October 08, 2019

International Trade

Passport maker De La Rue flies in turnaround specialist

De La Rue has appointed turnaround specialist Clive Vacher as chief executive as the banknote and passport maker contends with a series of setbacks. Vacher takes over immediately from Martin Sutherland, whose departure was announced after a May profit warning, but faces significant challenges alongside new chairman Kevin Loosemore. De La Rue’s share price has more than halved since the profit warning, with the company also taking a one-off hit for non-payment from Venezuela and an investigation led by Britain’s Serious Fraud Office. Vacher was previously CEO at semiconductor business Dynex Power and has held senior positions with industrials Pratt & Whitney, Rolls-Royce and General Dynamics. De La Rue is emphasizing Vacher’s credentials in business transformation and operational turnarounds, which may prick up the ears of all shareholders, said Russ Mould of investment broker AJ Bell, referring to activist investor Crystal Amber Fund. (Reuters, https://www.reuters.com/article/us-de-la-rue-ceo/passport-maker-de-la-rue-flies-in-turnaround-specialist-idUSKBN1WM0EG)

 

Oil & Energy

EXXON MOBIL bars use of oil tankers linked to Venezuela: sources

EXXON MOBIL Corp this week banned the use of vessels linked to oil flows from Venezuela in the last year, putting new pressure on the U.S. sanctioned country and on global crude freight rates. The decision by world’s largest publicly traded oil producer to ban the Venezuela-linked tankers should affect about 250 vessels. (Reuters, https://www.reuters.com/article/us-exxon-mobil-shipping-venezuela/exxon-mobil-bars-use-of-oil-tankers-linked-to-venezuela-sources-idUSKBN1WJ20E)

 

PDVSA flooding Cuba with stranded oil

At least three Venezuelan fuel tankers are heading towards Cuba, part of a flotilla meant to free up domestic storage space while defying a US campaign to cut off Venezuela's oil supply to its political ally. Up to 3mn bl of refined products and heavy crude that Venezuelan state-owned PDVSA is dispatching to Cuba in the first half of October should help partially alleviate a critical storage deficit that has forced down Venezuelan production toward 500,000 b/d. The storage shortage is a domino effect of US sanctions that are scaring away most buyers, with a few exceptions such as Russia's state controlled ROSNEFT and Spain's REPSOL that takes supply in exchange for its domestic production.  Although Venezuela has long supplied Cuba with oil under preferential terms, the wave of new shipments — equivalent to 200,000 b/d in the first half October — quadruple the volume that PDVSA had been delivering in recent months. Cuba has about 160,000 b/d of oil demand, with roughly 50,000 b/d covered by domestic production. The shipments should help the Cuban government to ease oil shortages that are crippling the island's transportation and electricity generation. But some are also likely to be resold, a PDVSA official said. (Argus: https://www.argusmedia.com/en/news/1989349-pdv-flooding-cuba-with-stranded-oil)

 

Brimming storage and no buyers: Venezuela’s oil production tanks

Venezuela’s oil production took another hit in recent days, as the country struggles with brimming storage tanks and no buyers. PDVSA slashed output in the Orinoco Belt to just 200,000 bpd, according to Bloomberg, after averaging roughly double that for much of this year. The lack of space in storage forced production cuts, including at joint venture projects, where output has been more stable. Sources told Bloomberg that the SINOVENSA blending facility would be idled for at least a week. Output had held up in recent months. While monthly totals bounce around from month to month, Venezuela’s production was stable at 750,000 bpd from April on. However, after months of relatively stable output, production began to slide again in August, falling to 712,000 bpd, according to OPEC’s secondary sources. Venezuela may now be on the verge of another decline. According to Bloomberg, the country only exported 495,000 bpd in September, and in the last week production fell to 510,000 bpd following the temporary shutdown of upstream heavy oil operations. Worse, the industry is in disrepair. Widespread pillaging, a worker exodus, lack of equipment, and a lack of capital plague oil operations. Luis Pacheco, who sits on the PDVSA board appointed by Guaidó, estimates that the industry needs US$ 120 billion in order to turn things around. There is almost no chance of even a faction of that without a change in the political context. (Oil Price: https://oilprice.com/Energy/Crude-Oil/Brimming-Storage-And-No-Buyers-Venezuelas-Oil-Production-Tanks.html)

 

Venezuela detains local head of oil joint venture with China: sources

Venezuelan authorities have arrested the president and two other officials in a corruption investigation at state oil company PDVSA’s SINOVENSA joint venture with China National Petroleum Corp (CNPC), oil sector and intelligence sources said on Saturday. The three detainees, in the latest round-up in the struggling and graft-plagued oil sector, are Venezuelan. The detention of SINOVENSA President Alberto Bockh in eastern Anzoátegui state on Thursday was confirmed to Reuters by five PDVSA sources, an intelligence source and another person in the local oil sector familiar with the case. It was unclear what the precise accusations were against him and the other two detained SINOVENSA employees. (Reuters, https://www.reuters.com/article/us-venezuela-oil/venezuela-detains-local-head-of-oil-joint-venture-with-china-sources-idUSKCN1WK0F5)

 

Oil-rich Venezuela and Russia come to aid of ally Cuba, but its energy woes persist

A flotilla of shipments from Venezuela gave Cuba some respite this week from crippling fuel shortages in the wake of tougher U.S. sanctions, while Russia’s prime minister pledged during a visit to the island on Friday to help develop its energy sector. But support from two of its closest allies looks unlikely to resolve Cuba’s energy problems and the government has extended many of the energy-saving measures it had introduced over the past month. Havana warned on Sept. 11 it had not secured enough shipments of refined fuels, such as gasoline and diesel, for the rest of the month due to sanctions imposed by the administration of U.S. President Donald Trump in retaliation for its support for Nicolas Maduro. In response to the shortages, Cuba swiftly deepened austerity measures it had introduced since an economic meltdown in Venezuela, its principal supplier, choked off its energy imports. (Reuters, https://www.reuters.com/article/us-cuba-economy-analysis/oil-rich-venezuela-and-russia-come-to-aid-of-ally-cuba-but-its-energy-woes-persist-idUSKBN1WJ2GS)

 

Inside Look at Venezuela’s Oil Belt

Five decades ago, Venezuela pumped 3.7 million barrels of oil a day. Now, it’s only producing a little over 700,000 barrels a day. Bloomberg’s Jessica Summers and Lucia Kassai discuss the collapse of the nation’s oil industry, the theft that goes on at Orinoco field, the lack of security and what it will take for a recovery. (Bloomberg, https://www.bloomberg.com/news/audio/2019-10-04/this-week-in-commodities-inside-look-at-venezuela-s-oil-belt)

 

Economy & Finance

ADOBE Is cutting off users in Venezuela due to US sanctions

ADOBE is shutting down service for users in Venezuela in order to comply with a US executive order issued in August that prohibits trade with the country. The company sent out an email to customers in Venezuela today to let them know their accounts would be deactivated and posted a support document further explaining the decision. In the document, Adobe explains: “The U.S. Government issued Executive Order 13884, the practical effect of which is to prohibit almost all transactions and services between U.S. companies, entities, and individuals in Venezuela. To remain compliant with this order, ADOBE is deactivating all accounts in Venezuela.” Users will have until October 28th to download any content stored in their accounts and will lose access the next day. To make matters worse, customers won’t be able to receive refunds for any purchases or outstanding subscriptions, as ADOBE says that the executive order calls for “the cessation of all activity with the entities including no sales, service, support, refunds, credits, etc.” The news is not only disastrous to designers and freelancers who rely on the company’s software like PHOTOSHOP and ILLUSTRATOR, but to NGOs and media outlets that will no longer be able to use software like INDESIGN, ACROBAT, and READER. The ban will also affect all free services like BEHANCE, ADOBE’s portfolio site, which requires a Creative Cloud account. It’s an unfortunate situation that highlights a downside of ADOBE’s subscription-based model — users lose access to the company’s products immediately as soon as the option to pay for them is removed, no matter how long they’ve been a customer. ADOBE says it’ll continue to monitor the US sanctions for more developments, but until then, accounts will remain deactivated. (Financial Times: https://www.ft.com/content/0c6ddd44-e95d-11e9-a240-3b065ef5fc55: The Verge: https://www.theverge.com/2019/10/7/20904030/adobe-venezuela-photoshop-behance-us-sanctions)

 

Maduro’s top envoy to Japan blasts freeze of bank accounts

The Maduro regime's ambassador to Japan rebuked a Japanese bank for effectively freezing his and other diplomats' accounts out of concerns that their use ran afoul of U.S. economic sanctions recently imposed on the country. The accounts, frozen since September, concern five with SMBC Trust Bank belonging to the ambassador, his wife and other diplomats. Ishikawa said that the accounts could not be used for Internet banking as well as withdrawing and transferring money via ATMs. In response to his inquiry, a bank official told Ishikawa that the accounts were frozen as a result of economic sanctions by the Trump administration against Nicolas Maduro’s regime. A senior official with the bank's Hiroo branch later visited the embassy and explained that their dollar accounts were frozen because of concerns that certain transactions ran against President Donald Trump's executive order signed Aug. 5. Ishikawa is a second-generation Japanese Venezuelan born to Japanese parents. His wife is Japanese, and they have four children with Japanese nationality. A bank official notified Ishikawa on Oct. 3 that his yen account would be reactivated, but not his U.S. dollar account. (The Asahi Shimbum: http://www.asahi.com/ajw/articles/AJ201910070027.html)

 

Politics and International Affairs

Russia boosts military ties with Maduro

Russia’s deputy prime minister Yuri Borisov met with Venezuela’s embattled incumbent Nicolas Maduro in Caracas on Saturday as the two countries boosted their military ties in Moscow’s apparent sign of continued support for the embattled dictator who is resisting an intense Western pressure to quit. The meeting between Borisov and Maduro was held in the framework of the high-level intergovernmental commission (CIAN) between Caracas and Moscow, Russia’s official news agency reported. Maduro thanked Russia for the military cooperation between the two countries, saying his nation had a solid defense grid to resist any outside aggression. He said that the two sides also renewed their agreements on the military-technical area during the meeting between the leaders. He also indicated that the two countries have made progress in advancing agreements on the exploration of oil and gas. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2484158&CategoryId=10717; Reuters, https://www.reuters.com/article/us-russia-venezuela/russian-deputy-prime-minister-in-venezuela-to-support-maduro-idUSKCN1WK0CF; https://www.reuters.com/article/russia-venezuela/russian-deputy-pm-to-meet-venezuelas-maduro-interfax-idUSL5N26Q0D8)

 

Venezuelans Find Medical Refuge in Colombia

The Arauca pier is already busy before sunrise. Hundreds of people arrive in boats from Venezuela to get medical attention, and to be sure they do, they must be among the earliest to stand in the long lines that quickly begin to form. One of the first buildings they come across in the city, which is the capital of Arauca province and is only separated from Venezuela by the swiftly flowing Arauca River, is that of the Colombian Red Cross. From 4:00 am, when the humidity and heat of the area are not yet so fierce, dozens of people, many with babies in their arms, line up outside the medical center waiting for the doors to open at 7:00 am with hopes of being among the 120 to be assigned their turn. Some have cardiac problems, others suffer respiratory illnesses and there are also pregnant women who, despite their pain, know that this is the only way to get good medical care. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2484150&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.

July 09, 2019

Oil & Energy

Squeezed by sanctions, Venezuela sells oil to tiny Turkish firm

With U.S. sanctions blocking Venezuela from selling oil to the United States, state-owned energy firm PDVSA has turned to several little-known buyers that include a tiny Turkish company with no refineries but ties to Nicolas Maduro’s regime. U.S. sanctions have driven away many customers. PDVSA’s exports have slumped by more than a fifth since sanctions were imposed. Its biggest buyers today are Chinese and Indian companies. Directors at a March 14 meeting of Maduro’s PDVSA board temporarily waived some requirements for new customers or suppliers, including that of having at least two years’ experience in the oil industry. In the wake of the changes, a Turkish company called Grupo IVEEX INSAAT started buying Venezuelan oil in April. Istanbul Chamber of Commerce records show that IVEEX INSAAT was formed less than a year ago with capital of just US$ 1,775 and listed “residential construction” as its main activity. It was one of only five firms that loaded tankers to take Venezuela’s upgraded crude - among its most valuable oil - from April through June, the documents showed. IVEEX loaded four cargoes of Venezuelan crude and products in April - equivalent to just under 8% of Venezuela’s oil exports - and nothing in May or June, according to PDVSA documents. Turkish corporate records show IVEEX INSAAT is owned by Miguel Silva, a Venezuelan businessman who heads the Caracas-based Venezuelan Exporters’ Chamber and served as a housing ministry commissioner in Maduro’s administration. Silva registered IVEEX INSAAT with a Turkish partner named Erhan Kap, an Istanbul tour guide, on Sept. 27, 2018, just a week after Maduro visited Istanbul. IVEEX reportedly has agreed to deliver refined products to Venezuela in exchange for receiving crude. With its refinery network crippled by maintenance issues, the OPEC nation has struggled with severe fuel shortages in recent months. The two other companies that only began chartering tankers to take PDVSA’s oil after sanctions hit are Panama-registered MELAJ Offshore Corp and Sahara Energy, a unit of Nigeria-based Sahara Group. The two loaded PDVSA oil cargoes shortly after the sanctions were announced. (REUTERS: https://www.reuters.com/article/us-venezuela-oil-turkey/squeezed-by-sanctions-venezuela-sells-oil-to-tiny-turkish-firm-idUSKCN1U324M)

 

OPEC wants quick resolution to tensions between US and Iran, Venezuela

OPEC has asked on Monday for a timely settlement to the tensions that have flared up between the United States and Iran and Venezuela. Iran and Venezuela, both founding members of OPEC, are both exempt once again from the production cut extensions that the cartel announced last week and will remain exempt for as long as they remain under sanction. Both Iran’s and Venezuela’s production woes have contributed significantly to the cartel’s over compliance to the group’s production cut quota, with Iran’s crude production falling from an average of 3.813 million barrels per day in 2017 to 2.370 million barrels per day in May 2019, and Venezuela’s crude production falling from 1.911 million bpd on average in 2017, to an abysmal 741,000 bpd in May 2019. But while the two countries combined seemingly did OPEC a favor by taking more than 2.6 million barrels of crude oil per day out of the market within that time frame, the tensions in the Persian Gulf and the dire situation in Venezuela are creating a market that OPEC is finding it difficult to both predict and manage. (Oil Price: https://oilprice.com/Latest-Energy-News/World-News/OPEC-Wants-Quick-Resolution-To-Tensions-Between-US-And-Iran-Venezuela.html)

 

Amuay and Cardon refineries halted by blackout

Venezuela’s Amuay and Cardon refineries are halted following a blackout in the early morning hours, two oil industry sources with knowledge of the issue said on Sunday. The twin refineries together form the 955,000 barrel-per-day (bpd) Paraguana Refining Center, which has been operating well below capacity for years because of chronic operational problems that have been aggravated by Venezuela’s economic crisis. “Blackout in both refineries,” one employee who works in the complex wrote in a text message. “It’s going to be difficult to get the system back up.” (Reuters, https://www.reuters.com/article/refinery-operations-pdvsa-amuay/update-1-venezuelas-amuay-and-cardon-refineries-halted-by-blackout-sources-idUSL2N24802S)

 

CHEVRON is playing a long game in Venezuela’s oil fields

Donald Trump may have slammed Venezuela with sanctions in an effort to change the regime of President Nicolás Maduro, but the country’s energy industry has an unlikely ally: CHEVRON Corp. Despite the U.S. administration’s push to disrupt the financial resources available to Venezuela’s leadership, the second-biggest U.S. oil company is working to bolster one of the Maduro government’s chief economic pillars—its ability to produce crude oil. CHEVRON is helping tap four fields in the country while testing new injection technologies to maximize production in one. CHEVRON is also helping pay for supplies, expenses, and even health care for workers at state-owned oil producer PDVSA to keep the crude flowing. CHEVRON’s actions are an attempt to play the long game in economically ravaged Venezuela. If Maduro retains power, CHEVRON will keep its tenuous—but still profitable—foothold in Venezuela. If he’s forced out and U.S. sanctions end, the company could be first in line to gain from the country’s vast geologic riches. The gamble puts CHEVRON in the same group as state-controlled producers from Russia and China that have been supportive of the Maduro regime—and potentially at odds with its home country. The company is working under a Department of the Treasury waiver of U.S. sanctions against Venezuela that expires on July 27. A decision by the U.S. government not to renew the waiver could cripple the production of more than 200,000 barrels a day at the four projects Chevron is keeping afloat, even though most of that production goes to PDVSA. And it could lead Maduro to hand CHEVRON’s stakes in these fields to other explorers.  Positioning itself to outlast Maduro won’t be easy. Last year two Chevron employees were arrested and held for seven weeks for reasons neither the government nor the company disclosed. Still, the oil producer continues to work with the government to keep its operation intact. That could mean braving Trump administration pressure and weathering the worsening humanitarian crisis, but the payoff might be worth the risks. “Whatever government that is coming in will be dealing with very diverse issues and doing it with very little cash in the bank, and that presents a unique opportunity,” says Schreiner Parker, vice president for Latin America at consulting firm RYSTAD Energy. “In the medium to long term with regime change, we believe Venezuela will become very investor-friendly, out of necessity more than anything.” (Bloomberg: https://www.bloomberg.com/news/articles/2019-07-09/chevron-is-playing-a-long-game-in-venezuela-s-oil-fields)

 

Economy & Finance

JP Morgan to cut Venezuela weight to zero in key indexes over five months

JP Morgan will reduce the weight of Venezuela's sovereign and PDVSA bonds to zero in its widely tracked indexes, the bank said on Tuesday, phasing them out over five months starting on July 31. Venezuela's weight was 0.5%, 0.9% and 1.2% in the EMBI Global Diversified, EMBI Global and EMBI+ indices, respectively, it added. As a result of dialing down the weighting, JP Morgan said the headline EMBIGD yield and spread were estimated to compress by about 45 basis points. JP Morgan said it could open another index watch process in "the event of any favorable official guidance around easing of trading restrictions or consistent, observable improvements in liquidity and replicability of Venezuela bonds." (NASDAQ: https://www.nasdaq.com/article/jp-morgan-to-cut-venezuela-weight-to-zero-in-key-indexes-over-five-months-20190709-00584)

 

Maduro regime says U.S. sanctions hit debt refinancing, oil sales

Nicolas Maduro’s Vice foreign minister William Castillo also Venezuela charged on Friday that U.S.-led sanctions had stopped foreign debt refinancing, blocked vital food and medicine imports, and cost billions of dollars in lost oil assets. Maduro’s government says Venezuela is the victim of a U.S. plot to topple him, eradicate socialism and hand the world’s largest oil reserves to multinationals. (Reuters, https://www.reuters.com/article/us-venezuela-un/venezuela-says-u-s-sanctions-hit-debt-refinancing-oil-sales-idUSKCN1U014B)

 

Bitcoin trading activity goes ballistic in Venezuela as rule of law erodes

The worse the political, social, and economic conditions in Venezuela get, the more that residents suffering under the Maduro regime pile into Bitcoin. According to Coin Dance, more than 47 billion Venezuela bolivars were traded against Bitcoin in the first week of July. This broke a previous record that had been set in mid-June. While the rising amounts of bolivars being spent on buying Bitcoin could be attributed to the fact that the Venezuelan currency is perpetually weakening, it also coincides with the price of the flagship cryptocurrency appreciating considerably in the last couple of weeks. As of April, the inflation rate in Venezuela was estimated to have hit 1,300,000%. Mid last month, the country announced a 50,000-bolivar bill designed to ease business transactions. Maduro will have released new banknotes for the second time in less than a year. Still, Venezuela ranks among the top 30 countries whose national currencies are the most traded for Bitcoin, according to Coinhills. While BTC/VES volumes have been on a steady increase since the beginning of 2018, Venezuela now has a national cryptocurrency, the Petro, which is competing for attention with Bitcoin. With Venezuelans already witnesses to how government-issued money can quickly lose its purchasing power in the face of hyperinflation, this move will only be beneficial to Bitcoin: The Maduro regime may be force-feeding the Petro on the people, but that will likely just serve as a gateway drug to Bitcoin. (CCN: https://www.ccn.com/crypto/bitcoin-trading-volume-venezuela/2019/07/08/)

 

Politics and International Affairs

Guaido announces fresh talks with Maduro regime

Venezuelan opposition leader Juan Guaido on Sunday announced fresh talks with the government of President Nicolas Maduro. Guaido, who became acting president earlier this year, said the Norway-brokered talks aim "to establish a negotiation on the end of the dictatorship," referring to Maduro's regime. "The Venezuelan people, our allies and the world's democracies recognize the need for a truly free and transparent electoral process that will allow us to surpass the crisis and build a productive future," he said. Guaido is hoping the negotiations eventually lead to Maduro stepping down and "free elections with international observers." In May, delegations representing both parties met in Oslo under Norwegian mediation. However, the talks have yet to provide a path forward for the political impasse here. But Venezuela's opposition is wary of talks with Maduro's regime. Previous attempts to end the country's political crisis have failed, with critics saying they have only served to further solidify his rule. Norway which hosted the preliminary talks and is mediating the protracted process says the aim of the upcoming round of discussions in Barbados, is to move further forward towards a constitutional settlement. The opposition led by Juan Guaido wants a transitional government to replace the regime of Nicolas Maduro, and then free elections monitored by international observers. Guaido insists he`s the legitimate Interim President, recognized by more than fifty nations all around the world.  While Maduro states he`s the democratically elected President. (DW: https://www.dw.com/en/venezuelas-guaido-announces-fresh-talks-with-maduro-regime/a-49507748; Vatican News: https://www.vaticannews.va/en/world/news/2019-07/venezuela-cardinal-government-opposition-dialogue.html; Reuters, https://www.reuters.com/article/us-venezuela-politics/venezuela-opposition-says-it-will-meet-maduro-envoys-in-norway-mediated-talks-idUSKCN1U20TF; https://www.reuters.com/article/us-venezuela-politics-norway/venezuela-talks-to-resume-this-week-norway-idUSKCN1U30GU)

 

Barbados welcomes being the site for talks as CARICOM leverages ties with Caracas

Barbados Prime Minister Mia Amor Mottley Monday welcomed plans by both sides to hold talks in Barbados. “Since January, the government of Barbados along with other CARICOM governments has made it clear that the time for dialogue is never over. As a zone of peace, we will want to see a very peaceful resolution to the problems in Venezuela,” Mottley told reporters. Caribbean Community (CARICOM) leaders who have in the past adopted a position of non-interference and non-intervention in the affairs of this country, last week re-affirmed that position during their annual summit held in St. Lucia. Mottley made it clear that apart from hosting the meeting, Barbados will be playing no major role in the discussions. “This is a matter that requires the utmost patience, so it is not something that you should be asking me or anybody about on a daily basis, let the people talk. When you have deep divisions, it takes time and I have every confidence in the government of Norway being able to do what CARICOM has wanted done since January,” she said. Caribbean nations that used to rely on cheap Venezuelan oil are now hoping to leverage their ties with Caracas to help broker a negotiated settlement to the political crisis there. "This issue is one for the Venezuelans to work out," Trinidad´s prime minister Keith Rowley said. Norway's prime minister Erna Solberg was a guest at the CARICOM summit, and the group is playing the role of an honest broker in the Venezuelan crisis, St. Kitts-Nevis prime minister Timothy Harris said. (Caribbean Broadasting Corporation: http://www.cbc.bb/wordpress/2019/07/09/pm-pleased-with-plans-for-negotiations-to-end-venezuela-crisis/; Argus Media: https://www.argusmedia.com/en/news/1935802-caribbean-sets-stage-for-thorny-venezuela-talks)

 

Maduro 'optimistic' as crisis talks resume

Nicolás Maduro said he was "optimistic" as talks between his regime and the opposition to resolve the country's political crisis resumed on Monday. Preliminary talks held in May in Oslo petered out without an agreement. Maduro said a six-point agenda was being discussed at the meeting which is being hosted by Barbados. He did not give further details. The Norwegian foreign ministry is again acting as a mediator, as it did at the previous meeting in Oslo, but has so far only commented to confirm the meeting was taking place. Maduro revealed that Monday's meeting lasted five hours. He also said he thought "a path to peace" could be found. Just a week ago Guaidó ruled out a return to negotiations, citing as a reason the death in custody of an army captain whose body showed signs of torture. Guaidó has not said why his stance has changed. Some in the opposition say the talks are a ruse by the government to buy itself more time in power. On Friday Maduro said he doesn’t think it necessary to hold presidential elections in the country right now. "What does the people of Venezuela need today? Elections? I don’t think so," he told journalists. "The people of Venezuela needs economic revival, peace and constitutional stability. And it is necessary to reelect the National Assembly for that," he said. "The opposition wants no elections," he said. "If we say elections will be held in 30 days, they will begin inventing reasons to dodge them." (BBC: https://www.bbc.com/news/world-latin-america-48904193; TASS: https://tass.com/world/1043923)

 

Venezuela's rule of law has crumbled under Maduro, international legal group reports

The rule of law has crumbled in Venezuela under the regime of Nicolas Maduro which has usurped the powers of the legislative and judicial branches, an international legal watchdog said on Monday. The International Commission of Jurists (ICJ) called on Venezuelan authorities to reinstate democratic institutions as part of a solution to the political, economic and humanitarian crisis engulfing the OPEC member. The government and a compliant Supreme Court effectively stripped the National Assembly of most powers after the opposition won a majority in 2015 elections. Lawmakers loyal to Maduro generally do not attend the sessions but go to meetings of the Constituent Assembly, a legislative body that meets in the same building. The Constituent Assembly, created in a 2017 election boycotted by the opposition, is controlled by the ruling Socialist Party and its powers supersede the National Assembly. Sam Zarifi, ICJ secretary-general, presented its latest report on Venezuela: “No Room for Debate”. “The focus of this report is on the usurpation of the authority of the legislative by the government in Venezuela. This comes after the judiciary was taken over,” he told a news briefing. The Constituent Assembly was “formed improperly and illegitimately” and has gone far beyond its stated role, Zarifi said, adding: “In fact it seemed to do everything but really discuss a new Constitution”.  “Addressing the problem of the National Constituent Assembly is a crucial step in any political solution to the crisis that has gripped Venezuela,” ICJ’s Zarifi said, urging the government to engage with the opposition-led legislature. (NBC News: https://www.nbcnews.com/storyline/venezuela-crisis/venezuela-s-rule-law-has-crumbled-under-maduro-international-legal-n1027406)

 

Poll shows 64,6% of Venezuelans would vote in any new presidential election

A recent poll by the Catholic University’s Center for Political Studies and Government, along with DELPHOS, shows that 64.6% of Venezuelans are willing to vote if new presidential elections are called; and the number goes up to 70.2% if Nocolás Maduro resigns and stays out of the process, the National Elections Council is changed and there are international observers. An opposition candidate would get 67% of all votes (12.9 million) and a regime candidate would receive 33% (6.3 million). Another 15.1% of those polled indicated they might vote. More in Spanish: (El Universal, http://www.eluniversal.com/politica/44895/646-de-los-venezolanos-votarian-en-elecciones-presidenciales)

 

Venezuelans deserve better life, free from fear, UN Human Rights Chief says

The United Nations High Commissioner for Human Rights said on Friday that Venezuelans deserve a better life that is free from fear and whereby they have access to food, water and health services during the presentation of her report on Venezuela before the Human Rights Council. “The fate of more than 30 million Venezuelans rests on the leadership’s willingness and ability to put the human rights of the people ahead of any personal, ideological or political ambitions,” Michelle Bachelet said during presentation of her report in Geneva. The report accuses the Nicolas Maduro regime of grave human rights violations and documents, among other serious incidents, more than 6,800 extra-judicial killings by the Venezuelan armed forces between January 2018 and May 2019. These killings, “should be fully investigated, with accountability of perpetrators, and guarantees of non-recurrence,” added Bachelet. The UN High Commissioner for Human Rights also denounced a pattern of torture reports during arbitrary detentions and mentioned the recent death of Rafael Acosta, a retired navy captain, who died in custody. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2480704&CategoryId=10717)

 

Maduro slams UN human rights report, says it's full of lies

Nicolás Maduro on Monday said he had demanded the rectification of what he described as lies included in the latest United Nations report on human rights in this country. He also said that the United Nations High Commissioner for Human Rights and former president of Chile, Michelle Bachelet, had "made a wrong call" with the report's outcome. (EFE: https://www.efe.com/efe/english/world/venezuela-s-maduro-slams-un-human-rights-report-says-it-full-of-lies/50000262-4018799)

 

Venezuelan bishops condemn death of naval captain while in custody, other atrocities

The Venezuelan bishops' justice and peace commission have condemned the death in custody of Rafael Acosta Arévalo, a naval captain who was arrested over an alleged assassination plot against president Nicolas Maduro. Acosta's lawyer alleges the officer had been tortured while in custody. Two members of Venezuela's military counterintelligence agency have been charged in relation to Acosta's death. The bishops also protested that police had allegedly disfigured and left blind Rufo Chacón Parada, a youth, as he was demonstrating about the lack supplies in the country. “The Venezuelan state is responsible. We will not consent to the manipulation, dissimulation and downplaying of these grave incidents,” the bishops' justice and peace commission stated July 4. The bishops said that “the forced disappearance, torture, cruel, inhuman or degrading treatment, excesses committed by the police … against Venezuelans are practices that have taken hold in the military and police corps, and are occurring on an ongoing basis, like a secret that cries out in our consciences.” “Silence is not an option in face of so much outrage,” the bishops said. The bishops noted that the men charged in relation to Acosta's death, Lt Ascanio Tarascio and Sgt Esteban Zarate, are 22 and 23, and asked: “This is the generation the armed forces are passing the baton to? Who taught these young men how to do so much harm to their brothers? What are the responsibilities of their superiors in the chain of command in these institutions?” They emphasized that “these young perpetrators are also victims of a system that has allowed this moral and spiritual degradation in our country.” In addition, a Venezuelan Cardinal is accusing the Maduro regime of intimidation and has reiterated his appeal to Nicolas Maduro to engage in dialogue. In an interview with the Pontifical Foundation ‘Aid to the Church in Need’, Archbishop Baltasar Porras of Merida, apostolic administrator of Caracas and President of Caritas Venezuela, shone the light on the limitations and intimidation perpetrated by the government against Church officials and organizations. He decried the fact that those who are bringing aid to the impoverished population and even parishes are continuously under pressure to stop their work.  (Catholic News Agency: https://www.catholicnewsagency.com/news/venezuelan-bishops-condemn-death-of-naval-captain-while-in-custody-74364; Vatican News: https://www.vaticannews.va/en/world/news/2019-07/venezuela-cardinal-government-opposition-dialogue.html)

 

Venezuelan journalist Braulio Jatar conditionally released, barred from leaving country

Venezuelan online and radio journalist Braulio Jatar was formally released from house arrest today after receiving official notification from a criminal court in his home state of Nueva Esparta. As mandated by the court, Jatar - who was charged but not tried for money laundering -- is barred from leaving Nueva Esparta and is required to present himself before that court every 15 days, according to his statement. Jatar's release was first announced by U.N. High Commissioner for Human Rights Michelle Bachelet on July 5, according to press reports. According to the reports, Bachelet had requested the release of Jatar and other high-profile prisoners during her June visit to Venezuela. The news came after the U.N. Human Rights Council held a debate on Bachelet’s report of a visit to Venezuela in June. The report accused Venezuelan security forces of sending death squads to murder young men but a vice minister rejected that in a speech to the Geneva forum on Friday. “The welcome releases of 62 detainees then (in June), with a further 22 – including journalist Braulio Jatar and judge (Maria) Lourdes Afiuni – set free yesterday and the authorities’ acceptance of two human rights officers in the country, signify the beginning of positive engagement on the country’s many human rights issues,” Bachelet said. (Committee to Protect Journalists: https://cpj.org/2019/07/venezuelan-journalist-braulio-jatar-conditionally-.php; Reuters, https://www.reuters.com/article/us-venezuela-un-prisoners/venezuela-releasing-judge-journalist-20-students-u-n-idUSKCN1U016V)

 

US expresses concerns for wrongfully detained U.S. persons (CITGO 6) in Venezuela

The United States demands that the former Maduro regime release the wrongfully detained “CITGO 6” in Venezuela. These men are suffering serious health conditions and must be released immediately. Maduro loyalists continue to prevent the families and attorneys of American prisoners from assisting with basic access to food and medicine, without regard for mental health and general well-being of those detained. These affronts to basic dignity will not be ignored.  The Department of State continues to press Maduro’s representatives for their assurance of the safety and welfare of Americans wrongfully detained in Venezuela. (US Department of State: https://www.state.gov/concerns-for-wrongfully-detained-u-s-persons-citgo-6-in-venezuela/)

 

UN agencies welcome regional road map to help integrate ‘continuing exodus of Venezuelans’

A new road map adopted by Latin American and Caribbean countries, to help better integrate refugees and migrants from crisis-hit Venezuela into new host societies, drew a warm welcome from two UN agencies on Monday. UN refugee agency UNHCR, and the International Organization for Migration (IOM) lauded the joint declaration that agrees to reinforce cooperation, communication and coordination between the countries of transit and destination; strengthen measures against people-smuggling and trafficking; and protect the most vulnerable by combatting discrimination, xenophobia and sexual and gender-based violence. The road map was adopted late last week during the International Technical Meeting of the Quito Process, in the Argentine capital, Buenos Aires, with the participation of 14 Latin American and Caribbean governments, UN agencies, regional organizations, development banks and civil society The meeting highlighted the actions and efforts of the regional countries, not only in terms of reception, documentation and humanitarian assistance, but also in promoting access to health, education, employment, and housing on behalf of Venezuelan refugees and migrants. The Road Map of the Buenos Aires Chapter sets out specific actions on human trafficking, healthcare and for recognizing academic qualifications of Venezuelan professionals, as well as establishing information and reception centers. A so-called Information Card for Regional Mobility is a priority commitment, to complement and strengthen the documentation and registration processes at national levels where it exists or is being developed. According to data from national immigration authorities and other sources, the number of refugees and migrants from Venezuela around the world has now exceeded four million. (UN News: https://news.un.org/en/story/2019/07/1042041)

 

On Venezuelan Independence Day Maduro called for “dialogue” as Guaido slammed 'dictatorship'

Venezuela’s bitterly divided political factions held competing commemorations of the country’s independence day on Friday, with President Nicolas Maduro calling for dialogue and opposition leader Juan Guaido decrying alleged human rights violations by Maduro’s “dictatorship.” Speaking to a gathering of top military officials, Maduro reiterated his support for a negotiation process mediated by Norway between his socialist government and Guaido, the leader of the opposition-held National Assembly who argues Maduro’s 2018 re-election was a fraud. (Reuters, https://www.reuters.com/article/us-venezuela-politics/on-venezuelan-independence-day-maduro-calls-for-dialogue-as-guaido-slams-dictatorship-idUSKCN1U022E)

 

Maduro ratified General Padrino as Defense Minister

Nicolas Maduro on Sunday announced he will maintain Defense Minister General Vladimir Padrino in his post, following months of rumors that top military brass would be replaced after a failed uprising in April. The Trump administration identified Padrino among the top officials involved in negotiations with opposition leader Juan Guaido to create a transition government on April 30, in response to the country’s economic meltdown. Since then, General Padrino has publicly professed loyalty to Maduro along with the majority of the armed forces, which are seen as the main reason why Maduro held on to power despite a hyperinflationary collapse. (Reuters, https://www.reuters.com/article/us-venezuela-politics-military/venezuelas-maduro-ratifies-padrino-as-defense-minister-idUSKCN1U305G)

 

OP-ED: Will more talks that do not include the military resolve Venezuela’s crisis?

Representatives from Venezuelan President Nicolás Maduro’s government and the opposition are expected to meet this week in Barbados for another round of talks mediated by Norway. Previous discussions to end the country’s ongoing political crisis have ended in deadlock. The talks so far have involved two parties: Maduro’s government, which still controls state institutions largely due to military backing; and the opposition led by Juan Guaidó, who is recognized as Venezuela’s acting president by more than 50 countries. Guaidó, like many in the opposition, is skeptical of dialogue. Maduro’s critics see it as a stalling tactic. What to expect: Guaidó has demanded a solution this time, but the talks could again be limited by the two-party approach, said Moises Rendon, the associate director of the Americas program at the Center for Strategic and International Studies. “The new round of negotiations has a flaw that hasn’t been addressed in the last rounds: who is representing Maduro’s government and who is representing Guaidó’s government,” Rendon said. “I don’t think it’s going anywhere, because you don’t have the full representation of all the forces within the Maduro regime”—including the military.” Last week, the United Nations released a report alleging thousands of extrajudicial killings carried out by Venezuelan special forces over the past 18 months. “That will help on the leverage of the Guaidó side,” Rendon said. But it could have limited impact on this week’s negotiations. “The [U.N.] report did not go that far in terms of connecting the human rights violations they described to the Maduro government,” he added. “It’s not shedding light on who’s responsible.” (Foreign Affairs: https://foreignpolicy.com/2019/07/09/another-round-of-talks-for-venezuela-maduro-guaido-iran-europe-trump-uk-darroch/)

 

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.