US Hits PDVSA with More Sanctions as UNSC Fails to Pass Resolution on Venezuela

US Treasury imposed a de facto oil embargo against Venezuela as the diplomatic standoff over Guaido’s self-proclamation continues.


Pays de Gex, France, January 28, 2019 ( – The US Department of the Treasury announced new sanctions against Venezuelan state oil company PDVSA on Monday.

According to a statement from the Treasury Department, all PDVSA assets under US jurisdiction are blocked effective immediately, and US citizens and companies are “generally prohibited from engaging in transactions [with PDVSA].” The statement adds that the Office of Foreign Assets Control (OFAC) may issue licenses to “authorize transactions and activities related to PDVSA and its subsidiaries within specified timeframes.”

Treasury Secretary Steve Mnuchin stated that the US “will continue to use economic and diplomatic tools to support Juan Guaido,” who declared himself “interim president” of Venezuela last week and has been recognized by Washington and its allies.

Mnuchin explained that oil currently at sea that had already been paid for would make its way to US refineries, but that new purchases would only take place if the payments proceeded to a blocked account in what amounts to a de facto oil embargo against the country.

“If the people of Venezuela want to continue to sell us oil, as long as that money goes to blocked accounts, we’ll continue to take it. Otherwise we will not be buying it [oil],” the top Treasury official continued. He added that frozen oil revenues would be transferred to a future transition government headed by Guaido.

Under the new sanctions, Venezuela’s US-based subsidiary CITGO may continue its operations provided that the proceeds are likewise deposited in a blocked account.

During the same press conference, National Security Advisor John Bolton estimated the latest sanctions would cause Venezuela to lose around US $11 billion in exports in 2019 and freeze around $7 billion worth in assets. Bolton also urged the Venezuelan military to accept a transfer of power to Guaido.

The move comes as the diplomatic standoff over international recognition of Guaido reached new levels of intensity.

Over the weekend, the United States convened a meeting of the United Nations Security Council (UNSC) in New York on Saturday. Attempts by Secretary of State Mike Pompeo to get the UNSC to approve a statement recognizing Guaido as the legitimate president of Venezuela did not make it to a vote amid stern opposition from Russia, China and other countries.

During the session, Pompeo addressed the body and urged countries to “pick a side.”

“Either you stand with the forces of freedom, or you’re in league with Maduro and his mayhem,” he declared.

For his part, Russian Ambassador Vasily Nebenzya, stressed that “regime change is the favorite geopolitical game of the United States,” adding that Russia upholds the rules of international law and opposes foreign intervention.

China, Nicaragua, Bolivia, Cuba and South Africa were among the countries who addressed the UNSC and expressed support for the Maduro government. Chinese Ambassador Ma Zhaoxu reiterated that countries should not interfere in each others’ affairs, while his South African counterpart Jerry Matjila expressed South Africa’s opposition to “any attempt of unconstitutional change of the government of Venezuela.”

Venezuelan Foreign Minister Jorge Arreaza also had the opportunity to address the Security Council, stating that “The United States is not behind the coup d’état, it is in the vanguard.”

“How can it be possible for a lawmaker to proclaim himself president and for international governments to recognize him?” he asked.

Arreaza also slammed European governments after Spain, France and Germany issued statements threatening to recognize Guaido if new elections were not called within 8 days. “Nobody is going to give us deadlines or tell us if there are elections or not,” he said.

Meanwhile, a tentative agreement was reached regarding the status of US diplomatic personnel in Venezuela. Maduro had ordered all US personnel to leave the country, with Mike Pompeo initially denying the Venezuelan government’s authority to sever diplomatic relations. The Trump administration subsequently reversed its stance, and a ten vehicle caravan departed for Maiquetia airport on Friday morning.

On Saturday, the US and Venezuela agreed to open “interests sections” in each other’s capitals within 30 days.

In the meantime, Venezuela recalled its entire diplomatic corps from its US embassy and consulates. In spite of this, two diplomats defied the order to return and publicly recognized Guaido. Colonel Jose Luis Silva, military attache in the Venezuelan embassy in Washington announced his defection on Saturday, whereas Miami-based diplomat Scarlet Salazar released a message on Monday.

On Sunday evening, reports emerged that the US State Department had accepted Juan Guaido’s nomination of Carlos Vecchio as charge d’affaires in the United States. It is unclear how this connects to the agreement with the Venezuelan government to open interest sections. On Monday, Foreign Minister Arreaza indicated that dialogue with the US government remains ongoing.

Vecchio is a leading figure in the hard-right Popular Will party, of which Juan Guaido is also a member. Vecchio fled the country in 2014 to escape an arrest warrant on charges including arson and instigation of violence. He has since joined other opposition leaders abroad, such as Julio Borges and Antonio Ledezma, in lobbying for sanctions against Venezuela.

National Security Advisor John Bolton took to Twitter on Sunday, threatening that “Any violence and intimidation against U.S. diplomatic personnel, Venezuela’s democratic leader, Juan Guiado [sic], or the National Assembly” would be met with a “significant response.” The hawkish former Bush administration official also claimed that Cuba’s control over Venezuelan security forces is “well known.”

Reports also revealed on Sunday that Guaido has lobbied British authorities not to return US $1.3 billion worth of gold that Venezuela currently has in the Bank of England. The total amount increased from $550 million after the Venezuelan Central Bank (BCV) recently closed a gold swap deal with German Deutsche Bank. BCV President Calixto Ortega met with Bank of England officials in December, but the latter have refused to repatriate the Venezuelan gold.

Australia and Israel joined the group of countries that recognize Guaido. Israeli PM Benjamin Netanyahu stated that the country was joining the US, Canada and other governments in Europe and Latin America in recognizing the “new leadership” of Venezuela, while Australian Foreign Affairs Minister Marise Payne said Australia would support Mr Guaido until elections were called.

Edited and with additional reporting from Lucas Koerner in Caracas.