August 27, 2019

International Trade

Venezuela, Russia sign ports agreement

Warships from Russia and Venezuela can dock at one another’s national ports under an agreement signed earlier this month between Venezuelan Defense Minister Vladimir Padrino López and his Russian counterpart, Defense Minister Sergei Shoigu, in Moscow. The Venezuelan official was in Moscow for nearly a week in mid-August. In a video posted on 15 August on the Twitter account of the Venezuelan military’s press office, Padrino López said bilateral defense ties commenced in 2001 and the new ports agreement will “strengthen these relations.” (Jane’s: https://www.janes.com/article/90647/venezuela-russia-sign-ports-agreement)

 

Venezuela Parliament says military agreement with Russia ‘unconstitutional’

Venezuela's National Assembly controlled by the opposition declared null and void a new agreement with Russia on military cooperation. The declaration was published on Monday. The document concerns "the agreement on military cooperation between the governments of Venezuela and Russia, signed by defense ministers Vladimir Padrino Lopez and Sergey Shoigu." "This agreement was not considered either by a commission on foreign policy, sovereignty and integration or by parliament, which makes it unconstitutional, and this means that it is null and void," the declaration said, calling it unconstitutional. The parliament also said that opening a Venezuelan embassy in North Korea was "a violation of the constitution", TASS reported. On August 15, Shoigu and Lopez signed an agreement on reciprocal visits of military ships at the meeting in Moscow. The defense ministers also discussed the situation in Venezuela and issues of bilateral military cooperation. (TASNIM News Agency: https://www.tasnimnews.com/en/news/2019/08/27/2084075/venezuela-parliament-says-military-agreement-with-russia-unconstitutional)

 

Oil & Energy

China's July Venezuela oil imports fall over U.S. sanctions

China’s crude oil imports from Venezuela plunged 62% in July from the previous month, Chinese customs data showed on Sunday, as growing tension between Washington and the Maduro regime made buyers wary of taking oil from this nation. Arrivals of crude oil from Venezuela were 703,742 tons last month, or 165,720 barrels per day (bpd), data from the General Administration of Customs showed. That is down from 275,646 bpd in June. With U.S. sanctions on Venezuela having already driven away many of its oil buyers, the Trump administration in early August kept up the pressure by threatening sanctions on any company that works with Maduro’s government. Venezuela’s oil exports fell 17.5% in July to their second lowest since Washington imposed the sanctions in January, according to internal data from the company and REFINITIV EIKON. China National Petroleum Corp, a leading buyer of Venezuelan oil, has halted loadings in August amid concerns over potential hits by the secondary sanctions. REFINITIV Oil Research showed only three cargos carrying a total 540,000 tons of crude have left from Venezuela for China so far this month, half of the figure in July. For the first seven months of the year, China’s imports of Venezuela crude oil fell 13.4% on a year earlier to 9.37 million tons, or 322,601 bpd. (Reuters: https://www.reuters.com/article/us-china-economy-trade-crude/chinas-july-venezuela-oil-imports-fall-over-us-sanctions-idUSKCN1VF06N; Lloyd’s List: https://lloydslist.maritimeintelligence.informa.com/LL1128939/VenezuelaChina-oil-flows-fail-to-stem-plunging-tanker-demand)

 

Half of Venezuela's oil rigs may disappear if U.S. waivers lapse

A looming U.S. sanctions deadline is threatening to clobber Venezuela’s dwindling oil-rig fleet and hamper energy production in the nation with the world’s largest crude reserves. Almost half the rigs still operating in Venezuela will shut down by Oct. 25 if the Trump administration doesn’t extend a 90-day waiver from its sanctions, according to data compiled from consultancy Caracas Capital Markets. That could further cripple this nation’s production because the structures are needed to drill new wells crucial for even maintaining output, which is already near the lowest level since the 1940s. (Bloomberg, https://www.bloomberg.com/news/articles/2019-08-22/trump-takes-aim-at-oil-rigs-crucial-to-venezuela-s-energy-future)

 

CITGO profits hit by fallout from split, sees 2H improvement -CEO

The two new top executives at CITGO Petroleum disclosed this week that net income in the second quarter slid to less than half its level a year earlier, hit by a broad slump for the refining industry as well as complications from U.S. sanctions on Venezuela and CITGO’s split with state-run oil company PDVSA. Chief Executive Officer Carlos Jorda and Chairwoman Luisa Palacios on Thursday laid out a plan to rebuild profits, pay down debt and invest in operations after a jarring split this year from parent Petroleos de Venezuela (PDVSA). But they conceded that their plans could be complicated by U.S. sanctions on Venezuela which have affected relationships with suppliers and partners. One contentious issue is whether CITGO or another PDVSA subsidiary is responsible for a payment of almost US$ 1 billion due to bondholders this fall. Houston-based CITGO, the eighth-largest U.S. refiner, ousted its CEO and other top executives early this year and halted all dealings with PDVSA after Washington levied sanctions on Venezuela intended to force Nicolas Maduro from power. (Reuters, https://www.reuters.com/article/citgo-ceo/citgo-profits-hit-by-fallout-from-split-sees-2h-improvement-ceo-idUSL2N25J0LQ)

 

Explosion rocks Venezuela oil plant

An explosion rocked a natural gas-filling plant in the Venezuelan state of Miranda, forcing the evacuation of 6,500 residents, TELESUR reports, adding the Venezuelan government has called the event an act of sabotage. The explosion caused no fatalities with only one worker at the plant reported injured. According to a report in the leftist daily Morning Star, “The attacks were branded ‘terrorism’ by the Maduro regime. This is the latest in a string of accidents that highlight the precarious energy situation in sanction-bound Venezuela. Earlier this year, several blackouts crippled the country, with the government calling them a sabotage as well. The latest blackout, in July, Caracas blamed on an electromagnetic attack. The blackouts hit Venezuela’s oil industry particularly hard, leading to a suspension of operations at crude upgraders and its main oil export terminal. (Oil Price: https://oilprice.com/Latest-Energy-News/World-News/Explosion-Rocks-Venezuela-Oil-Plant.html)

 

Economy & Finance

Cold, hard euros: Venezuela turns to European cash after U.S. sanctions

From supermarket checkouts in the capital Caracas to electronics stores in the central city of Maracay, Venezuelans struggling with hyperinflation and a deep economic crisis are turning to a new form of payment: euros in cash. Runaway inflation that has made even large piles of the local bolivar currency worthless - combined with the socialist government’s relaxation of restrictions on the use of foreign currency - has encouraged Venezuelans to turn to dollar bills for everyday transactions in the past year. But in the past four months, euros have also started proliferating in markets and stores here. With the stock of dollars in circulation still far greater than euros, Venezuelan merchants tend to quote items at the same price in the European and U.S. currency - ignoring the euro’s higher value on international markets. (Reuters, https://www.reuters.com/article/us-venezuela-economy-euros/cold-hard-euros-venezuela-turns-to-european-cash-after-u-s-sanctions-idUSKCN1VD195)

 

Politics and International Affairs

Guaidó vows to shun early election

Venezuela's National Assembly President and interim President Juan Guaidó said Friday that opponents of Nicolás Maduro won't participate in any early legislative elections he calls amid a protracted power struggle. Guaidó said in an interview with The Associated Press that it would be a "farce" to participate in any election with the Maduro regime still in control of the country. The man recognized by the U.S. as Venezuela's rightful leader also said he plans to keep the self-claimed title of "acting president" even after his one-year term as leader of the opposition-controlled National Assembly ends in the new year. "We are very clear that we're going to continue until the point that elections in Venezuela are in reality free," Guaidó said. He contended there are signs Maduro's government is weakening, alleging it is resorting to torturing opponents while growing isolated from its people and the international community. Socialist party chief Diosdado Cabello, a key Maduro ally, has said elections for the National Assembly — the most important opposition-dominated institution in Venezuela — could be held in January or earlier. The legislature's five-year term is set to end in December 2020 and elections are traditionally held in the last month of its term. (AP: https://news.yahoo.com/venezuela-opposition-leader-vows-boycott-164911841.html)

 

The price of removing Nicolas Maduro from office may be amnesty for his deputies, by Eli Lake

No one should take Venezuelan dictator Nicolas Maduro’s words at face value. That applies to his claims last week that his regime is in secret negotiations with “high-ranking” American officials. His comments were almost certainly a gambit to divide the opposition during the on-again, off-again negotiations over new elections being brokered by the Norwegian government. They were a ploy to make the internationally recognized but largely powerless government of interim President Juan Guaidó believe that U.S. President Donald Trump was negotiating behind its back. That said, there is a kernel of truth buried in Maduro’s fiction. Trump also acknowledged talks at “a very high level” last week. U.S. National Security Adviser John Bolton has said these contacts are not authorized by Maduro and are aimed at ushering in free elections. So: America is talking to Maduro’s deputies — about how to get rid of Maduro. If the apparatchiks who preach socialism are now looking to protect their fortunes and stay out of jail, that may mean the collapse of the regime is nigh. At the same time, this back and forth highlight just how unsatisfactory the fall of Maduro is likely to be. His ouster will require the cooperation of his enablers — and the price of their cooperation, at a minimum, will be amnesty. Guaidó and his supporters have been keenly aware of this dilemma since January, when most of the Western Hemisphere recognized him as interim president of Venezuela. One of his first acts was to press the National Assembly to pass an amnesty law for civilian and military officials who worked to restore constitutional government. At the time, Human Rights Watch, which has documented much of the Maduro regime’s crimes, criticized the law for being dangerously vague and overbroad. More than eight months into his efforts to oust Maduro, however, some details are coming into focus — namely, the kinds of scoundrels that will evade justice in exchange for turning on Maduro. As one senior U.S. official told me, the U.S. has delivered messages to Maduro’s deputies, often through intermediaries, that they are interested not in vengeance but only in an orderly transition to free and fair elections. (Bloomberg: https://www.bloomberg.com/opinion/articles/2019-08-26/ousting-venezuela-s-maduro-may-require-amnesty-for-his-deputies)

 

U.S. sanctions on Venezuela undercut talks, key Maduro ally says

U.S. sanctions against Venezuela are making successful talks with the opposition impossible, said a key ally of Nicolas Maduro, demanding that President Donald Trump immediately act to drop them. "The stone in the way of any negotiation is sanctions," Tarek William Saab, Venezuela’s public prosecutor, said in a rare interview at the Public Prosecutor headquarters office in downtown Caracas. "It is a shot in the foot of any negotiation because how can you negotiate with a gun pointed at your head?" (Bloomberg, https://www.bloomberg.com/news/articles/2019-08-23/u-s-sanctions-on-venezuela-undercut-talks-key-maduro-ally-says)

 

Argentina poised to abandon Venezuela’s opposition

Election-bound Argentina is poised to withdraw from the vocal bloc of Latin American nations that supports Venezuela's political opposition and recognizes its leader, Juan Guaidó, as the country's interim president. Alberto Fernandez, the leading candidate to replace Argentina's president Mauricio Macri in 27 October elections, is signaling that his administration would not seek to remove Nicolas Maduro. If Fernandez and his unrelated running mate and former president Cristina Fernandez de Kirchner win the presidency, Buenos Aires would likely pull out of the Lima Group of Latin American countries and Canada that have been seeking to isolate the Maduro government in favor of a transition administration led by Guaidó. In a 25 August television interview, Alberto Fernandez made it clear that he disagreed with Macri who has long denounced Maduro's government as a dictatorship. "It is very difficult to qualify an elected government as a dictatorship. An elected government can become an authoritarian government," Fernandez said, explicitly challenging the position of the Lima Group, the US and most EU countries, which assert that Maduro was fraudulently re-elected in May 2018. "The institutions are working there, we can then discuss how they work, but formally there is an assembly, there are courts. A dictatorship generally lacks these things," he added in explaining why he does not deem Venezuela to be a dictatorship and prefers to describe Maduro's government as authoritarian. A Fernandez administration would bring Argentina closer in line to the stance of Uruguay and Mexico, which advocate non-intervention in Venezuela and object to extensive US financial and oil sanctions on the country. "I do not agree with all these proposals that line up Latin America behind (US president Donald) Trump and I value the proposal that was made by (Mexican president Manuel) Lopez Obrador and (Uruguayan president) Tabare Vazquez and I think I would add myself to those two to try to help find a solution for Venezuela," Fernandez said in the television interview. (Argus: https://www.argusmedia.com/en/news/1965727-argentina-poised-to-abandon-venezuelas-opposition?backToResults=true)

 

Maduro looks to North Korea for support – opens first embassy in Pyongyang

The deterioration of Venezuela’s relations with the Western world, imposition of harsh Western economic sanctions and open calls for regime change by the United States and many of its allies have led Caracas to strengthen ties with several Western adversaries since 2017. The country’s ties with Russia and China have been highly prolific, but a quieter but less conspicuous partnership which has been built has been that between Venezuela and North Korea. In December 2018 North Korean Presidium President and Head of State Kim Yong Nam paid a state visit to Caracas, and it was widely speculated that defense and economic cooperation was under discussion. North Korea opened an embassy in Caracas four years prior. Furthering a trend towards greater cooperation, on August 21^st, 2019, the Maduro regime opened its first embassy in Pyongyang which was attended by the deputy foreign ministers of both states. Maduro’s Deputy Foreign Minister Ruben Dario Molina stated at the event: “the people and leaders of Venezuela and the North Korea have become a target for attacks and threats by North American imperialism, which seeks to put us on their knees because of our implacable ideology and the desire to achieve economic and social progress.” His Korean counterpart Pak Myung Guk stated: “the government of the DPRK (North Korea) is constantly in its desire to expand and develop a relationship of friendship and cooperation with Venezuela, which are being placed in the flame of the general anti-imperialist struggle for independence and socialism.” (Check Point Asia Net: https://www.checkpointasia.net/venezuela-looks-to-north-korea-for-support-opens-first-embassy-in-pyongyang/)

 

Venezuelans stranded as Ecuador imposes new visa rules

Ecuador on Monday joined Peru and Chile in restricting Venezuelan immigration. To enter the country, Venezuelans now need to provide a criminal record, apply for a visa before arrival and present a valid passport. As the deadline neared, many Venezuelans in Ecuador rushed home to retrieve family members. Thousands more rushed east from their homes in Venezuela, eager to start a life in Ecuador that would soon be much harder to achieve. The last-minute wave sowed chaos for immigration officials on both sides of the Ecuador-Colombia border. Migrants waited hours in bitterly cold temperatures as they navigated immigration processes. Temperatures dropped to six degrees Celsius and many slept huddled together in blankets as they queued, in some cases overnight. Colombian migration officials did not know the exact number of Venezuelans who crossed before the border closed on Sunday, but a director at the Rumichaca office told Al Jazeera that more than 11,000 Venezuelans had crossed as of 6pm, well before the midnight deadline. According to Colombian immigration officials on the Venezuelan border in Cucuta, there are still more on the way. The chaos was not limited just to Colombia as masses of migrants huddled in Ecuador as well, waiting to be processed. Passports can cost several months’ salary for most Venezuelans, though many migrants told Al Jazeera the actual price is much higher when one factors in necessary bribes of US$ 100 to US$300. In a country where the monthly minimum wages has fallen to below US$ 5, that is beyond the reach of most Venezuelans. (Al Jazeera: https://www.aljazeera.com/news/2019/08/venezuelans-stranded-ecuador-imposes-visa-rules-190826134509203.html)

 

Venezuelan socialist defiant as US sanctions threaten baseball

Venezuela's upcoming baseball season will go on "even if we have to play ourselves," socialist party No. 2 Diosdado Cabello said on Monday, criticizing a move by US-based Major League Baseball to restrict players from participating because of US sanctions. MLB said last week it would suspend involvement in the Venezuelan league, which starts play in October, while it awaited word from the US government on whether its players' participation was consistent with Washington's sanctions on this nation, which are meant to force out socialist Nicolas Maduro. While the number of Venezuelan major league stars returning to their baseball-mad homeland to play has declined in recent years because of security issues and an economic crisis, many of the players on the Venezuelan league's eight professional teams also play for one of MLB's hundreds of minor-league affiliates. (The Sydney Morning Herald: https://www.smh.com.au/world/south-america/even-if-we-have-to-play-ourselves-venezuelan-socialist-defiant-as-us-sanctions-threaten-baseball-20190827-p52l2q.html)

 

Russia, China offer to help Venezuela in preparing for 2020 Olympics — Maduro

Russia and China have offered to help Venezuelan athletes to prepare for the next Summer Olympic Games, Nicolas Maduro claimed on Thursday. "Russia and China have offered us special help in training," Maduro said at a meeting with young athletes that was broadcast on Twitter. He said that "many athletes" will be able to go to Russia and China for training. "I am confident that we will show our best results in history at the Tokyo Olympics," Maduro noted. The next Summer Olympic Games will be held in Japan's Tokyo in July-August 2020. (TASS: https://tass.com/world/1073700)

 

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.

 

August 20, 2019

International Trade

Cargo arrivals reported at Puerto Cabello

The local port authority is reporting the arrival of 10,743 ton of assorted merchandise at Puerto Cabello, including auto parts, personal care products, chemicals, textiles, and appliances, aboard vessels AS FABIANA, NIKOLAS, PERITO MORENO, CAP BEATRICE, CONTSHIP ZOE, FS IPANEMA and CFS PALAMEDES. It also reports the arrival of 81,290 tons of bulk products, such as 30,000 tons of soy on the BOSPHORUS PRINCE, and 40,000 tons of White corn aboard the CORAL ISLAND. More in Spanish: (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=43614)

 

Logistics & Transport

Vessels from Venezuela can still transit Panama Canal

The Panama Canal will allow vessels coming from Venezuela to transit the waterway provided they present the necessary paperwork, the canal authority’s chief said on Wednesday, suggesting a new round of U.S. sanctions on this country may not make any difference to canal traffic. (Reuters, https://www.reuters.com/article/us-panamacanal-venezuela/vessels-from-venezuela-can-still-transit-panama-canal-authority-idUSKCN1V41WM)

 

Oil & Energy

China CNPC suspends Venezuelan oil loading, worried about U.S. sanctions

China National Petroleum Corp, a leading buyer of Venezuelan oil, has halted August loadings following the latest set of U.S. sanctions. Two Beijing-based senior sources with direct knowledge of the matter told Reuters on Monday. "Trump's executive order gave a directive for the follow-up sanction measures that shall be announced by the U.S. Treasury... CNPC is worried that the company is likely to be hit by the secondary sanctions," said one source. A second person, an executive with a key marketer of Venezuelan oil in China, said his company had been notified of the suspension. "We were told that CHINAOIL will not load any oil in August. We don't know what will happen after." CHINAOIL is the trading vehicle of CNPC that lifts Venezuelan oil under term contracts and is one of Caracas' top oil clients. CNPC will wait for more guidelines from the U.S. Treasury before further moves in dealing with Venezuelan oil, said the first source. The suspension followed recent communications between the U.S. and Chinese governments, including a meeting between U.S. embassy officials in Beijing and top management at CNPC, the source added. Beijing has become increasingly pragmatic in recent years in an amply supplied global oil market and as Venezuela's economy plunged deeper into recession. For the first six months of this year, China imported 8.67 million tons of crude oil from Venezuela, or roughly 350,000 barrels per day, about 3.5% of its total imports, according to Chinese customs data. (Reuters, https://www.reuters.com/article/us-china-venezuela-oil-cnpc/china-cnpc-suspends-venezuelan-oil-loading-worried-about-u-s-sanctions-sources-idUSKCN1V909C)

 

Maduro battles for control of US-based refinery

The regime of President Nicolas Maduro on Thursday nullified the newly named board of Venezuela’s prized CITGO refineries in the U.S. amid a political battle for control of the country, saying opposition leaders had no right to appoint them. The opposition-run National Assembly appointed the 15-member CITGO board early this year after Guaidó declared presidential powers, arguing that Maduro’s re-election was illegitimate. CITGO is valued at an estimated $8 billion and includes three refineries in Louisiana, Texas and Illinois, in addition to a network of pipelines. Citgo is also at the center of court battles, such a lawsuit filed by Crystallex, which seeks to liquidate CITGO for payment following a disputed takeover of the Canadian mining firm by Venezuela’s late President Hugo Chavez. Russ Dallen, head of the Miami-based Caracas Capital Markets brokerage firm, said U.S. courts have already weighed in on who controls CITGO, deferring to the U.S. government’s recognition of Guaidó as Venezuela’s president, therefore recognizing his board appointments. Maduro’s state comptroller Elvis Amoroso, who made the announcement on state TV, also said the ad-hoc board members are banned from leaving the country and their Venezuelan bank accounts have been frozen. But it is unclear whether any of them continue to live here. Amoroso also said another five leading figures opposed to Maduro have been banned from politics for 15 years. They include former Attorney General Luisa Ortega, former Caracas Mayor Antonio Ledezma and three opposition lawmakers, all of whom are living in self-imposed exile. So far this year, Maduro’s government has stripped 18 opposition lawmakers of their immunity, exposing them to criminal prosecution in a sigh of heightened political tensions. (WTOP: https://wtop.com/latin-america/2019/08/venezuelas-maduro-battles-for-control-of-us-based-refinery/)

 

Economy & Finance

Turkish BANK ZIRAAT closes door on Venezuela amid U.S. sanctions

ZIRAAT BANK, Turkey’s largest bank by assets, has stopped offering services to Venezuela’s Central Bank in wake of tougher U.S. sanctions that raise the stakes for companies that do business with the Caribbean nation. The Ankara-based state bank confirmed the closing of its account without providing further details. Venezuela’s Central Bank was relying on ZIRAAT to pay contractors, move money and import products in Turkish liras. (Bloomberg: https://www.bloomberg.com/news/articles/2019-08-15/turkish-bank-ziraat-closes-door-on-venezuela-amid-u-s-sanctions)

 

Politics and International Affairs

In Venezuela talks, Maduro allies said they would consider fresh elections

Allies of Nicolas Maduro had discussed holding a presidential election in the coming months during talks to find a breakthrough in the country’s political crisis, four sources told Reuters on Monday. Opposition politicians will travel to Washington to speak to U.S. officials this week, the sources said. Maduro representatives and a delegation representing opposition leader Juan Guaidó have been meeting in Barbados as part of talks to resolve a political stalemate in the struggling nation that is suffering from a hyperinflationary economic collapse. Guaidó’s delegation had proposed a presidential vote in six to nine months on several conditions including changes to the election’s council and supreme court, said the sources, who asked not to be identified because the talks are confidential. The government had in theory agreed to a presidential vote on the condition that the United States lift economic sanctions, Maduro be allowed to run as the Socialist Party candidate, and that the vote be held in a year, one of the sources said. U.S. officials have expressed support for an election but without Maduro as a candidate, which may be a point of discussion, two of the sources said. Preparing groundwork for an election requires a raft of changes to state institutions, including both the elections council and the supreme court - both of which have aggressively intervened in election processes to favor Maduro. Another possible roadblock would be the existence of the Constituent Assembly, an all-powerful legislative body controlled by Socialist Party supporters that opposition leaders say could also intervene in any potential vote. (Reuters: https://www.reuters.com/article/us-venezuela-politics/in-venezuela-talks-maduro-allies-said-they-would-consider-fresh-elections-sources-idUSKCN1V91SF)

 

US talks secretly to Venezuela socialist boss

The U.S. has opened secret communications with Venezuela’s socialist party boss as members of Nicolás Maduro’s inner circle seek guarantees they won’t face retribution if they cede to growing demands to remove him, a senior U.S. administration official has told The Associated Press. Diosdado Cabello, who is considered the most-powerful man in Venezuela after Maduro, met last month in Caracas with someone who is in close contact with the Trump administration, said the official. A second meeting is in the works but has not yet taken place. The talks are still preliminary. It’s not clear whether the talks have Maduro’s approval or not. Cabello, 56, is a major power broker inside Venezuela, who has seen his influence in the government and security forces expand as Maduro’s grip on power has weakened. But he’s also been accused by U.S. officials of being behind massive corruption, drug trafficking and even death threats against a sitting U.S. senator. The administration official said that under no circumstances is the U.S. looking to prop up Cabello or pave the way for him to substitute Maduro. Instead, the goal of the outreach is to ratchet up pressure on the regime by contributing to the knife fight the U.S. believes is taking place behind the scenes among competing circles of power within the ruling party. Similar contacts exist with other top Venezuelan insiders, the official said, and the U.S. is in a listening mode to hear what it would take for them to betray Maduro and support a transition plan. At a press conference Monday, Cabello shied away from discussing any details of the meeting, at one point likening it to “a lie, a manipulation.” But he also said he has long stood welcome to talk to anyone, so long as any discussions take place with Maduro’s approval. An aide said the U.S. has been increasingly knocking on Cabello’s door, desperately looking to establish contact. The aide rejected the notion Cabello was somehow betraying Maduro, saying that Cabello would only meet with Americans if it contributes to lifting sanctions, he blames for crippling the oil-dependent economy. The aide spoke on the condition of anonymity because he isn’t authorized to discuss political affairs publicly. The U.S. has repeatedly said it would offer top socialists’ relief from sanctions if they take “concrete and meaningful actions” to end Maduro’s rule. As head of the constitutional assembly, Cabello has the power to remove Maduro, a position that could come in handy in any negotiated transition. The news site AXIOS reported Monday morning that Mauricio Claver-Carone is the U.S. official that has been in contact with Diosdado Cabello, the number two man in Venezuela and President of the polemical Constituent Assembly legislative. An opposition politician briefed on the outreach said Defense Minister Vladimir Padrino and Interior Minister Néstor Reverol are among those in indirect contact with the Americans, underscoring the degree to which Maduro is surrounded by conspirators even after an opposition-led military uprising in April was easily quashed. (AP: https://www.apnews.com/a3e6b0da8c5648558e61bbaa466fbb42; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2482306&CategoryId=10717)

 

82% of Venezuelans polled believe Maduro should leave office in 2019

The latest poll by DATANALISIS shows 85.1% of the population has a negative view of the Maduro administration, and only 12.9% called it positive. 64.8% of Venezuelans pointed to the economy as the worst problem they are facing, and 18.3% mentioned social issues, as well as 16.3% pointed to political issues. More in Spanish: (El Nacional, https://www.elnacional.com/venezuela/datanalisis/)

 

US Southern Command head focused on ‘day after’ in Venezuela

The head of U.S. Southern Command says military officials are focusing on preparing for “the day after” once an “isolated” Nicolás Maduro leaves power. Navy Adm. Craig Faller warned Monday against Venezuela’s “formidable weapon system” and criticized Cuba, Russia and China for assisting Maduro, saying it was important to put “continuous pressure” on the “illegitimate regime” and organize humanitarian efforts. (Military Times: https://www.militarytimes.com/video/2019/08/06/saudi-special-forces-go-all-out-for-hajj-display/)

 

Trump has considered naval blockade of Venezuela

President Trump has reportedly suggested that the U.S. place ships along the coast of Venezuela to blockade goods from coming into the fraught nation. According to five current and former officials, the Pentagon hasn’t taken the suggestions by the president seriously because of its impracticability and because it would divert naval assets away from countering Iran and China, Axios reported. “He literally just said we should get the ships out there and do a naval embargo,” one official said. “Prevent anything going in.” “I’m assuming he's thinking of the Cuban missile crisis,” the official added. “But Cuba is an island and Venezuela is a massive coastline. And Cuba, we knew what we were trying to prevent from getting in. But here what are we talking about? It would need massive, massive amounts of resources; probably more than the U.S. Navy can provide.” (Washington Examiner: https://www.washingtonexaminer.com/news/trump-has-considered-naval-blockade-of-venezuela)

 

Russia warns US against imposing blockade on Venezuela

Russia on Tuesday warned the U.S. against "incautious steps" in tightening sanctions on Venezuela, and throwing a total blockade over the country. Speaking to reporters in Moscow, Deputy Foreign Minister Sergey Ryabkov called on Washington to assist Venezuelans in bridging existing chasms instead of hindering talks between the government and opposition. He said he would discuss the situation in Venezuela with Delcy Rodriguez, the country's vice president, who arrived in Russia on Monday for a working visit. "We will examine the situation, referring to the strengthening by Washington of illegal, illegitimate sanction measures, attempts to set up a blockade [on Venezuela]. We warn Washington against incautious steps in this area," Ryabkov said. (AA: https://www.aa.com.tr/en/world/russia-warns-us-against-imposing-blockade-on-venezuela/1560476)

 

Venezuelan exodus may soon double, triggering a bigger regional crisis

One of the things that surprised me the most during a lengthy interview with Juan Guaidó, the Venezuelan National Assembly president who is recognized by the United States and more than 50 countries as Venezuela’s legitimate leader, was his forecast that the number of Venezuelan exiles may “easily” reach 8 million by next year. It’s a mind-boggling figure because it would be twice the 4 million exiles that, according to a recent United Nations report, have already fled the country since dictator Nicolas Maduro took office five years ago. Eight million people would amount to about 25% of Venezuela’s population. Twice the current number of Venezuelan exiles would cause a much bigger economic, and perhaps political, earthquake for many Latin American countries. Asked about the Trump administration’s new economic sanctions on Venezuela, which ban U.S. transactions with state-owned Venezuelan businesses, Guaidó told me in the Aug. 12 interview that, “They seek to prevent the regime’s use of those resources to finance irregular (paramilitary) groups or to steal the Venezuelan people’s money.” Dismissing Maduro’s claims that Venezuela’s humanitarian crisis has been caused by U.S. sanctions, Guaidó said that, “The sanctions went into effect three days ago, whereas the 65% contraction of the economy has been taking place over the past six years. The Maduro regime bears total responsibility for the crisis.” Asked about the Cuban presence in Venezuela, Guaidó told me that there are “between 2,000 and 3,000 Cubans who are carrying out intelligence, counterintelligence, repression and even torture” for Maduro’s armed forces. I asked Guaidó whether he’s fearful that international pressure to restore democracy in Venezuela may weaken soon. Guaidó responded that governments come and go, noting that El Salvador’s new government, for instance, has switched sides to support him. He added that Maduro, too, is becoming weaker, as nearly 90% of Venezuelans want him to leave power, according to a recent MEGANALISIS poll. “Time is running against (all) Venezuelans, including Maduro, who is collapsing,” Guaidó told me. “What’s important is to take advantage of the window of opportunity we have to prevent an even bigger humanitarian catastrophe” and to “step up international diplomatic pressures to end the suffering of the Venezuelan people.” (The Oppenheimer Report: https://tribunecontentagency.com/article/venezuelan-exodus-may-soon-double-triggering-a-bigger-regional-crisis/

 

U.N. pleads for more help to relieve Venezuelan refugee crisis

United Nations High Commissioner for Refugees Filippo Grandi appealed on Sunday for more humanitarian aid for Venezuelan refugees pouring into neighboring countries where they are overwhelming social services and sparking local tensions. Grandi had planned to visit the Brazilian border town of Pacaraima this weekend, but authorities advised him to cancel due to protests by residents unhappy with the arrival of more than 500 Venezuelans a day. The UNHCR estimates 4.3 million Venezuelans have fled economic and political turmoil in their country, mainly to Colombia where there are 1.2 million and to Peru, Chile and Ecuador. Some 180,000 have stayed in Brazil. The U.N. and NGOs put out a humanitarian appeal for US$ 770 million at the start of the year and has received less than US$ 180 million, Grandi said in a telephone interview after visiting Chile and Brazil. “This is really one of the most under-funded humanitarian appeals in the world for one of the biggest crises,” he said. Financial institutions such as the World Bank and the Inter-American Development Bank are engaged but need to speed up their help, he said, to help sustain health and education systems. Grandi said there were signs of anti-immigrant sentiment spreading across the region, reflected in mounting restrictions on the movement of Venezuelans in Andean countries. But he praised Chile, which has received 400,000 Venezuelans, for granting safe passage and a guarantee of asylum. (Reuters: https://www.reuters.com/article/us-venezuela-brazil-refugees/u-n-pleads-for-more-help-to-relieve-venezuelan-refugee-crisis-idUSKCN1V80M8)

 

Colombia’s armed groups prey on Venezuela migrants

A new report by Human Rights Watch (HRW) on violence in the department of Norte de Santander, Colombia, shows how vulnerable Venezuelan migrants are to the criminal groups that dominate the region. The report, entitled “The War in Catatumbo” and published August 8, documents abuses by armed groups against Venezuelan and Colombian civilians in Norte de Santander’s Catatumbo region in northeast Colombia along the border with Venezuela. It explains that groups like the National Liberation Army (Ejército de Liberación Nacional – ELN), the Popular Liberation Army (Ejército Popular de Liberación – EPL), and the dissidents of the Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia – FARC), are responsible for an uptick in killings and other crimes. The affected Venezuelan citizens live in Catatumbo’s urban areas, including the municipalities of Tibú, Ocaña, El Tarra, Ábrego, Convención and Sardinata. In these areas, the migrants — including many minors and women — live in precarious conditions which leave them at the mercy of criminals, according to HRW. “We have documented on the ground that armed groups in Catatumbo commit all types of abuses: murders, disappearances, kidnappings, recruitment of minors, sexual violations, threats and displacements,” HRW Director José Miguel Vivanco told Semana. There are currently close to 25,000 Venezuelans in Catatumbo who, despite being aware of the security risks in the region, have crossed the border in search of work, food and medicine, according to Vivanco. The Venezuelans have arrived as tens of thousands of Catatumbo’s residents have been displaced by the conflict among the various armed groups. Desperate, the migrants find themselves caught in areas where these groups are vying for territory and control of criminal economies. Officials with the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) on the border city of Cúcuta told InSight Crime that fear of being deported or arrested keeps Venezuelan nationals from seeking help from local authorities. (InSight Crime: https://www.insightcrime.org/news/brief/armed-groups-colombia-receive-venezuela-migrants/)

 

Fears grow of Venezuela malnutrition time bomb

The graffiti scrawled across a wall in Caracas is short but heartfelt. “Tengo hambre,” it reads. “I am hungry”. It is a cry increasingly heard across Venezuela. As Nicolás Maduro and western-backed opposition leader Juan Guaidó battle for the country’s future amid an economic collapse that has sparked severe shortages of food, fuel and medicine, millions of people are going hungry for extended periods and risking long-term damage to their health, humanitarian organizations have warned. “Six to eight million people are living in a state of undernourishment,” said Susana Raffalli, a veteran Venezuelan humanitarian adviser who has worked across the world with the Red Cross and UNICEF, the UN agency for children. Speaking before the latest US sanctions, she said: “That means the state cannot guarantee they have an adequate supply of food.” Ms. Raffalli’ s assessment is supported by the UN’s Food and Agriculture Organization. José Graziano da Silva, outgoing head of the FAO, said in a press interview last month that there had been a “dizzying increase” in hunger in Venezuela in recent years. In a recent report on global food security, the FAO estimates that between 2016 and 2018, about 21.2% of the Venezuelan population was undernourished. When Maduro came to power in 2013 the figure was 6.4%, it says. In a June report, UNICEFs estimated that 3.2m children in Venezuela were “in need of assistance”. Millions of poorer Venezuelans rely on monthly deliveries of government-subsidized food boxes for survival, a system critics denounce as a form of social control, alleging supplies are skewed towards supporters of the government. Delivery has become increasingly erratic, and the contents of the boxes are of variable quality, say aid workers. Washington has meanwhile accused the Maduro government of skimming off hundreds of millions of dollars from the food program, and last month-imposed sanctions on Maduro’s three stepsons over their alleged roles. One businessman with knowledge of the food situation in Venezuela, who spoke to the Financial Times on condition of anonymity for fear of government reprisals, said data show a large proportion of Venezuelans are living on between 1,500 and 1,900 calories a day. Malnutrition is particularly acute in the provinces, say aid workers. North-western Zulia state, on the border with Colombia, is one of the worst-hit areas. In a survey late last year, the Commission for Human Rights in Zulia State (CODHEZ), a local NGO, found that three-quarters of households in the state capital Maracaibo were suffering from hunger. Eight in 10 people said they could no longer afford protein such as chicken and beef and survived largely on arepas — traditional corn flour patties — margarine, pasta and rice. Since then, the situation has worsened as wages have failed to keep pace with galloping inflation. “The price of food went up 8,165% between last October and this June,” said Juan Berríos, a researcher at CODHEZ. Nine months ago, the monthly minimum wage bought 24kg of corn flour but now it buys less than 4kg. Venezuela will face long-term consequences from chronic undernourishment, especially of children, humanitarian organizations warn. NGO data seen by the FT show the weight and height of Venezuelan children have fallen significantly below the average for comparable populations. (Financial Times: https://www.ft.com/content/b6459434-b531-11e9-8cb2-799a3a8cf37b)

 

EDITORIAL: US sanctions are worsening Venezuela’s agony

“One of the worst man-made humanitarian disasters in the modern world.” US secretary of state Mike Pompeo’s assessment of Venezuela is sweeping, but fair. A nation which has the world’s biggest oil reserves but has descended into such economic chaos that up to a quarter of its population has fled should qualify by any standards. Those left behind face severe shortages of food, medicine and fuel. Malnutrition is stunting a generation of Venezuelan children. Top officials stand accused of corruption, drug trafficking and gold smuggling. Sadly, the cure adopted by the Trump administration is only making the patient sicker. Evidently the blame for the suffering of the Venezuelan people lies principally at the door of Chávez and his chosen successor, Nicolás Maduro, under whose rule the country has plumbed new depths. The Trump administration believes that by choking Venezuela’s economy harder Maduro can be ejected. The remedy is not working; other countries under drastic sanctions, such as Cuba, have similarly strangled economies, but long-lived leaders. The key to ending the agony lies in a much broader diplomatic effort. EU and Latin American nations have brokered talks between the government and opposition, but these have failed because Maduro’s key backers — Cuba, Russia and China — are missing. If Moscow, Beijing and Havana have nothing to gain from Maduro leaving power, they will continue to back him. Broad international talks to negotiate Maduro’s exit to a third country, installation of a respected interim president, equal treatment of all creditors and fresh elections are the way forward. This will not be popular with some in Washington. But the Venezuelan people’s suffering is rapidly worsening. Russian president Vladimir Putin suggested to this newspaper in July that Moscow’s interests in Venezuela were purely commercial and vowed that if Guaidó won an election, the Kremlin would work with him. That pledge should be put to the test. (Financial Times: https://www.ft.com/content/f7dd72a4-c044-11e9-b350-db00d509634e)

 

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.

August 08, 2019

International Trade

Panama Canal authorities refute Maduro regime claim over food ship detention

Panama Canal administrator Jorge Luis Quijano has denied claims by Nicolás Maduro’s Vice President, Delcy Rodríguez, who denounced the detaining of a ship headed to Venezuela with primary materials including 20,000 tons of soy cakes for food production. Quijano said no vessel was detained and operations were being conducted normally. More in Spanish: (Noticiero Venevisión, http://www.noticierovenevision.net/noticias/internacional/canal-de-panama-nego-retencion-de-barco-que-se-dirigia-a-venezuela-con-alimentos)

 

Logistics & Transport

TRANSCARGA’s A300B4 freighter idled with stoppage of US-Venezuela ops

On 1 August, the US Department of Transportation denied Venezuelan carrier TRANSCARGA’s request for an exemption to engage in charter cargo transportation between the United States and Venezuela. The DOT cited the Department of Homeland Security’s concerns over security in Venezuela as the reason for the denial. TRANSCARGA requested an exemption from the DOT to engage in charter cargo operations on 5 June, stating in that filing it planned to use its leased A300B4 freighters to operate between Venezuela and the US via intermediate points. For now, TRANSCARGA continues to operate one of two leased A300B4 freighters in its fleet. The aircraft (261) operates in regional service on routes between its main hub in Caracas (CCS) and other destinations in Colombia and Venezuela such as Bogota, Puerto Cabello and Valencia. TRANSCARGA’s second freighter (274), meanwhile, has been idled since mid-May, when flights between Venezuela and the U.S. ceased. Although TRANSCARGA proposed additional screening via intermediate points between the US and Venezuela, DOT said the concerns expressed by DHS “make clear that the conditions in Venezuela that led to the service suspension go well beyond that sole issue.” In its denial, DOT confirmed that it would not allow petitions for reconsideration of its decision. (Cargo Facts: https://cargofacts.com/transcargas-a300b4-freighter-idled-with-stoppage-of-us-venezuela-ops/)

 

Oil & Energy

What impact will new US sanctions have on Venezuela's August crude exports?

New US sanctions against Venezuela will likely impact the country's planned crude exports in August, but by how much depends on the US government's willingness to sanction Russian and Chinese companies. PDVSA plans to export 680,000 b/d of crude in August, of which just 43,000 b/d is going to a company with a waiver from the US government, Sweden's NYNAS, according to a PDVSA document seen by S&P Global Platts. That leaves 637,000 b/d of crude exports that could be impacted if buyers are deterred by the US sanctions. "If US sanctions were extended, they could impact 95% of the crude exports planned for August," said the PDVSA official who spoke on condition of anonymity. "PDVSA will have to grant great discounts and even sell at a loss to export." Roughly 293,000 b/d of crude is scheduled to be exported to China in August, which will go to repaying debts, the PDVSA document showed. The PDVSA source said the company was hoping to export at least 3.9 million barrels in August, or roughly 125,800 b/d, to ROSNEFT, also to repay debts. Crude exported to pay off debts so far seems to have fallen outside of the scope of US sanctions. ROSNEFT said in May it had come to an agreement with US authorities for delivery of Venezuelan crude to Rosneft's Indian refinery, as the supplies were carried out under prepayment contracts. The US has yet to officially acknowledge any such agreements, and it is thought that Monday's executive order signed by President Donald Trump was intended to address that loophole. In the event of secondary sanctions, Maduro's allies can find ways to evade consequences, using certain banks with limited exposure to the dollar payments system or already under sanctions. (S&P Global Platt’s: https://www.spglobal.com/platts/en/market-insights/latest-news/oil/080719-what-impact-will-new-us-sanctions-have-on-venezuelas-august-crude-exports)

 

China comes to the rescue of Venezuela’s run-down oil refineries

A Chinese contractor - Shanghai-based WISON Engineering - has agreed to shore up Venezuela’s derelict refining network to ease fuel shortages, potentially complicating the Trump administration’s push for regime change in the oil-rich country. The Maduro regime plans to pay for services with diesel fuel in barter deal for urgent repairs. (BLOOMBERG: https://www.bloomberg.com/news/articles/2019-08-07/china-comes-to-the-rescue-of-venezuela-s-run-down-oil-refineries)

 

CHEVRON says future Venezuela events may have significant impact

The last major U.S. oil producer in Venezuela is warning that developments in this nation could hurt its earnings. “Future events related to the company’s activities in Venezuela may result in significant impacts on the company’s results of operation in future periods,” CHEVRON Corp. said Wednesday in its latest 10-Q filing with the U.S. Securities and Exchange Commission. The language has evolved from the company’s previous quarterly filing, when it said developments in the country could lead to “increased business disruption and volatility in the associated financial results.” CHEVRON puts the carrying value of its investments in the country at about US$ 2.7 billion. It recognized US$ 21 million in losses from its share of net income from Venezuelan equity affiliates in the first half of the year. (Bloomberg, https://www.bloomberg.com/news/articles/2019-08-07/chevron-says-future-venezuela-events-may-have-significant-impact)

 

Russia’s ROSNEFT last major petrol supplier to Venezuela

Russia’s state-owned oil company ROSNEFT has become the last major supplier of petrol to Venezuela, propping up Nicolás Maduro’s regime as the US intensifies economic pressure on Caracas. The lifeline has given Moscow unprecedented leverage over the crisis-hit nation, frustrating efforts by Washington and the EU to push the socialist president out and make way for opposition leader Juan Guaidó. Data seen by the Financial Times show that ROSNEFT supplied Venezuela’s entire imports of petrol in June, as other suppliers fell away. Eight cargos of petrol totaling 1.7m barrels arranged by ROSNEFT Trading, the company’s Geneva-based trading arm, were loaded in ship-to-ship transfers carried out offshore near Malta, Gibraltar and Aruba, the documents show. The tankers then headed for Venezuelan ports, where the petrol was delivered to PDVSA, Venezuela’s state oil company. Publicly available satellite shipping signals, collated by oil analytics company VORTEXA, confirmed that the deliveries had taken place. It is unclear whether the companies supplying ROSNEFT with the cargoes, some of which originated in ports in the Netherlands as well as Greece and Turkey before being transferred at sea, were aware they were destined for Venezuela. “Venezuela’s gasoline supplies depend on Russia,” said a person familiar with the supply deal. “The day Russia stops supplying gasoline, Venezuela grinds to a halt.” Another person with knowledge of the shipments said they were “a purely commercial operation” based on “previously agreed contracts”. The supply arrangement makes ROSNEFT, and the Kremlin, one of the single biggest hurdles to US plans to spur regime change in Caracas. Venezuela used to refine its own petrol but years of neglect and under-investment, as well as plunging domestic crude production, have made the country dependent on imports. There are now supply shortages and long queues at fuel stations in most parts of the country. The 1.7m barrels supplied by Rosneft Trading in June correspond to a supply of about 56,000 barrels per day, or about a quarter of Venezuela’s petrol consumption two years ago. A senior US government official told the Financial Times that ROSNEFT’s continued trading with PDVSA had seen the Russian company discussed as a potential target for sanctions “on multiple occasions”, but the Trump administration had refrained from hitting the company so far for fear of broader ramifications. The Moscow-headquartered company produces almost 5m barrels a day of crude and other liquids or approximately 5% of global supply, so any disruption to its output could lead to a sharp rise in the oil price. (Financial Times: https://www.ft.com/content/d0645804-b7a3-11e9-96bd-8e884d3ea203)

 

Commodities

Amid rising hunger, Venezuela plantain crops threatened by fungus

Venezuela's banana and plantain crops face potential infestation of a fungus already effecting neighboring Colombia, an agronomist association said on Wednesday, potentially devastating one of Venezuela's main foods amid rising hunger. A hyperinflationary economic collapse has left millions unable to obtain enough calories and has pushed diets toward starchy staples that grow readily in its tropical climate. Venezuela's banana and plantain crops are concentrated in the state of Zulia on the border with Colombia, where 150 hectares (371 acres) of bananas were quarantined in July on suspicion they were infested by the Fusarium R4T fungus. The fungus causes a malady popularly known as Panama disease and can remain in the soil for up to 30 years by attacking the roots of plants. "The devastation of the crops would be very fast" if the fungus reached Venezuela, Saul Lopez, president of Venezuela's Association of Agricultural Engineers, said at a news conference. Venezuela has a combined total of around 70,000 hectares (173,000 acres) of bananas and plantains under plantation, Lopez said, adding that the economic crisis has left the country without personnel to address the problem. The flow of people and food between Venezuela and Colombia creates a significant possibility that the fungus could reach Venezuela, said Edison Arciniega of food-security focused non-profit Citizenship in Action. (Reuters: http://news.trust.org//item/20190807183401-dwhs2/)

 

Economy & Finance

Opposition says new Venezuela sanctions protect CITGO, encourage debt talks -opposition

Venezuela’s opposition on Tuesday celebrated a sweeping U.S. sanctions order against the regime of Nicolas Maduro, saying the measure would protect Venezuela-owned U.S.-based refiner CITGO from seizure by creditors. Three allies of interim president Juan Guaidó also said the measure allowed for restructuring negotiations with bondholders, which had been prohibited under previous sanctions. That could be key to protecting CITGO, since half of state oil company PDVSA’s shares in the refiner were put up as collateral for its 2020 bond. The move comes after Guaidó asked the United States to issue an executive order protecting CITGO, which bondholders and other parties are eyeing for possible seizure to receive compensation from Venezuela for unpaid debts. “Today there is no possibility of losing CITGO,” Guaidó, the leader of the opposition-controlled Congress, who in January invoked Venezuela’s constitution to assume an interim presidency, told reporters on Tuesday. (Reuters, https://www.reuters.com/article/venezuela-politics-usa-citgo/update-3-new-venezuela-sanctions-protect-citgo-encourage-debt-talks-opposition-idUSL2N25213Y; https://www.reuters.com/article/venezuela-politics-usa-citgo/new-u-s-sanctions-on-venezuela-protect-citgo-from-seizure-Guaidó-idUSL2N2520PJ)

 

Politics and International Affairs

Maduro halts talks with opposition after US sanctions

Nicolas Maduro has ordered his regime's representatives not to travel to Barbados for scheduled talks with the political opposition starting on Thursday, blaming the US sanctions for the impasse. Maduro "has decided to not send the Venezuelan delegation" for talks on Thursday and Friday with representatives of interim president Juan Guaidó "due to the grave and brutal aggression" being "continuously ... carried out by the Trump administration against Venezuela," a government statement said late on Wednesday. "Venezuelans have noted how the leader of the opposition delegation, Juan Guaidó, has celebrated and promoted these actions that are harmful to national sovereignty," the information ministry said in a statement. Maduro's Vice President Delcy Rodriguez had called the latest US sanctions a "global threat" and an attack on private property. Guaidó said on Wednesday that Maduro could help the country by abandoning the presidential palace, Miraflores, "that way the sanctions will be lifted tomorrow". Guaidó said the sanctions are "penalties for those who steal and profit from misery". (Al Jazeera: https://www.aljazeera.com/news/2019/08/venezuela-maduro-halts-talks-opposition-sanctions-190808010151876.html; The Wall Street Journal: https://www.wsj.com/articles/venezuela-withdraws-from-planned-talks-with-opposition-11565228327

 

Bolton warns foreigners that violate Venezuela asset freeze

U.S. National Security Adviser John Bolton pressed his case Tuesday for sweeping action against Nicolás Maduro, warning foreign governments and companies that they could face retaliation in the U.S. if they continue to do business with his socialist administration. Bolton’s comments came after the White House froze all Venezuelan government assets in the U.S. late Monday, putting the country on a short list of U.S. adversaries, including Cuba, North Korea and Iran that have been targeted by such aggressive financial measures. “The Maduro regime now joins that exclusive club of rogue states,” Bolton said at a one-day conference in Peru of more than 50 governments aligned against Maduro. The broad ban is the first of its kind in the Western Hemisphere since an asset freeze against Gen. Manuel Noriega’s government in Panama and a trade embargo on the Sandinista leadership in Nicaragua in the 1980s. “We are sending a signal to third parties that want to do business with the Maduro regime: Proceed with extreme caution,” Bolton said. “There is no need to risk your business interests with the United States for the purposes of profiting from a corrupt and dying regime.” While the order falls short of an outright trade embargo it exposes foreign entities doing business with the Maduro government to so-called secondary sanctions in the U.S. — a fact not lost on Maduro’s government as it tries to rally support at home and abroad. A senior Trump administration official said the timing of the sanctions reflects the U.S. assessment that those talks, which started in May and are being sponsored by Norway, are going nowhere and being used by the Maduro government to buy time. But even some U.S. allies could be affected by the move, which Bolton acknowledged has been used only sparingly in the past half-century. Several European countries, from Spanish oil company REPSOL to AIR FRANCE, continue to operate in Venezuela and could see their U.S. assets seized unless they cut ties with the government. India and China are major buyers of crude from state-run oil giant PDVSA. All these companies rely on the U.S. to process financial payments. “The truth is that no financial institution wants to run afoul of the Treasury Department,” said Geoff Ramsey, a researcher at the Washington Office on Latin America. (AP: https://www.apnews.com/7314263d68924c2990e52f1ff1ea99d8; Reuters, https://www.reuters.com/article/us-venezuela-politics-usa/u-s-ready-to-target-other-countries-for-supporting-venezuelas-maduro-idUSKCN1UW1MP; https://www.reuters.com/article/us-venezuela-politics-usa-bolton/new-u-s-action-forces-choice-between-doing-business-with-caracas-or-washington-bolton-idUSKCN1UW1Q1)

 

Countries supporting Guaidó pledge to maintain pressure on Venezuela ad US hardline dominates talks

An international conference on Venezuela on Tuesday agreed to maintain diplomatic pressure on President Nicolas Maduro’s government, while many participants stressed the urgent need for fresh elections in the country. “We shall maintain the international pressure,” news reports quoted Peruvian Foreign Minister Nestor Popolizio as saying at the end of the conference in the capital, Lima. The meeting brought together representatives of more than 50 countries. Maduro allies China, Russia, Cuba and Turkey did not attend. Neither did Mexico and Uruguay, which have tried to remain neutral in the power struggle between Maduro and opposition leader Juan Guaidó. The International Contact Group on Venezuela (ICG), which includes European and Latin American countries, warned that “the rapidly deteriorating crisis is seriously impacting the region, particularly because of massive migration flows to neighboring countries.” It called for “a negotiated transition that gives the voice back to the Venezuelan people, through free and credible presidential elections.” Popolizio urged the international community to increase humanitarian aid to Venezuelans and support to countries receiving Venezuelan migrants. “It is time to take decisions,” he said, calling for “an adequate international atmosphere to favor a peaceful solution,” including elections. The hardline stance of the Donald Trump administration on Venezuela, as presented at a Lima conference on Tuesday by US National Security Adviser John Bolton, dominated the international gathering called to discuss bringing democracy back to this country. The International Conference for Democracy in Venezuela, originally convened to hear from countries with different views on the crisis in Venezuela, was transformed by Bolton into a platform where he reaffirmed the unilateral US position and explained the measures taken by Washington to remove embattled incumbent Nicolas Maduro and install Juan Guaidó in his place. (Havana Times: https://havanatimes.org/features/countries-supporting-Guaidó-pledge-to-maintain-pressure-on-venezuela/; Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2481911&CategoryId=10717)

 

U.S. and Colombian military are working on plans to aid Venezuela after Maduro

The U.S. is working with Colombia, Brazil and other regional partners on how to assist Venezuela if the embargo-like sanctions announced by the White House this week ultimately force President Nicolás Maduro to step down, the head of the U.S. Southern Command said. Navy Adm. Craig Faller, the Miami-based head of U.S. forces in South America, said the nations are working on “planning and discussing what we could do, and will do for the ‘day after Maduro,’ when there’s a legitimate government, when we can go in and really assist the people of Venezuela.” Faller said that, to him, the “‘day after Maduro’ meant a point in time where a legitimate government, not a Maduro government, has asked the United States and others to come into Venezuela to help.” At present, “our partners are conducting their independent planning,” Faller said. “At some point, it will be very useful to work together, share plans,” he said, noting that any coordinated plan would have to be approved by each country. “And so, there’s a willingness from key partners in the region to do that.” From a U.S. military side, “our focus would be … alleviating human suffering,” Faller said. “The United States is very good at heavy lift - we are very good at supporting delivery.” Colombia’s head of military forces, Gen. Luis Navarro said: “It turns into a security issue for Colombia,” Navarro said. “We are facing a ... humanitarian crisis in the region. For Colombia it’s a large problem. We are talking about more than a million displaced citizens from Venezuela because of the difficult conditions. We have done all we can to host them in the best conditions, but available resources now are not enough.” When asked if Colombia needs more resources from the U.S., Navarro said more support was needed from the international community. “But the biggest help is to fix the current problem in Venezuela,” he added. The drug trade is one of many illicit lines of funding that Faller said Maduro is relying upon as other sources of revenue are frozen by the sanctions, and Colombia’s forces have increased their eradication efforts in recent months, which Faller said would help add economic pressure as mainstream trade is cut off. On Tuesday, the Maduro government called the U.S. sanctions “economic terrorism,” which Faller called “a pack of lies.” “What does anyone think about anything Maduro says? It’s generally a pack of lies,” Faller said. “The additional measures announced by the U.S. are part of that continued pressure that is designed exactly to influence Maduro and those who make up his mafia.” Asked if the military was prepared to provide additional assistance if the sanctions lead to more Venezuelan refugees joining the already estimated 1.3 million in Colombia, Faller said for now SOUTHCOM’s role would be to “continue to share intel and look for indicators for the range of security threats that emanate from Venezuela.” (McClatchy: https://www.mcclatchydc.com/news/nation-world/national/national-security/article233291967.html)

 

U.S. embargo on Venezuela raises stakes for Russia and China

Behind the administration's recent move is the untested wager that the renewed threat of extraterritorial sanctions against Venezuela's trade partners China and Russia could erode their support for Nicolás Maduro. While it may be rational for China and Russia to back down and realize the economic benefits of the transition in Venezuela sought by the U.S., national pride is also at stake. If Washington cannot convince China and Russia through arguments around economic self-interest, gaining traction with them becomes much harder. Maduro, always spoiling for a fight with the White House, will likely use the embargo to further scapegoat the U.S. for Venezuela's economic collapse. Trump could face a choice to escalate his embargo to a full blockade if the new economic pressure does not tilt support toward Guaidó. Reluctant to enter the fray, China and Russia may still be drawn in should the U.S. turn to military might to enforce its embargo — and it is unclear what lengths they would go to in defense of Maduro. (AXIOS: https://www.axios.com/us-embargo-venezuela-raises-stakes-russia-china-9e4c8fad-e30e-4512-8e27-21071cb087c0.html)

 

China slams US for 'bullying' other countries over Venezuela

China on Wednesday hit back at remarks from a top US official who warned Beijing and Moscow against supporting the Venezuelan regime of Nicolas Maduro and called on Washington to stop "bullying" other countries. On Tuesday, US National Security Advisor John Bolton urged China and Russia to avoid doing business with the Maduro regime, after President Donald Trump ordered a freeze on all Venezuelan government assets in the US and barred transactions with its authorities. Bolton's comments are "a wanton interference in Venezuela's internal affairs," said Chinese foreign ministry spokeswoman Hua Chunying in an online statement. "China urges the US to... let the Venezuelan people decide their own future and immediately stop the bullying actions of suppressing other countries at every turn," she said. On Tuesday, delegates from about 60 countries discussed ways of ending the crisis in Venezuela in a meeting called by the Lima Group, which includes a dozen Latin American countries and Canada, most of which support Guaidó. During the meeting, Bolton singled out Maduro allies China and Russia, telling them their "support to the Maduro regime is intolerable". He also urged Russia not to "double down on a bad bet," and told China that "the quickest route to getting repaid" for its loans to Venezuela was by supporting "a new legitimate government." (AFP: https://news.yahoo.com/china-slams-us-bullying-venezuela-164347903.html)

 

Maduro regime calls latest US sanctions “economic terrorism”

Washington’s imposition of a freeze on Venezuelan regime assets and a ban on transactions with Nicolas Maduro’s administration is “economic terrorism,” Caracas’ representative to the United Nations said on Tuesday. With this move, the United States has dropped the pretense of caring about democratic norms in favor of an open attempt to “sabotage” the dialogue between Maduro and the opposition, Samuel Moncada told a press conference at UN headquarters. The ambassador cited remarks earlier Tuesday in US National Security Adviser John Bolton, who told attendees at what was billed as the International Conference for Democracy in Venezuela: “The time for dialogue is over. Now is the time for action.” “Mr. Bolton is not Venezuelan. The dialogue is among Venezuelans. Who is Mr. Bolton to stick his nose in?” Moncada asked rhetorically. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2481913&CategoryId=10717; Reuters, https://www.reuters.com/article/us-venezuela-politics-sanctions/venezuela-says-new-trump-executive-order-formalizes-blockade-idUSKCN1UW1KU)

 

…and Russia claims US “economic terrorism”, citing “popular support” for Maduro…

Responding to the latest U.S. actions, Russian Foreign Ministry spokesperson Maria Kazkharova said Tuesday that "Washington continues to wage economic terrorism against Caracas in its customary 'cowboy' manner," arguing that "these steps have no legal justification from the standpoint of international law and domestic Venezuelan law." "Clearly, U.S. strategists have miscalculated the level of popular support for the legitimate President and his readiness to defend the genuine independence of his country," Zakharova said Tuesday. She went on to cite economists Jeffrey Sachs and Mark Weisbrot whose April report for the Center for Economic and Policy Research found "an estimated more than 40,000 deaths from 2017 to 2018" in Venezuela due to U.S. sanctions. (Reuters, https://www.reuters.com/article/us-venezuela-politics-usa-order-russia/russia-says-u-s-asset-freeze-on-venezuela-is-illegal-ria-idUSKCN1UW1U0; NEWSWEEK: https://www.newsweek.com/china-russia-say-us-failed-venezuela-1453165)

 

US warned that Venezuela sanctions could worsen crisis

Donald Trump’s decision to broaden sanctions against Venezuela is likely to exacerbate the country’s humanitarian crisis and give Nicolás Maduro a new reason to blame Washington for his failures, Latin American civil society groups have warned. While the White House says the measures are necessary to bring Maduro to heel and force him to quit, the civil society groups, which included some from Brazil, Colombia and Peru as well as Venezuela, expressed their “deep concern” over the impact on ordinary Venezuelans. (Financial Times: https://www.ft.com/content/3755c832-b938-11e9-8a88-aa6628ac896c)

 

Canada looking closely at U.S. freeze of Venezuelan government assets

Foreign Minister Chrystia Freeland on Tuesday said Canada was examining the United States’ move to freeze all Venezuelan government assets but stopped short of saying whether Canada would take the same path. “We are looking at them closely,” Freeland said when asked about the new U.S. actions during a joint press conference with Britain’s new Foreign Secretary Dominic Raab in Toronto. Canada has imposed sanctions on more than 100 members of President Nicolas Maduro’s government, and is part of the Lima Group - a bloc of mostly Latin American countries - that recognizes Venezuelan opposition chief Juan Guaidó as the legitimate leader and is demanding that Maduro resign. (Reuters, https://www.reuters.com/article/us-canada-venezuela/canada-looking-closely-at-u-s-freeze-of-venezuelan-government-assets-idUSKCN1UW1PK)

 

Switzerland updates list of sanctioned Maduro regime officials

Switzerland has just updated a list of 18 Maduro regime officials sanctioned for violating human rights and are barred from entering that country or carrying out financial operations there. The list includes Diosdado Cabello, Tareck el Aissami, Freddy Bernal, Maikel Moreno, Tarek William Saab, Delcy Rodríguez, Elías Jaua, Jesús Suárez Chourio, Iván Hernández Dala, Antonio José Benavides Torres and Néstor Reverol. Also, Gustavo Enrique González López, Tibisay Lucena, Socorro Hernández, Katherine Harrington, Sergio José Rivero Marcano, Sandra Oblitas and Xavier Moreno Reyes. More in Spanish:  (El Nacional; http://www.el-nacional.com/noticias/mundo/gobierno-suiza-actualizo-lista-oficialistas-sancionados_291381; Noticiero Venevisión, http://www.noticierovenevision.net/noticias/internacional/suiza-anuncio-nuevas-sanciones-contra-11-altos-funcionarios-del-gobierno-venezolano)

 

WSJ Editorial: Squeezing Venezuela’s comrades

The people of Venezuela continue to suffer under socialist dictator Nicolás Maduro, who is sustained by his patrons in Cuba, Russia and China. So, it’s welcome news this week that the Trump Administration has toughened sanctions against the regime and its abettors. The Trump Administration has morality and regional politics on its side. As Mr. Bolton said on Tuesday from Lima, Peru, the free people of the hemisphere can’t ignore the humanitarian crisis created and maintained by Caracas.  Most of the more than four million Venezuelan refugees who have fled the once oil-rich nation have landed in neighboring countries that lack the resources to easily absorb them. Without regime change in Caracas, the refugee wave could double this year. Mr. Bolton also stressed U.S. support for democratically elected Venezuelan interim President Juan Guaidó. “We seek the peaceful transfer of power, but as President Trump has said from the beginning: All options are on the table,” Mr. Bolton said. A waiver for operating in Venezuela until October—granted to CHEVRON, HALLIBURTON and other U.S. companies at the end of July—may not be renewed. That “will give us an opportunity to land another blow in 80 days,” a senior administration official told us on Tuesday.  Cuba is desperate to maintain control of Venezuela because it needs Mr. Maduro’s oil to keep its economy afloat. But U.S. measures to deny ships access to U.S. ports if they carry oil from Venezuela to Cuba have reduced the number of available cargo vessels ready to do the job. Shipments to Cuba have been cut by more than half, which means Cuba isn’t getting the same return on its investment in secret police and regime enforcers it has sent to Venezuela. Cuba will try to persuade Mr. Maduro that he can wait out the Trump Presidency, despite shrinking oil revenues, hyperinflation and rising discontent in the army. But at some point, Mr. Maduro will have to choose between saving himself or risking his life for the Cuban elite that he finances. (The Wall Street Journal: https://www.wsj.com/articles/squeezing-venezuelas-comrades-11565216039)

 

Venezuela's female refugees trafficked at higher rate amid political crisis

As the political system of Venezuela continues to collapse, the country’s women and girls seeking asylum are being trafficked at increased rates, according to a new report obtained by Fox News. Refugees International’s  report, “Seeking Safety: Confronting Sexual Exploitation and Trafficking of Venezuelan Women and Girls,” claims that many of these victims are placed right in the crosshairs of traffickers because there are not enough “legal pathways” for them to seek asylum in neighboring countries like Colombia and Ecuador. They are then forced into fleeing their country through illegal means within the black market, making them susceptible to traffickers looking to place them into forced sex work or labor. (Fox News, https://www.foxnews.com/world/venezuela-female-refugees-human-trafficking)

 

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.