On October 18, the US announced the biggest easing of sanctions against Venezuela since the beginning of the blockade against the South American country. Through six general licenses, the US Treasury Department temporarily released transactions in the Venezuelan oil, gas and gold sector.
In addition, relief measures also involve trading in national bonds on the stock market and permits for the Venezuelan state airline Conviasa, which has been cleared to fly to the US on migrant repatriation missions.
The decision was justified by Washington as being a response to the agreement signed between the Venezuelan government and opposition on October 17 in Barbados, which defined the period for holding the Venezuelan presidential elections and established other rules on the voting process.
Washington’s demand for fuel gave them more motivation to return to negotiations with Venezuela. The White House had been citing the drawing up of an electoral timetable as a kind of requirement that had to be presented by the Venezuelan government in order for sanctions to be lifted.
Now, according to the Office of Foreign Assets Control (OFAC), the renewal of new licenses is conditional on compliance with the electoral agreement. “The Treasury Department is prepared to modify or revoke the authorizations at any time if representatives of [President Nicolás] Maduro fail to follow through on their commitments,” the agency said in a statement.
The Venezuelan government celebrated the suspensions and called the act a diplomatic victory and a first step towards the “total suspension of the blockade.” On Wednesday night, Maduro said that both countries had found a way to end the sanctions and hoped that they could “turn the page.”
“I say to the United States that we have always wanted and still want respectful relations. Stop your hatred of the revolutionary project, of sovereign Venezuela, your desire for revenge. Let’s turn the page and rebuild a relationship of respect and cooperation,” he said.
End of the blockade?
Despite benefiting the most important areas of the Venezuelan economy and surprising even opposition figures by the breadth of their scope, the licenses issued by the US on Wednesday do not represent the end of the blockade against Venezuela.
This is because they are only general licenses, which can be revoked unilaterally by the Treasury Department. In addition, all of the more than 900 sanctions against the South American country “remain in effect and we continue to hold criminals accountable,” OFAC said in a statement.
Despite its temporary nature, this was the most numerous and significant license issued by the US since the country formally began its blockade against Venezuela in 2014, during the administration of Democrat Barack Obama. Until then, the largest license had been granted to energy giant Chevron in December last year, when it was authorized to resume operations in Venezuelan territory.
However, the measures announced on Wednesday should allow for the “production, extraction, sale and export of oil and gas from Venezuela and the supply of related goods and services.” In addition, the license authorizes payment in cash for these activities and also new investments in the sector.
In practice, these provisions render ineffective the total ban determined by former President Donald Trump in 2019, which prohibited any negotiation involving Venezuela’s state oil company PDVSA and its subsidiaries. The measure had a serious effect on the country’s economic crisis, as it virtually blocked Venezuelan oil activities. According to official figures, the country has suffered a 98% reduction in dollar inflows over the last 10 years.
It is not yet clear what the economic impact of the newly issued licenses would be, but according to Venezuelan Vice President Delcy Rodríguez, the state would have no problem receiving for any transactions since the measures also authorize the use of the Central Bank of Venezuela and the Bank of Venezuela to make payments.
The clarification made by Rodríguez relates to the fact that the US still does not formally recognize the Maduro government and therefore only maintains official relations with the fictitious institutions created by the opposition during the period in which Juan Guaidó was considered “interim president.” Among these “institutions” would be a parallel Central Bank.
“The licenses also authorize the BCV and the BdV for financial transactions related to oil and gas operations in our country. This authorization will enable payment mechanisms. This is a first step towards re-establishing international legality in relation to economic and financial freedoms,” said the vice-president.
The OFAC licenses also allow negotiations with Venezuelan state-owned mining company Minerven in the international gold trade. Another clearance was for Venezuelan securities to be traded on the secondary stock market.
In addition, the state-owned airline Conviasa has been authorized to carry out repatriation flights for Venezuelan migrants who are in the US. The company’s participation is part of a previous agreement signed between Washington and Caracas which also provides for US flights to Venezuela bringing Venezuelan citizens. On Wednesday, the first flight that was part of this agreement landed at Caracas International Airport bringing 131 Venezuelans from the state of Texas.
Opponents released
In the early hours of Wednesday morning, the head of the opposition delegation at the dialogue table, Gerardo Blyde, announced the release of five opposition politicians who had been imprisoned in the country. According to Blyde, the releases are also part of the negotiations with the government. “It’s a long process that is now starting to happen,” he said.
Among those released are former deputy Juan Requesens, imprisoned for five years and sentenced in 2022 for the assassination attempt against President Nicolás Maduro that took place in 2018, and Roland Carreño, a former advisor to Juan Guaidó who was arrested in 2020 on charges of planning acts of sabotage against the oil industry. They were joined by Marco Antonio Garcés, accused of facilitating the entry of US spies into Venezuela, Eurinel Rincón and Mariana Barreto.
The release of the five politicians was celebrated not only by the opposition delegation at the talks, but also by other right-wing figures such as former presidential candidate Henrique Capriles and other opposition parties. At the time of writing, the Venezuelan government had not yet commented on the release of the prisoners.
This article was first published in Brasil de Fato.
