May 28, 2019

International Trade

Shippers raise rates for cargo from U.S. to Venezuela: documents, sources

Two major shipping lines this month have raised their rates for transporting goods from the United States to Venezuela, as U.S. sanctions limit transit between the two nations. Washington on May 15 banned direct flights between the United States and Venezuela, citing safety concerns, as part of a broad package of sanctions meant to pressure Nicolas Maduro into resigning as president of the crisis-stricken country. Citizens and social service organizations often depend on air and sea shipments for basic food and medicine in the hyperinflationary nation where a monthly minimum-wage salary barely pays for a single meal. Shipping lines Hamburg Sud and King Ocean Services have added a surcharge of US$ 1,200 per container of cargo that leaves the United States for Venezuela after May 15. That service has in recent months been costing between US$ 3,000 and US$ 5,000, depending on the cargo. (Reuters, https://www.reuters.com/article/us-venezuela-politics-shipping/shippers-raise-rates-for-cargo-from-u-s-to-venezuela-documents-sources-idUSKCN1SX1TD)

 

Maduro claims sabotage prevents ships with gasoline, food from reaching Venezuela

Vessels carrying gasoline and food to the crisis-stricken Venezuela are being prevented from reaching the country's coast because of sabotage attacks, Nicolas Maduro says, adding that Caracas was trying to find a solution to the issue. "Last week, sabotage was committed against ten tankers [with gasoline] to prevent them from reaching the Venezuelan coast. In any case, this problem is being dealt with and we are stabilizing the situation," he said late on Monday as broadcast on Twitter; and added that ships carrying food for Venezuelan citizens have were facing similar challenges, without specifying where the vessels were coming from, and who could have been responsible for the sabotage. (SPUTNIK: https://sputniknews.com/latam/201905281075400834-maduro-sabotage-gasoline/)

 

Maduro regime receives 4th batch of humanitarian aid from China

The Maduro regime received 68 tons of humanitarian aid offered by China on Monday, the 4th such batch with a shipment of medicine and other medical items. The Maduro regime’s Health Minister Carlos Alvarado and Chinese Ambassador to Venezuela Li Baorong jointly hosted the handover ceremony of the shipment at the international airport in Caracas. "This fourth shipment consists of 68 tons of medicine brought as part of this technical humanitarian aid: antihypertensives, antibiotics and medication for cardiovascular ailments. We are also receiving analgesics," Alvarado said. The medicine "is going to be distributed immediately through the national public health network," he added. For his part, Li said "We are convinced this is going to help the Venezuelan people facing the serious harm caused by the foreign sanctions". (XINHUANET: http://www.xinhuanet.com/english/2019-05/28/c_138096906.htm)

 

Maduro announces investment in HUAWEI

Leftist incumbent Nicolas Maduro announced on Thursday an immediate investment in the Chinese telecommunications firm HUAWEI, which has been accused of espionage by the United States. The investment seeks to help Venezuela in installing a 4G mobile network technology, which currently functions only sporadically and in the major cities here. “I have ordered an immediate investment with our Chinese brothers, Chinese technology, that of HUAWEI, of ZTE, and of all the Chinese and Russian companies, so that we can enhance the capacity of the whole telecommunications system and make 4G a reality,” Maduro said at a military event. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2479016&CategoryId=10717)

 

Oil & Energy

PDVSA tankers to be detained for lack of payment

Three PDVSA tankers that are late with payments to German operator Bernhard Schulte Shipmanagement (BSM) are being detained, as BSM gives up on waiting for payments while conducting business as usual with floundering state-run PDVSA. BSM operates almost half of PDVSA’s fleet of tankers and has made a move to “arrest” three tankers due to the outstanding debt PDVSA has amassed. The three tankers BSM arrested are the ARITA in Singapore, and the PARNASO and the RIO ARAUCA in Portugal. (Oil Price: https://oilprice.com/Latest-Energy-News/World-News/PDVSA-Tankers-To-Be-Detained-For-Lack-Of-Payment.html)

 

Aruba to form committee to decide fate of idled refinery

The government of Aruba said on Monday it will form an advisory committee to decide the future of a 209,000-barrel-per-day refinery that remains idled amid sanctions on operator CITGO Petroleum’s parent company, Petroleos de Venezuela (PDVSA). Prime Minister Evelyn Wever-Croes said there are three possible scenarios for the Aruba refinery: to continue working with CITGO on an overhaul, to negotiate a CITGO contract termination and continue with the plant, or to use the facility for a different activity. The committee should issue recommendations within two months of its formation, Wever-Croes said in a publicly broadcast message. Its members have yet to be announced. “Very possibly, we will not continue (working) with CITGO, but that is being evaluated, how to leave the contract without problems,” she said. (Reuters, https://www.reuters.com/article/us-refinery-aruba/aruba-to-form-committee-to-decide-fate-of-idled-refinery-prime-minister-idUSKCN1SX1NA)

 

Northern Brazil power line to avoid impact on tribe

The builders of a new power transmission line to the northern Brazilian state of Roraima have pledged to deploy 200 inspectors to reduce the environmental impact on an indigenous reservation where they will erect 250 pylons. It said they also had committed to keeping secret any geological information on the discovery of mineral resources to avoid drawing illegal mining interests that have long set their sights on the land of the Waimiri Atroari tribe. State-run utility Centrais Elétricas Brasileiras SA and private energy sector holding company Alupar Investimentos SA will build the 720-km (450-mile) line from Manaus to Roraima’s capital Boa Vista, connecting the state to the national grid. The companies won the contract in 2011 but the project, which became a priority after Venezuela suspended electricity supplies to Roraima last year, was delayed by environmental licensing and concerns over laying the line over 122 km (76 miles) of tribal lands. (Reuters, https://www.reuters.com/article/us-brazil-energy-roraima/northern-brazil-power-line-to-avoid-impact-on-tribe-document-idUSKCN1SX1X8)

 

Economy & Finance

Venezuela's economic crisis is now so bad that criminals can't afford to buy bullets

Venezuela's crippling economic spiral is having a negative impact on an unlikely group in society: criminals, who are struggling to afford bullets, and unable to find things to steal as the country's wealth declines rapidly. While bullets are widely available on the black market, many muggers cannot afford the US $1 price tag anymore, a criminal known as "Dog" told the news organization. The average Venezuelan only earns US$ 6.50 a month, and skyrocketing hyperinflation renders cash more worthless every day. Violent deaths have decreased since the Venezuelan economy started spiraling. In 2015, the South American country had a homicide rate of 90 people per 100,000 thousand inhabitants, according to the Venezuelan Observatory for Violence. That rate went down by nearly 10% last year— though Venezuela remains one of the most violent countries in the world. The non-profit, which aggregates the data from morgues and media reports, partly attributes this decrease to the reduction in muggings — because there is nothing to steal. As many Venezuelans struggle to pay for basics like food, medicine, or clothes, there are fewer cars or luxury items that criminals can take from them. And most people barely use cash anymore because of soaring inflation. Bank vaults are also mostly empty, the observatory's report said. Even if criminals were to steal cash from there, they would not be able to transport the mounds of bills it would take to get a substantial amount of money. Another reason violence is decreasing, according to the non-profit, is that many Venezuelans are leaving the crisis-stricken country. More than three million people have emigrated. Most of these migrants and refugees are young men — gangs' key recruitment demographic. Robert Briceño, the observatory's director, said the economic crisis is affecting every part of society. "These days, nobody is doing well — not honest citizens who produce wealth or the criminals who prey on them". But as a result of the chaos, crime has not so much disappeared as simply morphed in form. While assaults are down, reports of theft and pilfering of everything from copper telephone wires to livestock are surging. Meanwhile, drug trafficking and illegal gold mining have become default activities for organized crime. (NBC News: https://www.nbcnews.com/news/latino/venezuela-criminals-feel-pinch-economic-crisis-n1010696; INSIDER: https://www.insider.com/venezuela-crisis-so-bad-criminals-cannot-afford-bullets-2019-5)

 

Politics and International Affairs

Guaidó plays down prospects for Oslo mediation

Venezuelan interim president Juan Guaidó on Sunday played down the prospects for success at a new round of mediation with the government to be hosted by Norway next week, saying protests would continue until Nicolas Maduro resigned. Norway said on Saturday that representatives of Venezuela’s government and opposition will return to Oslo next week following an initial round of preliminary talks about how to address a long-running political crisis. “This is not negotiation. This is not dialogue,” Guaidó told reporters after a rally in the western Venezuelan city of Barquisimeto, adding that his team was simply responding to an offer from the Norwegian government to mediate. Guaidó reiterated that any solution to Venezuela’s crisis required Maduro to stand down, allowing a transitional government to steer the nation to fresh presidential elections. Nicolas Maduro said on Saturday his delegation was preparing to travel to Norway for a fresh round of negotiations with the opposition. The delegation which will represent the regime in the meetings in Norway is headed by Communications Minister Jorge Rodriguez, accompanied by Foreign Affairs Minister Jorge Arreaza and Hector Rodriguez, the governor of Miranda state, Maduro said. Norway said on Saturday that representatives of Venezuela’s government and opposition will return to Oslo next week following an initial round of preliminary talks about how to address the country’s political crisis.

“We announce that the representatives of the main political actors in Venezuela have decided to return to Oslo next week to continue a process facilitated by Norway,” the Scandinavian country’s foreign ministry said in a statement. “We reiterate our commitment to continue supporting the search for an agreed-upon solution between the parties in Venezuela,” it said.  (Reuters, https://www.reuters.com/article/us-venezuela-politics/venezuelas-opposition-leader-Guaidó-plays-down-prospects-for-oslo-mediation-idUSKCN1SW0ZH; https://www.reuters.com/article/us-venezuela-politics/norway-says-venezuela-government-opposition-to-hold-new-round-of-talks-idUSKCN1SV0OT; https://www.reuters.com/article/us-venezuela-politics-norway/venezuela-government-opposition-will-return-to-norway-for-talks-oslo-says-idUSKCN1SV0P7Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2479087&CategoryId=10717)

 

Russia says it is ready to play role in Venezuela crisis talks in Oslo

Russia’s Ministry of Foreign Affairs said on Monday that Moscow was ready to play a role in talks between the Venezuelan government and opposition in Oslo if the participants felt it was useful. The Russian foreign ministry said in a statement it welcomed the fact that the talks were continuing but warned against any external powers trying to foist ultimatums on the Venezuelan leadership. (Reuters, https://www.reuters.com/article/us-venezuela-politics-russia/russia-says-it-is-ready-to-play-role-in-venezuela-crisis-talks-in-oslo-idUSKCN1SX0RB)

 

Federica Mogherini appoints Enrique Iglesias as Special Adviser for Venezuela

In line with the European Union's firm commitment to contribute to a peaceful and democratic solution to the Venezuelan crisis and as a follow-up to discussions held in the context of the International Contact Group, High Representative/Vice-President Federica Mogherini decided today to appoint Enrique Iglesias as her Special Adviser for Venezuela. The appointment of Mr. Iglesias - a Spanish-Uruguayan economist who is a former secretary-general of the Ibero-American General Secretariat and was also President of the Inter-American Development Bank as well as Foreign Minister of Uruguay - will enable a more sustained and reinforced political and diplomatic engagement on the situation in Venezuela. Mr. Iglesias will support the work of the EU and of the ICG to help promote a peaceful, democratic solution to the crisis in Venezuela, through free and fair elections. (European External Action Service: https://eeas.europa.eu/headquarters/headquarters-Homepage/63282/federica-mogherini-appoints-enrique-iglesias-special-adviser-venezuela_en)

 

US balks as Maduro representative heads up UN-backed disarmament body

The U.S. ambassador to the United Nations' main disarmament body walked out of its session on Tuesday to protest that Venezuela had taken the chair. The move by Robert Wood, who insisted "a rogue state" was taking over, came shortly after the Maduro regime’s Ambassador Jorge Valero began hosting a public plenary session of the Conference on Disarmament. Wood said that nothing that comes out of the current session will be legitimate and said the United States will boycott Venezuela's four-week presidency starting this week. He said a dozen members of the so-called Lima Group of countries from Latin America also decided not to take part. The walkout and boycott appeared mostly to be political theatrics, however. Wood acknowledged that the conference "isn't doing very much right now." Venezuela's turn as the conference's president follows a regular rotation by alphabetical order. (FOX News: https://www.foxnews.com/us/us-balks-as-venezuela-heads-up-un-backed-disarmament-body)

 

Leopoldo López Sr. elected to European Parliament

Leopoldo López Gil, father of Venezuelan leader and political prisoner Leopoldo López, has been elected to the European Parliament elections on May 26th. López Gil, who was nominated by the conservative People’s Party (PP) has said that he hopes “to speak faithfully not only for the Kingdom of Spain, but also for Latin American countries and especially Venezuela before the European Parliament.” López Gil received the Spanish nationality in December 2015, when former PP leader Mariano Rajoy was head of government. More in Spanish: (El Universal; http://www.eluniversal.com/politica/41132/leopoldo-lopez-gil-fue-electo-al-parlamento-europeo-por-el-pp-espanol)

 

Venezuelan Ambassador publishes video of trash left by communists in Washington embassy

Venezuelan Ambassador to the United States Carlos Vecchio published a video Monday showing the extensive state of disrepair in which a small group of communists left the U.S. embassy after illegally occupying it for days. Vecchio, appointed by legitimate Venezuelan President Juan Guaidó, published a video on Twitter that showed the building full of trash, loose cables, unwashed dishes, and in a state of general disrepair. This month, local police evicted a group of communist protesters identified as Code Pink agitators working in tandem with the Maduro regime to occupy the building after Maduro’s representatives returned to Caracas. The protesters attracted dozens of Venezuelans who surrounded the building demanding the return of their embassy to their people. Vecchio, whom Guaidó appointed in January following his presidential inauguration by the National Assembly, said the state of the building reflects what the Maduro regime has done to Venezuela as it experiences the worst economic and humanitarian crisis in the country’s history. Now that the embassy has returned to the hands of the Venezuelan government, Vecchio and his team will have the opportunity to use the building as the diplomatic headquarters for relations between the U.S. and Guaidó’s administration. (Breitbart: https://www.breitbart.com/national-security/2019/05/27/venezuelan-ambassador-publishes-video-piles-trash-communists-left-u-s-embassy/)

 

Venezuela called to appear in Canberra court over missed embassy rent payments

The Maduro regime has been taken to court by a Canberra family who alleges the country owes them thousands in unpaid rent money. The regime sought to have the claim dismissed but failed. The Rosa family claimed the South American nation had missed more than $50,000 in rent payments for two properties in O'Malley it had previously used as an embassy. In documents seeking a hearing in the ACT Civil and Administrative Appeals Tribunal, the family claimed that from 2017 the republic began to fall behind in payments, and eventually vacated under contentious circumstances. "I do appreciate that the respondent may be placed in a difficult, and perhaps even diplomatically embarrassing, situation by being required to respond to proceedings in this tribunal," senior tribunal member H Robinson said in his decision. "That alone is not a basis upon which this tribunal can or should dismiss these proceedings." Mr. Robinson conceded that, even if a ruling could be made against the Republic of Venezuela, it was questionable whether that could be enforced.  (ABC: https://www.abc.net.au/news/2019-05-28/venezuela-called-to-appear-in-canberra-court-over-missed-rent/11151010)

 

Maduro approves machine gun manufacture plan despite firearm ban

Socialist dictator Nicolas Maduro approved a plan on Thursday to manufacture machine guns across Venezuela despite a nationwide ban on the use of firearms. In a video streamed by Venezuelan state propaganda outlet VTV, Maduro announced the approval of funds for a new line of machine guns to be produced in Venezuela. As Maduro openly admitted, the use of such weapons would only be for the military and state security services, allowing them to step up their repression and control of the country’s population to create a Cuba-style communist dictatorship. (Breitbart: https://www.breitbart.com/national-security/2019/05/24/venezuela-maduro-approves-machine-gun-manufacture-plan-despite-firearm-ban/)

 

29 die in disturbance at Venezuelan jail

Twenty-nine prisoners were killed, and 19 police wounded on Friday in a disturbance at a pre-trial detention facility in the central state of Portuguesa, a source in the Venezuelan Attorney General’s Office told EFE.
The events unfolded in a police lockup in the town of Acarigua. “There was an attempted escape and a fight broke out among gangs,” the state’s public safety secretary, Oscar Valero, told the media. “With police intervention to prevent the escape, well, there were 29 deaths.” Prisoners detonated three grenades, resulting in injuries to 19 police officers, Valero said. The lockup in Acarigua holds more than 350 people awaiting trial, he said.
The Venezuelan Prisons Observatory (OVP), an independent advocacy group, said blame for the deaths lay with the Ministry of Penitentiary Services, created eight years ago to address chronic overcrowding, corruption and violence in the nation’s 30 prisons. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2479058&CategoryId=10717)

 

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.

May 16, 2019

Logistics & Transport

US suspends all passenger, cargo flights to Venezuela

The Trump administration suspended all commercial passenger and cargo flights to Venezuela on Wednesday considering worsening safety conditions, recent social unrest and political turmoil engulfing this nation. Acting Homeland Security Secretary Kevin McAleenan determined that “conditions in Venezuela threaten the safety and security of passengers, aircraft, and crew," according to a DHS statement. Secretary of State Mike Pompeo approved the suspension and Transportation Secretary Elaine Chao implemented it. “This determination is based on the ongoing political instability and increased tensions in Venezuela and associated inadvertent risk to flight operations,” the statement said. The Department of Homeland Security said the suspension will remain in effect until conditions in Venezuela improve. Maduro criticized the suspension of flights, saying the measure was an attack on freedom of movement. (FOX News: https://www.foxnews.com/politics/us-suspends-all-passenger-cargo-flights-to-venezuela; Reuters, https://www.reuters.com/article/us-venezuela-politics-usa-airlines/u-s-orders-suspension-of-flights-between-the-u-s-and-venezuela-idUSKCN1SL2F2)

 

Oil & Energy

Putin could cut his loss as Venezuelan oil output nosedives

Venezuela’s oil production held up last month but appears to be falling off a cliff once again. The situation became dire this week. Venezuela’s Orinoco Belt saw production plunge by 77% on Tuesday, falling from 764,100 bpd at the start of April to just 169,800 bpd on Tuesday, according to S&P Global Platts. The reason? There were a lack of tankers available to take away exports. Storage is filling up and ports are having trouble getting product out to sea. S&P said that production of Orinoco blend crude was shut down at three upgraders, which included PETROPIAR (a joint venture between PDVSA and CHEVRON), PETROMONAGAS (with ROSNEFT) and PETROCEDENO (with TOTAL and EQUINOR). Meanwhile, PDVSA’s Petro San Felix is also out of commission. Without upgraders or tankers, production must decline. TOTAL, EQUINOR and PDVSA shut down output at their extra-heavy oil project in the Junin field in the Orinoco Belt, according to S&P. One field operator told S&P that an “optimistic scenario” would entail Venezuelan oil production at only 400,000 to 500,000 bpd. In other words, Venezuela’s oil production, already down sharply, is in freefall. Punitive action from the Trump administration is largely to blame for the deepening crisis. The plunge in production could be a fatal blow the Maduro government, which has held on to date despite an aggressive regime change campaign undertaken by Washington. Unless production rebounds, the pressure on Maduro will continue to mount. Russia’s Vladimir Putin was thought to go to great lengths to prop up Maduro, maintaining an ally while also keeping alive a thorn in Washington’s side. But Putin reportedly told President Trump on a phone call recently that he was prepared to withdraw support for Maduro. The price? The U.S. would need to withdraw military assistance to Ukraine. None of this has been made public, so time will tell if The Telegraph’s report pans out. But if true, it’s hard to imagine Maduro will be able to hang on with oil production in a nosedive and his key sponsor making moves to sell him out. (Oil Price: https://oilprice.com/Energy/Crude-Oil/Putin-Could-Cut-His-Loss-As-Venezuelan-Oil-Output-Nosedives.html)

 

Venezuela's crude upgraders scale back output as exports dwindle

Venezuela’s crucial oil upgraders have stopped processing heavy crude because a decline in exports due to U.S. sanctions has left the nation without enough storage space, seven sources familiar with the facilities told Reuters. Three of the four upgraders, which convert extra-heavy Orinoco oil into lighter exportable grades, have started “recirculating” - a process that keeps systems running to prevent damage but does not yield new upgraded oil. The shift signals that state oil company PDVSA is struggling to maintain operations after U.S. sanctions this year eliminated its main customer by restricting sales to U.S. refiners. “The upgraders are recirculating because there is an excess of production, and there are no buyers,” one PDVSA source said. (Reuters, https://www.reuters.com/article/us-venezuela-oil/venezuelas-crude-upgraders-scale-back-output-as-exports-dwindle-sources-idUSKCN1SL22U)

 

Rising U.S. oil output helps fill gap left by Iran, Venezuela: IEA

The world will require very little extra oil from OPEC this year as booming U.S. output will offset falling exports from Iran and Venezuela, the International Energy Agency said on Wednesday. The IEA, which coordinates the energy policies of industrial nations, said Washington’s decision to end sanctions waivers that had allowed some importers to continue to continue buying Iranian crude added to the “confusing supply outlook.” “However, there have been clear and, in the IEA’s view, very welcome signals from other producers that they will step in to replace Iran’s barrels, albeit gradually in response to requests from customers,” the Paris-based IEA said in its monthly report. (Reuters, https://www.reuters.com/article/us-iea-oil/rising-u-s-oil-output-helps-fill-gap-left-by-iran-venezuela-iea-idUSKCN1SL0TG)

 

Venezuelan oil tanker captain refused to ship gasoline to Cuba

The captain of the Manuela Saenz, a Venezuelan oil tanker, fought back against orders to send a shipment of unleaded and diesel gasoline to Cuba last week, prompting dictator Nicolás Maduro’s political police forces to stop the ship and replace him, according to a report in Argentine news outlet INFOBAE on Tuesday. The anecdote, allegedly relayed to INFOBAE by unspecified sources, suggests that Maduro may be losing control of the workers that run Petróleos de Venezuela (PDVSA), the state-run oil company and one of Maduro’s last remaining lifelines. INFOBAE reports that the Manuela Saenz left Venezuela with its gasoline shipment on May 1 without incident, “but during the voyage, it disconnected its satellite systems to avoid being detected.” To get to Cuba, the ship would have to pass through the waters of Caribbean nations that abide by U.S. sanctions against the Maduro regime and thus risk being seized. While the ship was off the grid, INFOBAE claims, its captain – who remains unnamed in the article – and some of the crew refused to travel to Cuba. Members of the Bolivarian Intelligence Service (SEBIN), the political police Maduro deploys to imprison, torture, and kill dissidents, then stepped in to “intimidate and pressure the crew” into completing the trip. The agents reportedly removed the captain and replaced him with a compliant navigator, who then completed the trip to Havana. The whereabouts of the captain who defied Maduro remain unknown. Satellite images place the Manuela Saenz in Havana, Cuba. Diario de Cuba, a Spain-based publication, revealed evidence last week that Venezuela sent two other ships to Cuba to send oil despite the sanctions, identifying them as the E Pioneer and the Marigola. (Breitbart: https://www.breitbart.com/latin-america/2019/05/15/report-venezuelan-oil-tanker-captain-refused-to-ship-gasoline-to-cuba/)

 

Economy & Finance

U.S. resists Guaidó's request to shield Venezuela from creditors

The U.S. is unlikely to grant a request from the Venezuelan opposition for an executive order protecting the nation’s assets from creditors, according to people familiar with the matter. That means National Assembly President Juan Guaidó, who’s recognized as head of state by the U.S. and more than 50 countries, will need to make a critical bond payment by the end of this month to ensure that investors don’t try to seize Citgo. The Houston-based refining company, owned by state-run Petroleos de Venezuela, was put up as collateral on the note. (BLOOMBERG: https://www.bloomberg.com/news/articles/2019-05-14/u-s-resists-Guaidó-s-request-to-shield-venezuela-from-creditors)

 

Study finds Venezuela criminal enterprise is blunting effects of U.S. sanctions

Venezuela’s foreign policy might have started out as an idealistic socialist project to revitalize Latin America, but it has morphed into an enormous criminal conglomerate that operates in multiple countries with dozens of partners and hundreds of phantom companies, according to a new study. A report prepared by the National Defense University and Washington-based IBI Consultants argues that Venezuela’s Nicolás Maduro essentially leads a political-criminal enterprise that has siphoned billions of dollars from the Venezuelan economy. The study, titled,” also sheds light on why escalating U.S Maduro’s last stand — Venezuela’s survival through the Bolivarian joint criminal enterprise. Economic and financial sanctions on Maduro and his allies have failed to dislodge them. The report’s authors argue that the network unites companies, regional structures and Venezuelan political allies in a variety of criminal operations ranging from corruption, money laundering, drug trafficking and gold smuggling. According to IBI’s calculations this criminal “network of networks” racked up between US$ 10 and US$ 43 billion in revenue between 2007 and 2018, most of which was spirited out of Venezuela through various money-laundering schemes, often with the help of the political leadership in places like Cuba, Nicaragua, Bolivia, Ecuador, Suriname and El Salvador. The study, written by Douglas Farah and Caitlyn Yates, is the result of a five-year investigation in 11 countries. According to the authors, the criminal conglomerate not only stole billions of dollars from the coffers of the Venezuelan state but used PDVSA and its foreign subsidiaries as the central structure for money laundering and corruption throughout Latin America. Among the activities identified were massive infrastructure projects that never materialized, fictitious oil sales, sweetheart and opaque loans and the purchase of physical assets. In a telephone interview, Farah said the sprawling nature of the organization means U.S. sanctions also must be broad and widespread in order to make an impact. One of the key conclusions of the report is that the Venezuelan regime for years used the corruption derived from the huge oil revenues to favor its political allies in other countries, including Nicaragua and El Salvador. (The Miami Herald: https://www.miamiherald.com/news/nation-world/world/americas/venezuela/article230420019.html)

 

Politics and International Affairs

Maduro regime representatives, opposition travel to Norway in hopes of resolving crisis

Representatives of the Maduro regime and opposition traveled to Norway for talks on resolving the crisis here, officials said Wednesday, opening a new chapter in a political stalemate after months of street demonstrations and a failed opposition call for a military uprising. The development appeared to reflect a recognition that neither side had been able to prevail in the struggle for power, leaving Venezuela in a state of paralysis after years of hyperinflation and shortages of food and medicine. It was also a policy reversal for the opposition, which has accused Nicolás Maduro of using previous negotiations to play for time. Senior members of both sides will be involved in the exploratory discussions in Oslo, said members of Venezuela’s opposition-controlled congress who spoke on condition of anonymity because of the sensitivity of the talks. Delegations from the two opposing camps had received separate invitations from a group of Norwegians, one official said. Information Minister Jorge Rodriguez and Miranda state Governor Hector Rodriguez of the Socialist Party both traveled to Oslo, according to the sources. Opposition legislator Stalin Gonzalez, along with political advisers Gerardo Blyde and Fernando Martinez have also gone to Norway, where authorities have been involved in conflict mediation, including assistance with Colombia’s 2016 peace deal between the government and FARC rebels. No meetings have yet been held, and the parties will meet separately with Norwegian diplomats, one of the sources said. Maduro did not directly comment on the talks during televised remarks, but he said Rodríguez was on a “very important” mission outside Venezuela. The planned talks seemed likely to dampen speculation that the United States, the main backer of the Venezuelan opposition, might be considering military action to end the crisis in the near term. U.S. officials have previously said they are focusing on diplomatic and economic measures to force out Maduro, though opposition leader Juan Guaidó said his Washington envoy will meet with the head of the U.S. Southern Command on Monday. The Norway dialogue comes as a mostly European group of nations prepares to send a high-level delegation to Venezuela to propose solutions to the country’s protracted crisis. The International Contact Group consists of eight European countries, the European Union and four Latin American countries. (Market Watch: https://www.marketwatch.com/story/venezuelas-government-opposition-travel-to-norway-in-hopes-of-resolving-crisis-2019-05-15; AP: https://www.apnews.com/a2776110b08649dba0725aadb0b53575; Reuters: https://www.reuters.com/article/us-venezuela-politics-norway/venezuela-opposition-government-leaders-travel-to-norway-for-possible-talks-idUSKCN1SL2WI; DW: https://www.dw.com/en/venezuela-envoys-head-for-talks-in-norway-as-us-halts-flights/a-48756071)

 

EU mission heads to Venezuela to meet dueling political factions

Representatives from a European Union initiative to resolve Venezuela’s simmering crisis are set to arrive in Caracas for meetings with the nation’s warring factions, according to National Assembly Vice President Stalin Gonzalez. A mission from the International Contact Group, comprising eight EU member states and four Latin American countries, will present proposals to members of President Nicolas Maduro’s autocratic regime and the opposition Thursday and Friday. The plans to end the nation’s bitter impasse haven’t been made public, but the ICG said in a statement this month that they contained “concrete options for a peaceful and democratic solution.” (BLOOMBERG: https://www.bloomberg.com/news/articles/2019-05-15/eu-mission-heads-to-venezuela-to-meet-dueling-political-factions)

 

Opposition-led congress in Venezuela returns to chambers

Venezuela’s opposition-controlled congress has returned to its chambers a day after security forces prevented its members from entering the National Assembly building for a debate. Opposition leader Juan Guaidó and other legislators on Wednesday gave speeches denouncing the regime of Nicolás Maduro, who has accused them of conspiring with the United States to stage a coup. On Tuesday, police sealed off the National Assembly, purportedly to search for any hidden explosives. EFE saw the National Guard contingent establish a security perimeter around the Federal Palace and prevent anyone – including assembly members – from approaching the building. Lawmakers ultimately decided to postpone the session until Wednesday. Interim president Juan Guaidó had said that the legislature would hold sessions on the street if necessary: “We will hold sessions, we will insist on reaching the Federal Palace (the seat of the assembly) and if we have to hold sessions ... on the street, we’ll do it, but the Federal Palace belongs to the parliament, to the people of Venezuela, and we will not renounce it,” he told a press conference. (AP: https://wtop.com/latin-america/2019/05/opposition-led-congress-in-venezuela-returns-to-chambers/;  BBC News: https://www.bbc.com/news/world-latin-america-48276140; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2478621&CategoryId=10717; http://www.laht.com/article.asp?ArticleId=2478628&CategoryId=10717)

 

Maduro regime strips immunity from five more opposition lawmakers

Venezuela’s socialist regime widened its crackdown on opponents who allegedly backed last month’s failed attempt to topple Nicolas Maduro, stripping five more lawmakers of their immunity from prosecution. The congressmen are among about a dozen key allies of Juan Guaidó, the head of the powerless National Assembly who says he is the nation’s rightful president, being probed for crimes including treason and conspiracy. Last week, intelligence police arrested Edgar Zambrano, the assembly’s vice president, sending many prominent politicians who supported Guaidó’s April 30 call for insurrection into hiding, exile or to foreign embassies seeking asylum. (Bloomberg, https://www.bloomberg.com/news/articles/2019-05-15/maduro-regime-strips-immunity-from-5-more-opposition-lawmakers; Reuters, https://www.reuters.com/article/us-venezuela-politics/venezuelas-top-court-accuses-more-lawmakers-of-treason-congress-building-closed-idUSKCN1SK288)

 

EU condemns Venezuela's 'flawed' court case against opposition lawmakers

The European Union condemned what it called Venezuela’s “flawed judicial decisions” against four opposition lawmakers on Wednesday, saying it would lead to an escalation of the political crisis in the country. Accusations of treason against Carlos Paparoni, Miguel Pizarro, Franco Casella and Winston Flores “are part of a pattern of blatant violations of due process and unfair legal proceedings,” the EU’s foreign service said in a statement. “Such measures only contribute to further polarization of the situation in the country,” it added. (Reuters, https://www.reuters.com/article/us-venezuela-politics-eu/eu-condemns-venezuelas-flawed-court-case-against-opposition-lawmakers-idUSKCN1SL2DX)

 

Chavista legislator sides with Guaidó

The opposition-controlled National Assembly legislative is back in business Wednesday after the kidnapping of its first Vice President, the temporary occupation of the building by the military Tuesday and harassment against 96 of its 112 opposition lawmakers. And the opposition is gaining support. National Assembly President Juan Guaidó, who on January 23rd claimed the mantle of interim President of Venezuela, swore Fernando Orozco in as lawmaker for Trujillo state. “The regime is finished. That’s why they are lost. And that’s why they are losing. They are defeated. Now is our turn to win!” a clearly emboldened Guaidó said after swearing Orozco in, the first bit of good news for the opposition in a long while. Fernando Orozco was elected as a candidate as third alternate for Trujillo state on the PSUV ruling party ticket of embattled leader Nicolas Maduro. The PSUV party was founded by Hugo Chavez, Maduro’s mentor and predecessor. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2478633&CategoryId=10717)

 

Guaidó tells Canada PM he wants elections as soon as possible: Ottawa

Venezuelan interim president leader Juan Guaidó spoke to Canadian Prime Minister Justin Trudeau on Tuesday and told him he was committed to holding free and fair elections as soon as possible, Trudeau’s office said in a statement. “Guaidó conveyed his commitment to holding free and fair elections as soon as possible, in line with the Venezuelan Constitution, and thanked the Prime Minister for Canada’s role in helping lead the international response to the crisis in Venezuela,” it said. (Reuters, https://www.reuters.com/article/us-venezuela-politics-canada/venezuelas-Guaidó-tells-canada-pm-he-wants-elections-as-soon-as-possible-ottawa-idUSKCN1SK2N9)

 

Canada’s Freeland to visit Havana as tensions rise over Venezuela

Canadian Foreign Affairs Minister Chrystia Freeland will travel to Cuba today to meet with Communist leaders in Havana as the situation in Venezuela worsens and U.S. President Donald Trump adopts a far more aggressive posture toward the Caribbean island nation. In a press release sent to the parliamentary press gallery, Freeland's office said she will meet with her Cuban counterpart, Foreign Affairs Minister Bruno Eduardo Rodríguez Parrilla, to discuss Venezuela and the increasingly fraught U.S.-Cuba relationship. President Trump has taken a markedly different stance on Cuba than his immediate predecessor, Barack Obama, who sought to improve relations with the country after decades of Cold War-era tensions. Instead, Trump has enforced a long-dormant part of the U.S. trade embargo against that country, known as Title III of the Helms-Burton Act. This move could spell trouble for major Canadian companies that operate in Cuba, including the Montreal-based National Bank of Canada, which operates a branch in Havana focused on trade financing, and Toronto-based resource company SHERRITT International. Canada's airlines, which ferry tens of thousands of Canadians to Cuban resorts each year, also could face legal challenges, according to the U.S.-Cuba Trade and Economic Council Inc., a group that tracks investments in Cuba. "It is of critical importance that our two countries meet to discuss the economic, political and humanitarian crisis in Venezuela and the work we can undertake together to address it," Freeland said in a statement. "I also look forward to discussing how we can work together to defend Canadians conducting legitimate trade and investment in Cuba in light of the United States ending the suspension of Title III of the Helms-Burton Act." Canada is part of the Lima Group of countries that opposes Maduro's presidency and has recognized opposition leader Juan Guaidó as the country's legitimate leader. (CBC: https://www.cbc.ca/news/politics/freeland-visit-havana-cuba-trump-1.5137413)

 

Russia denies sending mercenaries to protect Nicolas Maduro amid power struggle

The Russian government has denied that it has sent mercenaries to protect Nicolas Maduro. Reports emerged earlier this week that dozens or hundreds of Russian mercenaries, who have been active in Ukraine and Syria, had been sent to protect Maduro from a possible coup attempt. The move would suggest that Russia was willing to raise the stakes to protect its investment in its closest ally in the western hemisphere. On a political news show on Sunday, Kremlin spokesman Dmitry Peskov denied that Russia had sent military personnel to the country. He did not make a direct denial, however, because private military contractors do not work for the government. Vladimir Davydov, the academic director at the Institute of Latin America at the Russian Academy of Sciences, said that Russia views Venezuela as its beachhead in Latin America and that the country’s large oil reserves made it a top priority for Russia. “What role will Russia play in the control of strategic resources? That is what is being decided in Venezuela,” Davydov said. The man leading the charge has been Igor Sechin, the former military translator who now heads the Russian oil firm ROSNEFT. A fluent Spanish speaker, Sechin has met with Maduro regularly and has increased the Rosneft’s investment in Venezuelan oil production and its state-owned producer. “[Sechin] knows Latin America quite well, he is very influential,” said Davydov. “He wants to maintain ROSNEFT’s position in Venezuela and there are different ways to do that.” For now, Davydov and his colleagues said they did not expect Russia to involve itself militarily in the Venezuelan crisis, even in the event of American-backed intervention. It would primarily seek a role as an intermediary, they said, to project Russian power and to protect its investment. Even in the case of a transfer of power, Russia may not stand to lose everything. “We didn’t conclude deals with [Hugo] Chavez or Maduro, we concluded deals with the parliament of Venezuela,” said David Rozental, a researcher at the Institute, during a radio broadcast last week. “In this sense, I don’t think that there’s a serious threat to Russian assets.” (South China Morning Post: https://www.scmp.com/news/world/americas/article/2183898/russia-denies-sending-mercenaries-protect-venezuela-president)

 

Brazil sees Venezuelan military deciding Maduro's fate

Venezuela’s armed forces will either depose Nicolas Maduro and lead a transition to democratic rule or face divisions that risk a civil war, the Brazilian government’s top security adviser said on Tuesday. Retired General Augusto Heleno, national security adviser to President Jair Bolsonaro, told Reuters the situation in Venezuela was unpredictable after opposition leader Juan Guaidó unsuccessfully called on the military to change sides last month.

(Reuters, https://www.reuters.com/article/us-venezuela-politics-brazil/brazil-sees-venezuelan-military-deciding-maduros-fate-security-aide-idUSKCN1SK2LP)

 

Maduro regime tried to talk to US authorities about Washington Embassy issue

Maduro regime officials have tried to contact US authorities to resolve the issue surrounding the occupation and possible takeover of the Venezuelan embassy in Washington, Maduro´s envoy to the UN Samuel Moncada said during a press conference. US activists have been living inside the Venezuelan embassy since late April to prevent the opposition from taking over. On Monday night, the US Secret Service broke into Venezuela’s embassy. Opposition leader Juan Guaidó’s representative, Carlos Vecchio, said in a statement that the Secret Service agents have ordered the activists to leave the embassy or face imprisonment and prosecution. However, at least four Embassy Protection Collective activists remained in the embassy despite the warnings. In Washington, the Rev. Jesse Jackson delivered food to American activists who have been occupying the Venezuelan Embassy the past five weeks. The activists, who have ignored trespassing warnings, consider Maduro to be Venezuela’s rightful leader. The U.S. and other countries backing the opposition contend his presidency is illegitimate and recognize Guaidó’s claim to be interim president. (Sputnik: https://sputniknews.com/latam/201905161075044550-venezuela-tried-talk-washington-dc-embassy/)

 

Maduro’s 'colectivos' strike terror while trying to win support of Venezuela's most vulnerable

The notion of masked men on no-license-plate motorcycles shooting down citizens to rob them for their bread, emptying magazines of bullets into crowds of anti-government protesters or lurking at the door with threats for an outspoken journalist has become commonplace in Venezuela. These groups are known as the collectives - or “colectivos” in Spanish - and function as carry out the dirty work for Nicolas Maduro. But aside from aiding Maduro to stay in power in the face of growing opposition and international condemnation, many of the groups are also intent of waging their own campaigns to win back – or sustain – the support of Venezuela’s most vulnerable. Disguised by masks and dark clothing, their identities not known, colectivos publicly reprimand accusations of violence. The colectivos themselves are divided up into groups with different powers and functions. “They are criminals, hardcore Chavistas on the frontlines as the armed defense of Maduro’s regime. The most powerful Colectivos are known as the Carapaicas, Tupamaros, La Piedrita, Alexis Vive, and the Gran Polo Patriotico,” said Johan Obdola, president of Latin America-focused global intelligence and security firm IOSI and former Venezuelan counter-narcotics official. “Their biggest numbers are in the main cities of Venezuela – Caracas, Valencia, Maracay, and Maracaibo.” According to Obdola, they initially received training from Colombian rebel group FARC, then eventually the Venezuelan Army and National Guard, but more recently the Cuban military. While hard data is impossible to obtain, some analysts estimate that the colectivos maintain control of as much as 30% of Venezuela’s towns and cities and endeavor to augment that at any outlay. The exact number of members too is murky, yet analysts estimate there could be anywhere from 10,000 to 100,000 of these irregular gang members operating with impunity throughout the impoverished country. And it’s not all about crime, drug trafficking, methodical abductions, and stealing. Many of the colectivos, sources on the ground tell Fox News, continue to operate something of a “heart and minds” game to try and win over the support of the most vulnerable. Such pro-Maduro outfits are quietly permitted by the government to be involved in, and sometimes participate in the delivery of the infamous CLAP food aid boxes distributed under the socialism umbrella, Martina noted. Indeed, for many, they are simply a staple of order in an ever-fragmenting society. For Maduro, who the U.S. and other countries mandate is no longer a legitimate official, they are something of a lifeline. “I admire them. They are organizations created for the good of the community. The collectives work for society, for the sick, for peace, and against crime,” Maduro declared last week, just hours after members opened fire on rallying anti-government Venezuelans. (FOX News: https://www.foxnews.com/world/maduro-colectivo-terror-venezuela-vulnerable)

 

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.

 

May 10, 2019

International Trade

Something is happening with Venezuela’s agriculture

Venezuela’s agricultural exports rose to US$ 322.3 million in 2017 from US$ 47. 4 million in 2013. They increased again in 2018 to US$ 337.1 million. In 2013 that modest level of agricultural exports accounted for 2.32% of exports different from oil and gold. In 2017 that percentage had increased to 12.34%. Over the past year – given the low export levels of commodities different from oil and gold, and an increase in agricultural exports – the latter accounted for 15.26% of total exports. The increase of agricultural exports has taken place despite a national productive collapse with many adverse conditions, the vast majority of which relate to the lack of favorable economic policies, such as a myriad of tighter controls and permits, the lack of inputs, lack of physical infrastructure and disrespect for the agrarian property. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2478291&CategoryId=10717)

 

Oil & Energy

PDVSA ad-hoc board to finance bond payment with uncollected oil revenue

Venezuelan state oil company PDVSA will use uncollected oil revenue to make a bond payment due this month, the board of directors named by interim president leader Juan Guaidó said on Thursday. The opposition-controlled National Assembly on Tuesday approved the US$ 71 million payment on PDVSA’s 2020 bond, as it seeks to avoid losing control of PDVSA’s U.S. refining subsidiary CITGO. The Maduro regime had remained current on that bond even as it defaulted on billions of dollars in other bonds, because the PDVSA 2020 is backed by shares in Citgo, the country’s crown jewel overseas. In a statement, the board said the funds to pay the bond would come from “PDVSA’s overseas accounts receivable,” referring to invoices to customers that had not yet been paid. The board did not specify the value of PDVSA’s accounts receivable abroad but said it would make the payment within the 30-day grace period that began on April 27. If the payment is not made, bondholders could move to seize half the shares in Citgo, which PDVSA posted in collateral for the bond. Guaidó has sought to protect Venezuelan assets abroad from possible seizure by creditors since invoking the country’s constitution to assume an interim presidency in January. He has been recognized as the country’s rightful leader by dozens of countries, including the United States. Maduro retains control of PDVSA within Venezuela, as well as state functions. Any effort by a Maduro-linked entity to make the payment would have been complicated by sanctions the United States placed on PDVSA in January in a bid to squeeze Maduro’s government financially. (Reuters: https://www.reuters.com/article/us-venezuela-politics-bonds/venezuelas-pdvsa-ad-hoc-board-to-finance-bond-payment-with-uncollected-oil-revenue-idUSKCN1SF2KE: Bloomberg, https://www.bloomberg.com/news/articles/2019-05-08/venezuela-money-at-new-york-fed-may-be-key-to-pdvsa-bond-payment)

 

Firms flock to power auction for troubled Brazil state near Venezuela

Developers have presented more than 150 proposals for power plants ahead of an auction this month to supply electricity to the Brazilian state of Roraima, which has struggled with a rash of blackouts due to reliance on the shaky Venezuelan power grid. Roraima, which is not connected to Brazil’s national grid, has begun depending on expensive emergency fuel-burning plants in the absence of reliable power from its northern neighbor, which has sunk into a profound economic and political crisis. Brazil’s federal government set an auction for May 31 to close long-term contracts with new suppliers using any available source, from oil to wind or solar. Canadian Solar Inc and Brazilian companies Casados Ventos, Eneva SA and Equatorial Energia SA are among the potential bidders, according to industry sources.(Reuters, https://www.reuters.com/article/us-brazil-power-venezuela/firms-flock-to-power-auction-for-troubled-brazil-state-near-venezuela-idUSKCN1SF2MA)

 

Economy & Finance

Meet Venezuela's jilted creditors

Since December a handful of lawsuits have been brought against Venezuela and its state-owned oil company, PDVSA, over unpaid debts. One of the most recent comes from Siemens-owned DRESSER RAND. The oil-and-gas-equipment manufacturer is seeking US$ 132 million from PDVSA to cover missed interest payments and other fees. That suit followed another by Connecticut-based hedge fund CONTRARIAN Capital Management for US$ 182 million in unpaid promissory notes from PDVSA. Its subsidiary, Red Tree Investments, snapped the securities up from GE Capital at the start of the year. Given the ongoing power struggle at the highest echelons of the Venezuelan state, one firm has been told to wait for now, while the other is likely to face a similar fate. Earlier this week, US District Judge Alison Nathan granted the opposition government led by Juan Guaidó its request for a stay in the ongoing case with Red Tree. The stay is set to last 120 days, meaning no legal proceedings will take place during that time. Other firms have also filed lawsuits, including London-based hedge fund PHARO Management and another hedge fund registered in Panama City, BROKWEL Management. Given the opposition government's recent success in the courts, however, the more litigious of the creditors might want to rethink their strategy. (FT Alphaville: https://ftalphaville.ft.com/2019/05/10/1557486677000/Meet-Venezuela-s-jilted-creditors/)

 

Politics and International Affairs

Arrest of key legislator draws condemnation as Maduro tightens pressure on opposition

European and Latin American countries have condemned the arrest of a top lawmaker who backed calls for a military uprising against Nicolás Maduro. Edgar Zambrano, vice president of the opposition-controlled National Assembly in Venezuela, was leaving his Democratic Action party’s headquarters on Wednesday when he was detained by members of Maduro’s intelligence agency who surrounded his car. Zambrano was arrested by the regime's intelligence services on Wednesday. The SEBIN intelligence police towed Zambrano's car with the 64-year-old lawmaker inside it after he refused to step out outside the headquarters of his Democratic Action Party.  After a half-hour standoff, the SEBIN simply towed his car away while he remained in it. People who witnessed the incident shouted “assassins!” at the armed intelligence agents, who are loyal to the Maduro government. Zambrano tweeted, “Democrats will keep fighting!” as he was being whisked away to prison. The detention of Zambrano – who was among those who joined Guaidó’s fruitless attempt to spark a pre-dawn uprising against Maduro on 30 April – sparked a wave of domestic and international condemnation. “Maduro’s arrest of … Zambrano breaches parliamentary immunity and is a clear violation of the constitution,” tweeted the British foreign secretary, Jeremy Hunt. “Feels like the act of a desperate man on borrowed time.” The US state department slammed Zambrano’s “illegal and inexcusable” detention and warned: “If he is not released immediately, there will be consequences.” US President Donald Trump himself spoke out against the arrest on Twitter and signaled his support to Guaidó. He wrote: “I am returning to Washington, D.C. with Senator Rick Scott and Senator Marco Rubio, discussing the terrible abuses by Maduro. America stands with the GREAT PEOPLE of Venezuela for however long it takes!” The Lima Group, which includes a dozen Latin American countries and Canada, said his arrest was unconstitutional because his parliamentary immunity was illegally lifted. The European Union condemned the arrest of Zambrano, saying it formed part of Maduro's strategy to subjugate the opposition-held legislature. "Zambrano's arrest is a politically motivated action aimed at silencing the National Assembly," said an EU spokesperson. "The EU will continue to react, through its different policy instruments, to further erosion of democratic institutions, the rule of law and human rights." Legislators Américo de Grazia and Mariela Magallanes are both in the Italian embassy, while their colleague Richard Blanco has gone to the Argentine embassy. They are among 10 lawmakers stripped of immunity after a pro-Maduro tribunal said they should be investigated for conspiracy, rebellion and treason. Seven other National Assembly lawmakers remain at risk of being arrested. Maduro has not tried to arrest National Assembly President Juan Guaidó, who invoked the constitution to assume the position of interim president, arguing that Maduro's re-election last year is considered illegitimate. The arrest of Zambrano appears to be part of a carefully calibrated crackdown on the opposition. Diosdado Cabello, a leading political ally of Maduro, suggested that the government is taking a methodical approach in its struggle with the opposition. “We're not in a rush,” Cabello said. On Thursday, General Miguel Rodríguez Torres, a former spy chief who became a government critic, was also transferred by military police to a maximum-security cell at a Caracas military base, his political movement said. Rodríguez Torres was arrested a year ago. In a televised address on Wednesday night, Maduro claimed “victory” over the 30 April plotters and promised to dedicate himself to rescuing Venezuela’s collapsed economy. But other top Chavistas are more cautious and warn there may be further attempts to topple their embattled leader in the days ahead – a view shared by many political observers in Caracas. “There could be a repeat – today, in two hours, in a week, in a fortnight,” Freddy Bernal, a senior Socialist party figure, told state television on Tuesday. Maduro’s regime has so far avoided arresting Guaidó, which would likely provoke a stronger international backlash. But the recent measures suggest the ruling Socialist Party is seeking to isolate him by pursuing key political allies. (PBS: https://www.pbs.org/newshour/world/arrest-of-venezuelan-opposition-figure-draws-condemnation; BBC News: https://www.bbc.com/news/world-latin-america-48224790; VOA: https://www.voanews.com/a/venezuela-maduro-tightens-pressure-on-opposition/4910662.html; Reuters: https://www.reuters.com/article/us-venezuela-politics/venezuelan-lawmakers-seek-refuge-in-embassies-after-crackdown-on-Guaidó-allies-idUSKCN1SF1YK; Local 10: https://www.local10.com/news/venezuela/venezuela-s-maduro-defies-trump-s-warnings-on-Guaidó; VOX: https://www.vox.com/2019/5/9/18540091/venezuela-Guaidó-maduro-zambrano-arrest; Express: https://www.express.co.uk/news/world/1124978/venezuela-news-nicolas-maduro-juan-Guaidó-arrest-donald-trump)

 

Venezuela's opposition vow to defy Maduro after key figure detained

Opposition politicians battling to bring down Venezuela’s strongman leader, Nicolás Maduro, have vowed to continue their struggle after the detention of one of their movement’s key figures signaled the start of a major crackdown. Interim president Juan Guaidó on Thursday called for nationwide rallies to protest the arrest of Edgar Zambrano, an opposition figure and vice president of the democratically elected National Assembly. "This Saturday, we return to streets across the country to defend every Venezuelan represented in the National Assembly," Guaidó said, referring to the opposition-held legislature. "It is up to us to remain united and mobilized until we achieve freedom." “We take it as a given that the regime is going to keep escalating its repression,” Guaidó said at a news conference, referring to Zambrano’s arrest. Guaidó accused Maduro’s regime of “kidnapping” Zambrano, who was taken to El Helicoide, a notorious political prison in Venezuela’s capital, Caracas. He portrayed the arrest and targeting of members of the assembly as acts of desperation by a government whose leaders don’t know who to trust. He also called for Venezuelans to take to the streets on Saturday for fresh protests against Maduro on Saturday. “They won’t get us out of the streets,” said Guaidó, whose public appearance in Caracas reflected his belief that Maduro does not have the confidence to arrest him. Juan Andrés Mejía, one of the targeted deputies, told the Guardian the group would not be cowed by Maduro’s “absolutely illegal and unconstitutional” counterattack. “This is not going to work … You are not going to solve Venezuela’s problems by persecuting and imprisoning people. There are just too many of us who want change,” said Mejía, a close Guaidó ally and member of his party, Voluntad Popular (Popular Will).(DW: https://www.dw.com/en/venezuelas-juan-Guaidó-calls-for-return-to-streets/a-48681844; The Guardian: https://www.theguardian.com/world/2019/may/09/venezuela-maduro-Guaidó-crackdown-edgar-zambrano=

 

'We need to know why': Lawmakers wary as Trump aides weigh military options for Venezuela

Talk of possible U.S. military action in Venezuela is prompting bipartisan concern in Congress, where Democrats and Republicans alike cautioned against a rush toward intervention amid escalating rhetoric from Secretary of State Mike Pompeo and National Security Adviser John Bolton. U.S. intervention would be highly controversial and could spark a political backlash, in the United States and across the hemisphere. "What would our military’s mission be in Venezuela?” said Sen. Todd Young, an Indiana Republican, who sits on the Foreign Relations Committee. “Would the administration push for our military to conduct regime change?” The Marine Corps veteran has called for immediate congressional hearings on the issue and said he wants several “threshold questions” answered by President Donald Trump's top advisers. On Thursday, Trump denied a Washington Post report he is frustrated with Bolton's hardline position on Venezuela and that Bolton was pushing him into a war he didn't want. “John’s very good. He has strong views on things which is okay," Trump told reporters on Thursday. "I’m the one who tempers him ... I have John Bolton and I have people who are a little more dovish than him.” Any move by the Trump administration to send American forces to Venezuela would require congressional authorization, Young and other lawmakers said. That, in turn, would require Pompeo and others to make a compelling case to Congress and the American public that such a move is warranted. And there seems to be little political appetite among lawmakers for approval of such a move. Even some hawkish Republicans who have championed a U.S. military role in Venezuela seemed to shy away from a direct U.S. confrontation with Maduro’s military forces when pressed on the matter. “It’s too early,” Sen. Lindsey Graham, a South Carolina Republican, said Tuesday. Military options should be “on the table,” he said on Tuesday, but “we should really be putting a lot of pressure on Cuba right now.”  Other Republicans said U.S. military involvement in Venezuela, despite a strong desire to see Maduro step down, would only play into Maduro's hands.  “The first step…is calling on the administration to explain their thinking for threatening military action in the press,” said Young, who sits on the Senate Foreign Relations Committee. “If hostilities are imminent, then we need to know why.” Young said the committee's GOP chairman, Sen. James Risch of Idaho, shares his concerns and has promised to work on his request for hearings, although those might be closed-door sessions. (USA Today: https://www.usatoday.com/story/news/world/2019/05/09/lawmakers-not-comfortable-us-troops-venezuela-back-Guaidó-maduro/1137011001/)

 

Pence warns Venezuela’s Maduro harboring Iran-backed terrorists

 “The Iranian regime has been working with Venezuela’s corrupt dictatorship to establish a safe haven for its terrorist proxies,” U.S. Vice President Mike Pence said in a May 7 address to the Council of the Americas. “Hezbollah is working to extend its dangerous network throughout Venezuela, and from there, throughout our hemisphere,” Pence said.  “Venezuela is a failed state,” Pence said. “And as history teaches, failed states know no boundaries. Drug traffickers, criminal gangs, terrorist groups seeking to destabilize the region and profit from the misery of the Venezuelan people every day.” Pence pointed to an Iranian connection in Venezuela by citing last month’s “very public launch of direct air service between Caracas and Teheran by Mahan Air, a blacklisted airline controlled by Iran’s Revolutionary Guards Corps, which President Trump recently designated as a terrorist organization.” The vice president also denounced Maduro confidant and cabinet member Tareck El Aissami, who has been sanctioned by the United States as a drug kingpin and the European Union as a human rights violator. Pence described him as “a drug runner and a money launderer who partners with terrorist networks to bring Iran-backed terrorists into the country.”  “The struggle in Venezuela is the struggle between dictatorship and democracy,” Pence said Tuesday. “Nicolas Maduro is a dictator with no legitimate claim to power, and Nicolas Maduro must go.” (World Tribune: https://www.worldtribune.com/pence-warns-venezuelas-maduro-harboring-iran-backed-terrorists/)

 

Sen. Marco Rubio: China ‘controlling defense cyber operations’ in Venezuela

The Chinese government has actively helped Venezuelan dictator Nicolás Maduro control, censor, and shut down the Internet in his quest to keep the legitimate president of the country, Juan Guaidó, from governing, Sen. Marco Rubio (R-FL) told Breitbart News in an interview Monday. Rubio suggested that Beijing may be distancing itself from Maduro because the tide has shifted so definitively against him in Latin America that the rest of the region may sour on investments with China if it interferes to help him. That does not mean China is not helping Maduro, merely that it cannot afford the bad press, Rubio stated. “The Chinese are very involved. First, they are owed a bunch of money, so they want to get paid,” he explained. “Number two is they are single-handedly helping conduct the Internet control operation. They have basically taken a commercial version of their great Internet firewall and given it to Maduro, and it is a service they are providing him, so they are the ones that are shutting down the Internet and access to social media.” Maduro’s regime regularly cuts nationwide access to the Internet to prevent Guaidó and other opposition leaders from being able to communicate with the masses or organize rallies against him. Guaidó, according to Rubio, has “no access to the media. Any time he tries to speak or communicate on social media, they shut down the Internet. … Literally, every time he holds a rally, they shut down the Internet.” As the Chinese are “single-handedly controlling the defensive cyber operations shutting down the Internet,” they are responsible for silencing Guaidó. Yet being more open about their role could jeopardize investments in other parts of the continent. “The Chinese play a tricky game because on the one hand, they are trying to grow in influence and presence throughout Latin America, so they are seeing all of these countries supporting Guaidó, and they don’t want to … antagonize these countries by being cheerleaders for the Maduro regime,” Rubio noted. (Breitbart: https://www.breitbart.com/latin-america/2019/05/09/marco-rubio-china-controlling-defense-cyber-operations-venezuela/)

 

Is Trump failing in Venezuela?

We finally may have found a peak Donald Trump headline: “A frustrated Trump questions his administration’s Venezuela strategy.” The Washington Post story that goes with it is a classic. It seems that Trump hired John Bolton to be his national security adviser, cleared the path for him to be the main policy maker on foreign affairs, and … is now shocked that Bolton is something of a warmonger and that his schemes don’t produce perfect and painless results overnight. Trump and his aides also aren’t eager to disguise that the president is something of an outsider to his own administration’s policy-making process. Remember: It’s not uncommon for presidents to fight with executive-branch departments and agencies for control over policy. Those bodies have multiple masters. But splits between the president and his own staffers in the White House are far rarer, since such people work directly for, and answer only to, the president himself. Trump has said in recent days that Bolton wants to get him “into a war” — a comment he has made in jest in the past but that now belies his more serious concerns, one senior administration official said. Despite Trump’s grumbling that Bolton had gotten him out on a limb on Venezuela, Bolton’s job is safe, two senior administration officials said, and Trump has told his national security adviser to keep focusing on Venezuela. Trump also spoke approvingly of Russian actions in Venezuela following a lengthy phone call with Russian President Vladimir Putin on Friday, saying that Putin “is not looking at all to get involved in Venezuela other than he’d like to see something positive happen for Venezuela. And I feel the same way. We want to get some humanitarian aid.” U.S. officials think time is on their side and that Maduro will fall of his own weight. Sen. Marco Rubio (R-Fla.), who has been influential in shaping the administration’s Venezuela response, said Trump and Bolton are on the same page. Rubio, who said he spoke to Trump about Venezuela on Tuesday evening, backs the policy of waiting out Maduro. Rubio said some of the harshest U.S. sanctions are only now having full effect, including sowing dissension among Maduro aides. (Bloomberg, https://www.bloomberg.com/opinion/articles/2019-05-09/why-donald-trump-is-failing-in-venezuela; The Washington Post: https://www.washingtonpost.com/politics/a-frustrated-trump-questions-his-administrations-venezuela-strategy/2019/05/08/ad51561a-71a7-11e9-9f06-5fc2ee80027a_story.html)

 

US Secretary of State Pompeo to meet Russian President Putin, FM Lavrov on May 14

Mike Pompeo is to meet Russian President Vladimir Putin and Foreign Minister Sergey Lavrov when he travels to Russia next week, the US State Department said in a statement. The visit comes as the relations between Moscow and Washington are at a new low over accusations of Russian meddling and disagreements over approaches to Venezuela and Iran’s nuclear program. The State Department says they will discuss “the full range of bilateral and multilateral challenges” during a meeting in the southern city of Sochi on May 14. (RT: https://www.rt.com/news/458985-pompeo-travel-russia-date/)

 

Russian FM Lavrov speaks on prospects for US-Russia deal on Venezuela

Russian Foreign Minister Sergei Lavrov has announced that there won’t be any “deals” on Venezuela between Moscow and Washington. "Trump is the one who usually prepares deals", Lavrov remarked. The foreign minister delivered this statement ahead of the upcoming meeting between him and US Secretary of State Mike Pompeo, which is scheduled to take place on 14 May in Sochi. Earlier this week, Lavrov also dismissed speculations about the possibility of a military intervention in Venezuela, stating that Russia opposes “hostilities anywhere in violation of international law”, and that “the use of force may only be authorized by the UN Security Council, or force may be used in response to aggression against a sovereign state”. (Sputnik News: https://sputniknews.com/world/201905091074854135-russia-us-venezuela-deal/)

 

Russia not planning to send more military specialists to Venezuela

Moscow does not plan to send more Russian military specialists to Venezuela, RIA news agency quoted Russian Deputy Prime Minister Yuri Borisov as saying on Thursday. The Kremlin said in March that Russian military specialists are in Venezuela to service pre-existing contracts for the supply of Russian arms. (Journal Pioneer: https://www.journalpioneer.com/news/world/russia-not-planning-to-send-more-military-specialists-to-venezuela-ria-309646/)

 

Ex-Venezuelan spy chief says Venezuelans should 'build a new state'

The ex-head of Venezuela’s SEBIN intelligence service, who was replaced last week after an attempted military uprising against Nicolas Maduro, urged Venezuelans on Thursday to build a new state and combat corruption.

In his first public appearance since Maduro replaced him on April 30, Manuel Christopher said Venezuelans “deserve a better country,” according to a video of Christopher posted on Twitter by Venezuelan TV outlet NTN24. (Reuters, https://www.reuters.com/article/us-venezuela-politics-intelligence/ex-venezuelan-spy-chief-says-venezuelans-should-build-a-new-state-idUSKCN1SF2PO)

 

Venezuelan Embassy’s power cut off in tense Washington standoff

A chaotic political standoff with international diplomatic implications began unfolding quietly weeks ago on a leafy side street in the upscale Georgetown neighborhood of Washington, as a group of American activists moved into the five-story Venezuelan Embassy and made themselves at home. With some 100 Venezuelan diplomats still working inside during the day, the activists from Code Pink and other antiwar groups brought their things to spend the night, sleeping on couches to keep the building occupied around the clock. They said they were guests, invited by the regime of Nicolás Maduro, and their mission was to oppose any American military intervention in the troubled nation. The antiwar activists have been alone in the embassy building since late April, when the American visas for the shoestring embassy staff expired, forcing the diplomats to go home. Appointees of Juan Guaidó, the opposition leader recognized by the United States and some 50 other countries as Venezuela’s interim president, had pledged to take over the embassy, a move those now occupying the facility fear could lead to a reciprocal siege of the American Embassy in Venezuela, and an armed conflict. Late last month, local Venezuelans who support Mr. Guaidó learned of the occupation and descended on the building, demanding that the activists, whom they view as unlawful trespassers, get out. In the ensuing days, tense clashes between the occupiers and the Venezuelans, who are camped in tents surrounding the building, have escalated, prompting nine arrests by the Secret Service. Late on Wednesday, the power company shut off electricity to the embassy, thrusting its occupants into darkness. The protesters outside cheered. The extraordinary stalemate has challenged local authorities and the Trump administration, turning the inoperative embassy into a stand-in for the much larger crisis vexing Venezuela, as Mr. Maduro’s supporters maintain control despite of efforts by the opposition and the United States. The State Department has said it considers their presence to be “unauthorized.” Washington police and the Secret Service have set up a barrier separating the pro-Guaidó camp from Maduro sympathizers and other activists across the street. Late on Wednesday, the power company shut off electricity to the embassy, leaving the activists inside in darkness. Only about 15 people remain in the building,  (The New York Times: https://www.nytimes.com/2019/05/09/us/venezuela-embassy-protests.html)

 

OP-ED: Can the U.S. help Venezuela militarily without use of force? by Sarah Lee

Lawmakers are debating whether the U.S. should proceed with military action in Venezuela to help end the socialist Maduro regime even as debate about whether the U.S. has a responsibility to protect Venezuela — and if there are ways the military can be utilized without use of force. Luis Almagro, Secretary General of the OAS, detailed the reasons he believes the U.S. and other nations would be justified in entering Venezuela and using force if necessary, under UN guidelines covering the “responsibility to protect” policy, or R2P.  While the Trump administration continues conversations with nations such as Russia and Iran, as Secretary of State Mike Pompeo did this week, some are noting that military intervention doesn’t necessarily have to mean use of force. How would it work? U.S. special forces, next door in Colombia to assist that country’s armed forces, would train the Venezuelan opposition in best practices of nonviolent resistance. This includes teaching tactics of dispersal, evading tear gas, erecting barricades, and maintaining command and control in the face of government repression. But can nonviolent resistance work? A new report by the Joint Special Operations University on Support to Resistance (STR) operations suggests it can. With the Maduro regime arresting interim president Juan Guaidó’s ally, National Assembly Vice President Edgar Zambrano, Wednesday, the U.S. may need to decide quickly on just how to help its neighbor to the south. (Town Hall: https://townhall.com/tipsheet/sarahlee/2019/05/09/can-the-us-help-venezuela-militarily-without-use-of-force-n2546111)

 

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.