US approves opposition to selling Venezuela government

Venezuelan Vice President Delsey Rodriguez said on Wednesday (3) that the government will not approve any deal to sell Venezuela’s oil company Citco.

The reports come after the US Treasury Department’s Office of Foreign Assets Control (OFAC) issued licenses allowing Venezuelan opposition figures to represent the country in potential Venezuelan debt and bond negotiations.

Further, OFAC has pledged not to take action against “any person or entity” involved in the sale of Citco.

::What’s Happening in Venezuela::

The decision removed the last legal hurdle blocking the Venezuelan oil company, which has three refineries and a network of more than 5,000 gas stations in the United States.

“We are not going to authorize any negotiation, any type of payment agreement with any creditor that is not legally conducted by the Venezuelan government,” Rodriguez said.

Until then, Citco’s liquidation had been impossible because sanctions imposed by OFAC prevented foreign companies from trading in dollars with the Venezuelan government or state-owned companies. Under new guidance from the Treasury Department, Venezuela’s bond and debt lenders can deal directly with Venezuelan opposition, which does not represent a “violation” of US sanctions policy.

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OFAC justified the action by saying that Washington approves “officials” of the National Assembly elected in 2015. That’s because former Vice President Juan Guaido, who served as the “interim president” of the United States, had his “term” terminated by the opposition. This political branch unilaterally renewed its “mandates” in a kind of parallel parliament approved by the White House. Venezuela’s de facto National Assembly operates in the capital Caracas and is elected in 2021.

“[Os EUA] “They used these anti-political extremists in Venezuela to embarrass the Venezuelan people,” the vice president said.

Rodriguez also noted that OFAC’s decision “violates all the regulations governing international trade” and warned that the precedent could now apply to companies in other countries. “No country can be confident and sit back when it has an asset on American soil that, from one day to the next, can set up a plan with a criminal organization to steal that asset,” he said.

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The unfavorable move to Caracas comes a week after an international conference on dialogue in Venezuela was held in Bogotá, Colombia, at the initiative of President Gustavo Pedro’s government. According to the Colombian Foreign Ministry, the United States attended the meeting, which concluded with “common positions” on the end of the sanctions. However, Washington’s position was less flexible, as it insisted that relief from the blockade would come only after defining the electoral schedule for the next presidential election in Venezuela.

Due to the Venezuelan government’s reaction, OFAC’s decision last Monday (the 1st) should reduce the possibility of resuming dialogue in Mexico and further distance the parties involved.

Understand the case

Since 2019, CITCO has been controlled by the Venezuelan opposition, even after Quito lost his “mandate”. The sale of the company, which is owned by Venezuela’s state oil company PDVSA, was already approved in 2020 by Judge Leonard Stark of the Delaware state court, and is then subject to approval by OFAC.

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Canadian mining company Crystallex won another ruling in 2016 seeking compensation for expropriating a mine in Venezuela during the government of Hugo Chávez in 2008. According to the court, the loan will be US. $1.4 billion.

Other multinational companies with lawsuits against the Venezuelan government, such as Conoco Phillips and Koch Minerals, have already asked Judge Stark to link their lawsuits to the sale of Citco, whose stake is worth about US$10 billion.

Editing: Thales Schmidt