President Donald Trump signed an Executive Order imposing tough, new financial sanctions on the Venezuelan government of President Nicolas Maduro, including the issuance of debt and dealing in public sector bonds, the White House announced Friday.
The new sanctions are the first to target the country's economy rather than a previous series of punitive measures beginning under the Obama administration that targeted individuals in the Venezuelan government for their alleged role in corruption and violations of democratic rule.
"The U.S. financial system will not be complicit in any future placement of debt that will enable the Venezuelan government to finance ... its unconstitutional and undemocratic behavior," a senior U.S. official told reporters on a conference call.
Thenew sanctions prohibit dealings in new debt and equity issued by the government of Venezuela and its state oil company, the White House said in a statement . It also prohibits dealings in certain existing bonds owned by the Venezuelan public sector, as well as dividend payments to the government of Venezuela.
"These measures are carefully calibrated to deny the Maduro dictatorship a critical source of financing to maintain its illegitimate rule, protect the United States financial system from complicity in Venezuela’s corruption and in the impoverishment of the Venezuelan people, and allow for humanitarian assistance," the White House said.
To reduce harm to U.S. bond traders the Treasury Department will issue licenses allowing for a 30-day wind-down period; financing for most commercial trade, including the export and import of petroleum; dealings in select existing Venezuelan debts; and the financing for humanitarian goods to Venezuela, it added.
Venezuela denounced the latest sanctions, with its foreign minister saying the U.S was trying to provoke a humanitarian crisis. “These financial sanctions announced today are the worst aggressions to Venezuela in the last 200 years maybe ... Maybe after the Spanish empire was defeated by our liberators,” Foreign Minister Jorge Arreaza said at the United Nations in New York. “What do they want? They want to starve the Venezuelan people,” he added.
"The regime’s decision to create an illegitimate Constituent Assembly—and most recently to have that body usurp the powers of the democratically-elected National Assembly—represents a fundamental break in Venezuela’s legitimate constitutional order," the White House said.
The new sanctions target abuse of Venezuela financial system by the government to reward loyal officials, which experts says is pushing the oil-rich nation towards a massive debt default.
"Maduro’s economic mismanagement and rampant plundering of his nation’s assets have taken Venezuela ever closer to default. His officials are now resorting to opaque financing schemes and liquidating the country’s assets at fire sale prices," the White Hosue said.