a broadcast from Azerbaijan, President Nicolas Maduro called on Venezuelans, and particularly his opponents, to preserve peace and dialogue following a decision by the National Elections Council to suspend a scheduled voter signature drive aimed at triggering a recall referendum against him. He said that “no one should go crazy”. He later sent a video message from Saudi Arabia, where he was discussing global oil prices. In it he said, "The revolution will continue to win despite the constant pretentions of the right which is trying to take over power by unconstitutional means." (BBC News:; and more in Spanish: (Infolatam:


Women march after Venezuela referendum halted

Led by women dressed in white, several thousand Venezuelans marched through Caracas on Saturday in the first of what the opposition hopes will be growing protests against the quashing of a referendum to remove President Nicolas Maduro. The opposition coalition, seeking to end 17 years of socialism here, says this week's suspension of its drive for a plebiscite against the unpopular leader shows Venezuela has abandoned democracy. They called on the Armed Forces to restore constitutional rights. (Reuters,


Local court bans opposition leaders from leaving the country

A local court in Valencia has banned Henrique Capriles Radonski and seven other opposition leaders from leaving the country, the former presidential candidate. The ban also applies to Secretary-General of the Democratic Unity Roundtable (MUD), Jesus Torrealba. The order is addressed to the chief of the country’s immigration agency, SAIME, Juan Carlos Dugarte. Besides Capriles and Torrealba, the other opposition leaders included in the order are Ramon Jose Medina, Jose Luis Cartaya, Oscar Antonio Barreto, Ricardo Francisco Sucre, Luis Ernesto Aparicio and Arnoldo Gabaldon. (Latin American Herald Tribune,


Lopez rejects dialogue overture by Panama’s Torrijos after recall suspension

Imprisoned Voluntad Popular leader Leopoldo Lopez received former Panamanian president Martín Torrijos in his cell to discuss a dialogue between the regime and its opposition here. He later tweeted that dialogue “is not possible after the recall referendum was suspended, robbing the people of the right to express themselves”. He called on all Venezuelans to take part in the takeover of the entire nation called up by the opposition Democratic Unity coalition (MUD) this coming Wednesday. Torrijos is again in Venezuela, along with Spain’s former President José Luis Rodríguez Zapatero, on behalf of the Union of South American Nations (UNASUR) and at the invitation of the Maduro regime, to try to set up talks between both sides here. A representative of Pope Francis I is expected to join the efforts. Lieutenant Diosdado Cabello, Vice President of the ruling PSUV party and considered the number two man within the Maduro regime, says that they “are expecting the arrival of a Papal representative” to join the efforts. He added that the Maduro regime would not accept any preconditions to sit down to talks, and that the visitors would not operate as intermediaries but simply as facilitators. The opposition insists it will not sit down to talks unless the Constitutional right to a recall referendum is guaranteed. More in Spanish: (Infolatam:; El Universal,


OAS Secretary General says Maduro is no longer legitimate, calls for "concrete actions" on Venezuela

The Secretary General of the Organization of American States (OAS), Luis Almagro, says “only dictatorships strip citizens of their rights, ignore the legislature and hold political prisoners”, and adds that President Nicolas Maduro has “lost all of his original legitimacy after depriving the Venezuelan people without electoral rights”.  He called on nations in the region to act within Article 20 of the Inter American Democratic Charter, and “take specific steps to defend democracy in Venezuela”. Almagro made his statements after the National Electoral Council (CNE) here suspended the process of the collection of signatures to convene a recall referendum, an action he regarded a breakdown of the democratic system. (Latin American Herald Tribune:; and more in Spanish: (El Nacional:


Twelve major OAS member nations express concern over halting of recall process; Bolivia slams Almagro.

Argentina, Brazil, Canada, Chile, Colombia, Costa Rica, Honduras, Guatemala, México, Peru, the United States and Uruguay have issued a joint statement expressing deep concern over a decision by the National Elections Council here to “postpone the 20% voter signature drive required to call a recall referendum” against President Nicolas Maduro. They asked that the issue soon be resolved in a “peaceful way”, and said the move to stop the recall “hurts the chances of starting a dialogue” to find a peaceful way out and find lasting solutions that promote democracy, social stability, full respect for human rights, separation of powers, and stronger institutions. For his part, Bolivian President Evo Morales criticized OAS Secretary General Luis Almagro for his “interventionist conduct”, called him an “imperial puppet”, and said his nation would “continue defending the Venezuelan people”. More in Spanish: (Infolatam:; and more in Spanish: Noticiero Venevisión,


Chairman of Roman Catholic Bishops Conference calls on Venezuelans to avoid violence

Monsignor Diego Padron, Chairman of Venezuela’s Roman Catholic Bishops Conference (CEV) says that the people of Venezuela have “suffered a hard blow”, but calls on a halt to any action that leads to violence, “because we know that the result of violence is more violence”. He said the CEV had not yet met to consider the recent move by the National Elections Council, but “is convinced the nation can move forward under any circumstance”.  He added that “the people must remain united in the knowledge that these evils can be overcome”. More in Spanish: (Infolatam:


Uribe says Venezuela should not be involved in Colombian peace process

Colombia’s former President Álvaro Uribe called Venezuela an “incorrigible dictatorship” which should be suspended from the OAS and UNASUR and all international organizations, and should no longer continue involved as a facilitator in Colombia’s peace talks with the FARC guerrilla. He called on the Venezuelan military, police and judges to defend democracy. More in Spanish: (Noticiero Venevision:


The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.