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US increases the pressure on Venezuela

Executive order by President Donald Trump blocks access to property and interests held by Venezuelan government in US jurisdictions

US President Donald Trump this week issued an executive order to block the property and interests of the Venezuelan government in the US, further ratcheting up pressure on the already embattled regime of Nicolas Maduro and adding to previously imposed sanctions.

The White House said the move will restrict entry into the US of people who are sanctioned or seek to undermine the government of self-declared leader Juan Guaido, who has drawn widespread backing from international governments but failed to dislodge Maduro's hold on power.

Guaido, who leads the national assembly, took on the title of interim president on the basis of a constitutional measure that allows a path to new elections if a presidential election is illegitimate, which his supporters contend to be the case for Maduro’s latest term.

“This executive order blocks all property and interests in property of the Government of Venezuela that are within the jurisdiction of the US,” the Trump administration said.

“It also authorises the Secretary of the Treasury, in consultation with the Secretary of State, to impose sanctions on persons who provide support to Nicolas Maduro and his illegitimate regime.”

The Trump administration has continued to denounce what it called “continued gross abuses of human rights and repression”, calling for a “return to democracy and the rule of law”.

Venezuela denounced the action, saying the move aimed to “formalise the criminal economic, financial and commercial blockade against Venezuelans... [its] objective is to force an unconstitutional change of government in the country”.

The latest measures come as Venezuela, despite having among the world's largest proven oil reserves, continues to face an ongoing crisis that includes hyperinflation, economic instability and acute shortages of electricity, food and medical supplies.

Venezuela's oil production has also been hard hit. The country was producing more than 3 million barrels per day in 2001, but in the wake of the Chavez and then Maduro regimes and the country's latest challenges, output had fallen to an estimated 830,000 bpd by April, according to the US Energy Information Administration.

While many countries around the world have joined the US in backing Guaido, Maduro has held on against the pressure, backed by a close cadre of military allies as well as support from Russia, China and Cuba.

According to Diego Moya-Ocampos, principal analyst at IHS Markit, the order extends previous sanctions, with the measures are set to increase regulatory burden and compliance costs for companies still active. There are exceptions for humanitarian aid.

“The sanctions are unlikely to force a government change (as the US intends) but will significantly curtail the Maduro administration's scope to trade externally and further restrict the government's operational capacities,” Moya-Ocampos said.

“The measures make it almost impossible for transnational companies to deal with the Maduro administration or operate in Venezuela unless they hold Office of Foreign Assets Control waivers giving licence to operate in areas unrelated to humanitarian aid,” the analyst added.

Moya-Ocampos predicts a “tough stance” in granting such waivers given the US policy goal of ramping up pressure on Maduro.

US companies still active in the country have included Chevron, which last month was given an extension of permission to continue operating even as many international companies have stalled or pulled out amid the complex situation.

Raul Gallegos, director at Control Risks, said on Twitter that the move was expected and should not be seen as a lessening of the high-pressure campaign.

“The US doesn’t want Russia/China to fully control (Venezuela’s) oil sector,” Gallegos said.

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