Mexico City, Mexico, September 12, 2023 (venezuelanalysis.com) – Billions in frozen Venezuelan assets destined for a social fund to be invested in education, healthcare and infrastructure repairs are expected to be released soon, El País reported Friday.
In November the Nicolás Maduro government and the hardline opposition agreed to a US$ 3 billion fund, to be drawn from Venezuelan assets abroad, as part of negotiations held in Mexico and mediated by Norway. A statement released at the time of the agreement said the money, to be administered by the United Nations (UN), would primarily be used to acquire medical equipment as well as vaccines, medicines, and other supplies; strengthen the electric system; repair school infrastructure; and expand food programs.
However, the resources were not released due to administrative barriers imposed by the United States. US President Joe Biden has largely kept in place a strict sanctions program on Venezuela designed to secure regime change in the country. Washington maintains that its sanctions are aimed at “restoring democracy” in the Caribbean country. Meanwhile, Caracas considers these frozen assets to have been illegally seized by the US and its allies.
At issue was the potential seizure of the money by creditors and corporations who are attempting to claim Venezuelan assets held abroad in order to recover debts owed by Venezuela and state-owned oil company PDVSA. Corporations are already poised to seize US-based oil subsidiary CITGO through a US court-ordered auction process.
In May, the Biden administration notified the United Nations (UN) that the money could operate within the US financial system without the risk of creditors seizing it, with the US promising to provide special diplomatic protection to the money. That announcement, nonetheless, did not result in the release of the frozen funds.
The delay in the release also led to the suspension of negotiations between the government and the US-backed opposition opposition. However, with constitutionally mandated presidential elections coming in 2024, the White House appears motivated to take steps to restore confidence in the Mexico-based negotiation process.
White House official Juan González, Biden’s key Latin America advisor, has frequently tied sanctions relief to progress on conditions for “free and fair” elections.
“Our approach has been to support a negotiation process and make it very clear that we are going to lift sanctions based on concrete steps that give Venezuelans the opportunity to choose their leaders,” González recently told DW.
For its part, the Nicolás Maduro government has repeatedly demanded that Washington remove all economic sanctions imposed by the former Trump administration as part of its “maximum pressure” campaign in order to similarly allow for free and fair conditions ahead of the 2024 vote.
The US has thus far only offered piecemeal concessions, chiefly a limited license granted to oil corporation Chevron..
González reportedly held a secret meeting in June with Venezuelan National Assembly President Jorge Rodríguez, who is also the lead negotiator in talks between the government and the country’s opposition. Bloomberg reported in August that the Biden administration was in talks with Venezuela to explore temporary sanctions relief in exchange for a number of unspecified concessions regarding the upcoming elections.
The release of the US$ 3 billion fund is expected to jumpstart talks between the government and the opposition. Those negotiations are largely focused on securing an agreement concerning conditions of the upcoming vote and a commitment from both parties to respect the outcome. In recent years, right-wing sectors have opted to boycott electoral contests or promoted unsubstantiated “fraud” claims after losses.
The potential for a detente between Caracas and Washington led to an increase in Venezuelan government bond prices as investors perceive a diplomatic breakthrough that could result in an end to the US trading ban on Venezuela debt instruments.
The Venezuelan hardline opposition is currently in the midst of a self-organized primary process to select their presidential candidate for the 2024 election. Meanwhile, Venezuela’s National Assembly designated a new National Electoral Council that will oversee the upcoming presidential election following the surprise resignation of the previous board in June.
Edited by Ricardo Vaz in Caracas.