US to propose Venezuelan sanctions relief in return for free elections

To encourage democratic elections in Venezuela, US officials are drafting a proposal to ease oil sanctions against the country. If the measures are approved, President Biden may amend or replace executive orders issued by the Trump Administration in response to President Nicolás Maduro’s controversial 2018 reelection. However, the relief measures would depend on the regime’s cooperation with a free election.

According to a White House National Security Council source, “Should Venezuela take concrete actions toward restoring democracy, leading to free and fair elections, we are prepared to provide corresponding sanctions relief.”

Venezuelan National Assembly leader Dinorah Figuera rejected an earlier version of the proposal in July, saying the Maduro regime had not responded to calls for a return to democracy. 

The history of US sanctions against Venezuela

The US first implemented sanctions against Venezuela in 2006, citing then-leader Hugo Chavez’s lack of cooperation on terrorism and drug trafficking, and later expanded its range of concerns to human and civil rights abuses in 2014. These sanctions designated state officials, including Chavez’s successor Maduro and his close associates. It also limited financial transactions and placed controls on the oil and gold trade with Venezuela, two of the country’s major economic sectors. In 2018, after Maduro’s disputed reelection, the US imposed further sanctions.

In 2022, indicators suggested a slight thawing of relations: Maduro was reportedly willing to talk to his domestic opponents in return for some US sanctions relief. The Office of Foreign Assets Control (OFAC) then allowed Chevron, a major US oil firm, to engage with the Venezuelan state-owned oil company, PDVSA, but not to drill or export any petroleum of Venezuelan origin. 

Renewing oil trade to promote democracy

According to anonymous official sources, the new proposal would entail several measures, including:

• Reframing current sanctions, enabling more countries to import Venezuelan crude.
• Maintaining trade restrictions between Venezuela and Russia, China, and Iran.
• Requiring Venezuela to cooperate with several political stipulations, including a return to democracy.

Despite attempts to motivate political change, Venezuela’s progress toward democracy has been limited. On June 27, it barred opposition presidential candidate Maria Corina Machado from public office – and later announced a planned arrest warrant against exiled political opponent Antonio Ledezma. These are only the most recent of multiple similar acts.

The importance of reliable data: Key takeaways

If the proposed changes to Venezuelan sanctions are accepted, simpler regulations for firms are not necessarily guaranteed. Effective sanctions risk management may become more complex. More than ever, teams will need to ensure their understanding of sanctions requirements is nuanced and accurate.

Firms can start by reviewing their current sanctions data and the regularity with which its lists are updated – in minutes, hours, or days? Are they sourced directly from regulators? Are updates clear and checked for accuracy by analysts? Rapidly updated, accurate, and clear sanctions data can help firms ensure they stay across the latest measures, minimizing the risk of financial or reputational damage.