Last week the Trump administration declared its support for Venezuela’s interim president Juan Guaidó, causing immediate backlash from Maduro.
“Today’s designation of PdVSA will help prevent further diverting of Venezuela’s assets by Maduro and preserve these assets for the people of Venezuela,” said Treasury Secretary Steven Mnuchin in a statement. “The path to sanctions relief for PdVSA is through the expeditious transfer of control to the interim president or a subsequent, democratically elected government.”
Specifically, PdVSA was added to OFAC’s Specially Designated Nationals and Blocked Persons (SDN) List, which prevents U.S. persons and entities from conducting business with the Venezuelan company.
OFAC’s willingness to lift sanctions mirrors a similar approach recently used against three Russian industrial companies that had significant financial and management ties to Russian oligarch Oleg Deripaska, a political associate of Russian President Vladimir Putin. When the companies demonstrated that they had shed Deripaska’s majority share, Treasury authorized the end of U.S. sanctions against them.
“U.S. sanctions need not be permanent. Sanctions are intended to change behavior,” Treasury said.
However, Treasury noted that PdVDA in recent years had developed numerous schemes to funnel billions of dollars to corrupt Maduro regime officials and businessman.
While under the sanctions all property and interests in property of PdVSA subject to U.S. jurisdiction are blocked and U.S. persons are generally prohibited from conducting business with the oil company, OFAC has issued general licenses that authorize certain transactions and activities related to PdVSA and its subsidiaries within specified time frames.
The order is expected to have the biggest impact on Houston-based Citgo, which is Venezuelan-owned, and U.S. oil refiner Valero.