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Cuban security personnel in Venezuela involved in providing security for Maduro and training Venezuela’s security forces in “torture tactics, domestic spying

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2019 that there were some 2,300 Cuban security personnel in Venezuela involved in providing security for Maduro and training Venezuela’s security forces in “torture tactics, domestic spying

techniques, and mechanisms of repression.”79 Over time, Cuban intelligence has helped its Venezuelan counterparts become particularly adept at detecting dissidents within the military.80

Among the other countries that support the Maduro regime, Turkey has purchased large quantities

of Venezuelan gold, despite U.S. sanctions.81 Iran has sent tankers of gasoline in exchange for

gold, despite U.S. sanctions on both countries; provided humanitarian aid; helped rebuild a

refinery; and established a supermarket conglomerate in Venezuela. 82 Iranian-Venezuelan fuel swaps have begun to occur more frequently. 83

U.S. Policy The United States historically had close relations with Venezuela, a major U.S. foreign oil

supplier, but friction in relations increased under the Chávez government and has intensified

under the Maduro government. For more than a decade, U.S. policymakers have had concerns

about the deterioration of human rights and democratic conditions in Venezuela and the lack of bilateral cooperation on counternarcotics and counterterrorism efforts. During this time, Congress

has provided funding to support democratic civil society in Venezuela. As the Maduro

government has become increasingly authoritarian, the Obama and Trump Administrations turned

to sanctions, first targeted on specific officials and then aimed at broader sectors of the economy, the Maduro government, and most recently, entities supporting that government.

U.S. policy has toughened since the U.S. government ceased to recognize Maduro as Venezuela’s

legitimate president in January 2019. After recognizing the Guaidó government in January 2019,

the Trump Administration coordinated most of its efforts with Interim President Guaidó. In early 2019, President Trump and other officials suggested that U.S. military intervention in Venezuela

was a possibility.84 After U.S. allies, including in the EU and the Lima Group, and Members of Congress expressed opposition to that prospect, such statements became less frequent.85

During the Trump Administration, U.S. strategy emphasized diplomatic efforts to bolster support

for Guaidó and isolate Maduro; targeted sanctions and visa revocations on Maduro government

officials and their families, along with broader sanctions on the economy and government;

assistance for the Venezuelan people; and actions to cut off the Maduro government’s illicit

79 U.S. Depart ment of St at e, Secret ary of St at e Michael R. P ompeo, “ Interview wit h Margaret Brennan of CBS Face

the Nation,” May 5, 2019; and U.S. Depart ment of St at e, Secret ary of St at e Michael R. P ompeo, “ Remarks t o t he

P ress,” March 11, 2019.

80 Angus Berwick, “ Special Report : How Cuba T aught Venezuela t o Quash Milit ary Dissent ,” Reut ers, August 22,

2019. 81 Mayela Armas and Corina P ons, “ Exclusive: Venezuela Removed Six T onnes of Cent ral Bank Gold at T urn of

Year—Sources,” Reut ers, March 12, 2020.

82 Ian T alley and Benoit Falcon, “ Iranian Milit ary-Owned Conglomerat e Set s Up Shop in Venezuela,” Wall Street

Journal, July 5, 2020. 83 Deisy Buit rago, Marianna P arraga, “ Exclusive: ‘P erfect T rips’ – Venezuela Ships Jet Fuel t o Iran in Exchange for

Gasoline, Sources say,” Reut ers, February 23, 2021.

84 T he Whit e House, “ Remarks by P resident T rump t o t he Venezuelan American Communit y ,” February 18, 2019

85 T hen-Secret ary of St at e Michael P ompeo denied any U.S. involvement in t he bot ched raid against Maduro in May

2020. See Karen DeYoung, Ant hony Faiola, and Alex Hort on. “ U.S. Denies Involvement in Alleged Venezuela

Invasion At t empt as Det ails Remain Murky,” Washington Post, May 6, 2020.

 

 

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revenue sources.86 In March 2020, the Administration issued a “democratic transition framework”

backed by Guaidó. The framework would have lifted certain sanctions in exchange for Maduro

releasing political prisoners, having foreign security forces leave the country, and allowing the

creation of a Council of State to carry out presidential duties until elections could be held. U.S.

insistence that Maduro leave office prior to the convening of new elections and reticence to bac k negotiations eventually drove a wedge between U.S. and EU positions on Venezuela.87

To date, U.S. efforts have failed to dislodge Maduro and enable the convening of free and fair

elections, raising questions for the Biden Administration on whether to intensify, roll back, or otherwise change U.S. policy. Secretary of State Antony Blinken has spoken with Interim

President Guaidó.88 Senior U.S. officials have said the Biden Administration aims to focus on

supporting the Venezuelan people and engaging in multilateral diplomacy to press for a return to

democracy and hold corrupt and abusive Maduro officials accountable for their actions. 89 On

March 8, 2021, the Biden Administration designated Venezuela for Temporary Protected Status (TPS) for 18 months (see “Temporary Protected Status for Venezuela,” below).90

Many analysts maintain that restoring a more unified position on Venezuela with allied European

and Latin American nations will be an important task for the Biden Administration.91 Biden officials are reviewing existing sanctions and reportedly are assessing whether the Maduro

government is willing to allow increased humanitarian access, the selection of a more balanced

electoral council, and a return to Norway-led talks.92 Some policy experts have urged the

Administration to offer sanctions relief in exchange for specific actions by the Maduro

government, such as the release of political prisoners. 93 In exchange for an openness to review

sectoral sanctions, the Administration could seek more targeted sanctions from other countries on Venezuelan officials and their families, asset forfeitures and indictments of Maduro officials and

enablers, and humanitarian assistance for U.N. appeals on Venezuela. 94 The Biden Administration

has rejoined the U.N. Human Rights Council, in part to keep its attention on abuses in countries

such as Venezuela.95 Some experts have urged Biden officials to work with the EU-led

International Contact Group in backing a negotiated s olution to the Venezuela crisis and to seek areas of “mutual interest” on Venezuela with China and Russia.96

86 U.S. Depart ment of St at e, “ U.S. Government Support for t he Democratic Aspirat ions of t he Venezuelan P eople,”

accessed August 17; 2020; and T est imony of Elliot t A. Abrams, Special Represent at ive for Venezuela, U.S.

Depart ment of St at e, in U.S. Congress, Senat e Commit t ee on Fo reign Relat ions, August 4, 2020.

87 Elliot t Abrams, “ T he EU T ries and Fails Again on Venezuela,” Foreign Policy, February 3, 2021. 88 U.S. Depart ment of St at e, Office of t he Spokesperson, “ Secret ary Blinken’s Call wit h Venezuelan Int erim P resident

Guaidó,” March 2, 2021.

89 Whit e House, “ Background P ress Call by Senior Administ rat ion Off icials on Venezuela,” March 8, 2021.

90 U.S. Depart ment of Homeland Securit y (DHS), “ Secret ary Mayorkas Designat es Venezuela for T emporary P rotected

St at us for 18 Mont hs,” March 8, 2021. 91 P aul Angelo, Synchronizing with Europe on the Venezuela Crisis, Council on Foreign Relat ions, Sept ember 28,

2020.

92 Joshua Goodman, “ US Weighs P olicy on Venezuela as Maduro Signals Flexibilit y,” AP . April 27, 2021. 93 Christ opher Sabat ini, “ Can Biden Succeed Where T rump’s Venezuela P olicy Failed? World Politics Review, January

27, 2021.

94 Ryan C. Berg and Jorge González-Gallarza, Europe’s Last Chance: How the EU Can (and Should) Become the

Prim ary Actor in Venezuela’s Dem ocratic Restoration, American Ent erprise Inst it ut e, March 2021.

95 U.S. Depart ment of St at e, Office of t he Spokesperson, “ Key Out comes at t he 46 th Session of t he U.N. Human Right s

Council,” March 23, 2021. 96 Geoff Ramsey and David Smilde, Recalibrating U.S. Policy in Venezuela: Learning from Failure and Seizing

Opportunities, Washingt on Office on Lat in America, December 2020.

 

 

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The 116th Congress supported the Trump Administration’s efforts to promote a restoration of

democracy in Venezuela without the use of military force and to provide humanitarian assistance

to Venezuelans. Some Members expressed concerns about the humanitarian impact of broad U.S.

economic sanctions. Congress enacted legislation to guide U.S. policy on Venezuela, including

P.L. 116-94, which appropriated $30 million in FY2020 for democracy programs in Venezuela

and incorporated the Senate-reported version of the VERDAD Act (S. 1025), a comprehensive bill to address the crisis in Venezuela (see Appendix A). Congress appropriated not less than $33

million for democracy programs in Venezuela and an unspecified amount of humanitarian support

for countries sheltering Venezuelan refugees. Congress also conducted numerous oversight hearings on U.S. policy toward Venezuela.

The 117th Congress is likely to provide input to the Biden Administration in sanctioning human

rights abuses, corruption, and antidemocratic actions by the Maduro government and its backers,

as well as how to balance sectoral sanctions with humanitarian concerns. Congress may examine

new policy approaches by the Biden Administration and further legislative options, such as additional sanctions against the Maduro government and its foreign enablers or humanitarian assistance to Venezuelans.

U.S. Sanctions on Venezuela97

The United States has increasingly employed sanctions as a policy tool in response to activities of

the Venezuelan government and Venezuelan individuals. As the political and economic crisis in

Venezuela has deepened, the Trump Administration significantly expanded sanctions on

Venezuela, relying on both existing authorities and new executive orders. Beginning in August 2017, those executive orders established financial sanctions on the Maduro government

(including PdVSA), created economic sanctions on sectors of the economy, and prohibited

unlicensed transactions with the Maduro government. The Trump Administration cited the

Maduro government’s human rights abuses, usurpation of power from the National Assembly, and rampant corruption as reasons for expanding U.S. sanctions .

 Visa Revocations and Sanctions on Individuals. Since January 2019, the State Department has revoked more than 1,000 visas, including those of current and former Venezuelan officials and their families. 98 The Treasury Department has

imposed financial sanctions on a total of nearly 150 Venezuela-linked individuals

for terrorism (E.O. 13224); drug trafficking (Foreign Narcotics Kingpin

Designation Act, P.L. 106-120, Title VIII; 21 U.S.C. 1901 et seq.); and/or

committing antidemocratic actions, human rights violations, or corruption (see

E.O. 13692 in 2014 as codified in P.L. 113-278 and extended in P.L. 114-194 and,

most recently, in P.L. 116-94).

 Financial sanctions restricting Maduro government and state oil company, PdVSA, access to U.S. financial markets, with certain exceptions to minimize the

impact on the Venezuelan people and U.S. economic interests (E.O. 13808 in August 2017);99 prohibiting transactions using cryptocurrency (E.O. 13827 in

March 2018);100 and barring the purchase of Venezuelan debt or accounts

97 For more informat ion, see CRS In Focus IF10715, Venezuela: Overview of U.S. Sanctions, by Clare Ribando Seelke.

98 U.S. Congress, Senat e Commit t ee on Foreign Relat ions, Venezuela, 116th Cong., 2nd sess., August 4, 2020.

99 E.O. 13808, “ Imposing Addit ional Sanct ions wit h Respect t o t he Sit uat ion in Venezuela,” 82 Federal Register

41155-41156, August 24, 2017. 100 E.O. 13827, “ T aking Addit ional St eps t o Address t he Sit uat ion in Venezuela, ” 83 Federal Register 12469-12470,

 

 

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receivable with the Venezuelan government, including PdVSA (E.O. 13835 in

May 2018).101

 Sectoral sanctions blocking assets and prohibiting unlicensed transactions with PdVSA, Venezuela’s central bank, and the state gold mining company, among

other entities (E.O. 13850 in November 2018).102

 Sanctions on the Maduro government blocking assets in the United States and prohibiting transactions with that government unless authorized as part of efforts

to aid the Venezuelan people. E.O. 13884 also authorized financial sanctions and visa restrictions on non-U.S. persons who assist or support the Maduro

government. To allow continued humanitarian assistance, OFAC issued licenses

authorizing transactions involving the delivery of food, agricultural commodities,

and medicine; personal remittances; the work of international organizations; and

communications services (E.O. 13884 in August 2019).103

The U.S. government has coordinated its targeted sanctions policies with the EU and Canada. The

Rio Treaty has become the means for U.S. efforts to build capacity and will in Latin America and

the Caribbean to sanction Maduro officials. 104 The Trump Administration demonstrated some flexibility in its sanctions policy with the lifting of sanctions against the former head of

Venezuela’s intelligence service, General Manuel Cristopher Figuera, in May 2019 after he broke

ranks with Maduro. Many have questioned how willing or able the U.S. government would be to lift sanctions on others, particularly for those who face U.S. criminal indictments .

Since 2017, the Trump Administration has significantly ratcheted up economic pressure on

Venezuela and on Cuba for its support of Venezuela.105 In 2020, the Department of the Treasury

imposed sanctions on two subsidiaries of Rosneft, Russia’s state-controlled oil and gas company,

for transporting Venezuelan oil and on a Chinese technology company for supplying the Maduro government with digital surveillance software. Treasury also has sanctioned individuals and

entities for shipping petroleum products to Venezuela in exchange for gold under the Iran sanctions framework.

It is difficult to attribute precisely the extent of Venezuela’s economic collapse that is due to U.S.

sanctions versus broad economic mismanagement. A February 2021 Government Accountability

Office (GAO) report asserted that “sanctions, particularly on the state oil company in 2019, likely

contributed to the steeper decline of the Venezuelan economy.”106 The Maduro government has defaulted on all its bonds, and U.S. sanctions prohibit debt restructuring with creditors.

March 19, 2018.

101 E.O. 13835, “ P rohibit ing Cert ain Addit ional T ransact ions wit h Respect t o Venezuela,” 83 Federal Register 24001-

24002, May 21, 2018. 102 E.O. 13850, “ Blocking P roperty of Addit ional P ersons Cont ribut ing t o t he Sit uat ion in Venezuela,” 83 Federal

Register 55243-55245, November 1, 2018.

103 Execut ive Order 13884, “ Blocking P ropert y of t he Government of Venezuela,” 84 Federal Register 38843- August

5, 2020. 104 U.S. Depart ment of St at e, Report on Developing and Im plementing a Coordinated Sanctions Strategy with Partners

in the Western Hem isphere and the European Union, February 24, 2020.

105 See CRS Report R45657, Cuba: U.S. Policy in the 11 6th Congress and Through the Trum p Adm inistration , by

Mark P . Sullivan.

106 Government Account abilit y Office (GAO), Venezuela: Additional Tracking Could Aid Treasury’s Efforts to

Mitigate Any Adverse Im pacts U.S. Sanctions Might Have on Hum anitarian Assistance, GAO 21-239, February 2021

(hereinaft er, GAO 21-239).

 

 

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In terms of the sanctions’ political effects, the imposition of targeted sanctions on individuals in

the Maduro government has not encouraged many of those who were not yet sanctioned to

abandon Maduro or changed the behavior of the sanctioned individuals. Broader U.S. sanctions

adopted since 2017 have yet to compel Maduro to leave office. They also have provided a scapegoat on which Maduro has blamed the country’s economic problems.

U.N. officials and some Members of Congress urged the Trump Administration to ease financial

and sectoral sanctions on Venezuela, even if Maduro remained in office, so the country could

address COVID-19.107 The Administration continued to impose sanctions during the pandemic and maintained that U.S. sanctions on Venezuela included broad exemptions and licenses to allow

the provision of humanitarian assistance and the export of food, medicine, and medical devices.108

Humanitarian organizations receiving U.S. funds told the GAO that sanctions had made financial

transactions more challenging even for those with exemptions and licenses and likely had

exacerbated fuel shortages and power outages in the country.109 Some in Congress have asked the

Biden Administration to restart a sanctions exemption that had allowed foreign companies to swap diesel for Venezuelan crude oil, which ended in November 2020.110

Petroleum Sector Concerns and U.S. Economic Sanctions

Commercial oil production in Venezuela began in 1914 and accelerated in the 1920s, following

oil discoveries in Venezuela’s Maracaibo Basin.111 Several U.S. companies established

concession agreements with Venezuela’s government to invest in, explore, produce, and export

the country’s petroleum resources. By 1970, oil production in Venezuela was more than 3.7

million barrels per day, making Venezuela one of the largest oil-producing countries by volume.112 Venezuela began to take control of its petroleum assets in 1971, fully nationalizing the

sector in 1976 with the creation of PdVSA to manage the country’s petroleum resources. Oil companies operating in Venezuela were relegated to a service-based support role.

Oil production in Venezuela declined by more than 50% between 1971 and 1988.113 In an effort to

reverse declining oil production, Venezuela embarked on a program that allowed international oil

companies—including U.S. firms Chevron, Exxon, and Conoco—to either control oil fields or

establish majority-owned joint ventures (JVs) with PdVSA. 114 Policies imposed by former

President Chavez unilaterally modified contract terms contained in the production and JV

107 UN News, “ Ease Sanct ions Against Count ries Fight ing COVID-19: UN Human Right s Chief,” March 24, 2020;

Cynt hia Arnson and Oriana van P raag, “ Venezuela and t he Coronavirus: Anot her P at h Is P o ssible,” Am ericas

Quarterly, March 30, 2020; and Jack Diet ch, “ Democrat s P ush Back on Sanct ions, Cit ing Coronavirus Fears,” Foreign

Policy, March 27, 2020.

108 Office of Foreign Asset s Cont rol (OFAC), U.S. Depart ment of t he Treasury, “ Fact Sheet : P rovision of Humanit arian

Assist ance and T rade t o Combat COVID-19,” April 16, 2020; and U.S. Depart ment of t he T reasury, OFAC, “ Guidance

Relat ed t o t he P rovision of Humanit arian Assist ance and Support t o t he Venezuelan P eople,” August 6, 2017. 109 GAO 21-239.

110 Let t er from Senat or Chris Murphy t o Secret ary of St at e Ant ony Blinken, March 23, 2021.

111 Daniel Yergin, The Prize: The Epic Quest for Oil, Money, & Power (New York: Simon & Schust er, 1991), p. 217-

219. 112 BP , Statistical Review of World Energy, 2020.

113 Ibid.

114 For a complet e list of P dVSA JV part ners, see Energy Informat ion Administ rat ion, Background Reference:

Venezuela, T able 1, January 7, 2019, available at ht t ps://www.eia.gov/int ernat ional/cont ent /analysis/count ries_long/

Venezuela/venezuela_bkgd.pdf.

 

 

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agreements. Some companies (e.g., Exxon, Conoco) ceased operations and filed lawsuits for contractual violations. Other companies (e.g., Chevron) continued operating in Venezuela.

A founding member of the Organization of the Petroleum Exporting Countries (OPEC), Venezuela generally has been considered a major oil producer and supplier. However, as of

February 2021, oil production in Venezuela was approximately 500,000 barrels per day—less

than 1% of global petroleum supply and one of the lowest volumes among OPEC members. 115

Nevertheless, Venezuela’s petroleum sector, which includes the world’s largest proven oil

reserves at more than 300 billion barrels (more than 17% of global reserves), is a critical element of the country’s economy.116 During calendar year 2019, the value of Venezuela’s petroleum

exports represented more than 95% of the country’s total exports.117 Oil’s predominant role in

Venezuela’s economy, combined with the United States having been a preferred oil export destination, resulted in this sector being a target of U.S. economic sanctions.

Oil Sector Sanctions and Evolving Petr oleum Tr ade Relationships

Sanctions targeting Venezuela’s oil sector generally began in August 2017, with the issuance of

an executive order that limited access to debt capital and prevented PdVSA from receiving cash

distributions from Citgo, its U.S.-based oil refining and marketing subsidiary. 118 Oil sector

sanctions expanded in January 2019, with PdVSA added to Treasury’s Specially Designated

Nationals list.119 This action effectively prohibited U.S. persons and companies from transacting

with PdVSA, unless Treasury allows transactions under a general license.120 The sanctions framework also prohibited non-U.S. entities from transac ting with PdVSA in U.S. dollars and

made non-U.S. subject to having their U.S. property blocked, should it be determined that they materially assisted PdVSA.121

Following an authorized 90-day wind-down period, U.S. oil refineries ceased importing crude oil

from Venezuela (see Figure 4). Under the sanctions framework, Treasury also has sanctioned

numerous individuals, vessels, and companies involved in trading and shipping Venezuelan oil.

This progressive application of sanctions—designed to prevent export and sale of oil produced in

Venezuela—has made it more difficult, though not impossible, for PdVSA to complete petroleum sales and export transactions.

115 Energy Informat ion Administ ration, Crude Oil Production, Venezuela, Monthly, at ht t ps://www.eia.gov/opendat a/

qb.php?cat egory=1039874&sdid=ST EO.COP R_VE.M, accessed April 9, 2021. 116 BP , Statistical Review of World Energy, 2020.

117 Organizat ion of t he P et roleum Exporting Count ries (OP EC), Venezuela Facts and Figures, at ht t ps://www.opec.org/

opec_web/en/about _us/171.ht m, accessed March 29, 2021.

118 E.O. 13808, “ Imposing Addit ional Sanct ions Wit h Respect t o t he Sit uat ion in Venezuela,” 82 Federal Register

41155, August 29, 2017. 119 T reasury’s designat ion was pursuant t o E.O. 13850. For addit ional informat ion, see U.S. Depart ment of t he

T reasury, “ Issuance of a New Venezuela-relat ed Execut ive Order and General Licenses; Venezuela-relat ed

Designat ion,” January 28, 2019.

120 T o dat e, T reasury global licenses permit Chevron and some oilfield service companies t o cont inue limit ed act ivit ies

and t ransact ions in wit h P dVSA for essent ial operat ions. 121 For addit ional informat ion about U.S. economic sanct io ns t arget ing Venezuela’s oil sect or, see CRS Report R46213,

Oil Market Effects from U.S. Econom ic Sanctions: Iran, Russia, Venezuela , by P hillip Brown

 

 

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Figure 4. Venezuela Crude Oil Production, U.S. Imports, and

Selected Sanction Events

(January 2014-February 2021)

Source: CRS, using Venezuela crude oil production data from Bloomberg L.P. U.S. imports data from the Energy

Information Administration.

Notes: PdVSA = Petroleos de Venezuela S.A.; E.O. = executive order; bpd = barrels per day.

E.O. 13808 imposed additional sanctions based on a national emergency declared in March 2015 (E.O. 13692),

including limits imposed on PdVSA access to U.S. debt finance an d a provision preventing PdVSA from receiving

cash dividends from its U.S.-based Citgo refining and marketing subsidiary.

With the United States no longer a petroleum export destination, PdVSA sought to develop other

trading relationships to monetize the value of Venezuelan oil. Russian oil trading companies (i.e.,

Rosneft Trading and TNK Trading International) were large purchasers of Venezuelan oil, which

they mostly delivered to refineries in Asia. Treasury sanctioned these companies in early 2020.

This action motivated Rosneft—an oil company controlled by the Russian government—to reorganize its corporate ownership structure and operations in Venezuela to minimize its sanctions exposure risk.

PdVSA has since employed other methods to facilitate oil transactions, including (1) oil sales through a Mexico-based trading company claiming to execute an oil-for-humanitarian-aid

program; (2) oil-for-diesel fuel swap trades—authorized by Treasury until late October 2020—

with refiners located in India and Spain; (3) sales transactions through intermediate oil trading

companies; and (4) petroleum exchanges with Iran. Iran—also the target of numerous U.S.

economic sanctions—has supplied Venezuela with multiple shipments of petroleum products (e.g., gasoline) following the imposition of sanctions on Venezuela’s oil sector. Since January

2019, when exports to the United States ended, India and China have been the top two destinations for Venezuela’s observable crude oil exports (see Figure 5).

 

 

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Figure 5. Observable Venezuela Crude Oil Exports by Destination

(January 2017-February 2021)

Source: CRS, using Bloomberg L.P. tanker tracking service data.

Notes: Export volumes represent crude oil volumes that were loaded onto tankers during each month .

Other research companies and news media organizations report higher export volumes than those reflected in

this figure. Oil exporting countries subject to U.S. economic sanctions employ various methods (i.e., ship -to-ship

transfers and disabling transponders) to conceal export volumes and destinations. Actual Venezuela crude oil

export volumes could differ from those reported by Bloomberg L.P.

Oil Mar ket and Pr ice Effects122

Notable sanctions-related effects on the global oil market include lower Venezuelan oil

production and the elimination of U.S. imports of Venezuelan crude oil (see Figure 4). Attributing a precise volumetric effect on Venezuela’s oil production is difficult, as production in

the country was declining prior to the imposition of oil sector sanctions. 123 Nevertheless, data

suggest that production declines accelerated following sanctions targeting Venezuela’s oil sector.

Lower global oil supply generally results in upward price pressure for crude oil and petroleum

products. Venezuela’s oil production decline of approximately 1.5 million bpd (August 2017 to

February 2021) is large enough to potentially affect prices. However, numerous factors (e.g., demand/supply balances, OPEC production decisions, and general economic conditions) can

influence oil and petroleum product prices. As a result, it is difficult to quantify effects on crude oil and petroleum product (e.g., gasoline) prices directly attributable to U.S. economic sanctions.

Changes to U.S. refinery imports of Venezuelan crude oil are quantifiable. Prior to the start of oil

sector sanctions, U.S. refineries imported between 500,000 and 700,000 barrels per day of crude

oil from Venezuela. Crude oil imports from Venezuela ended in April 2019. Refineries that

previously purchased crude oil from PdVSA were required to source alternative crude oils from

122 For addit ional informat ion about how sanct ions aff ect oil market s and prices, see CRS Report R46213, Oil Market

Effects from U.S. Econom ic Sanctions: Iran, Russia, Venezuela , by P hillip Brown.

123 For addit ional informat ion about t he impact of U.S. sanct ions on t he Venezuelan economy, see Government

Account abilit y Office, Venezuela: Additional Tracking Could Aid Treasury’s Efforts to Mitigate Any Adverse Im pacts

U.S. Sanctions Might Have on Hum anitarian Assistance, February 2021.

 

 

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other suppliers. As the market adjusted to this sanctions -related supply constraint, elevated

regional spot prices—relative to other crude oil prices—indicated that substitute crude oils were temporarily in short supply.124

Petr oleum Sector Outlook

With proven oil resources and well-known geology, oil production in Venezuela could return to, or possibly exceed, pre-sanctions levels of approximately 2 million bpd. However, the condition

of Venezuela’s petroleum assets (e.g., oil reservoirs, upgrading facilities, pipelines, refineries, and

ports) could present challenges for a complete sector recovery. 125 President Maduro aims to

increase oil production to 1.5 million barrels per day with “new production, financing and

marketing mechanisms,” according to a PdVSA announcement. 126 Details of Maduro’s plan are

limited, though the plan may allow oil companies more control over production activities. In March 2021, Venezuela announced agreements with Russia to cooperate in several areas,

including the oil sector.127 However, International Energy Agency forecasts—assuming that

Maduro remains in power and U.S. sanctions continue—indicate that oil production may remain

near 500,000 bpd until 2026.128 Continuation and enforcement of U.S. sanctions could affect the

sector’s future. Additionally, investment capital, technical expertise, and human resources may be needed to support sector restoration.

Temporary Protected Status for Venezuela129

The 116th Congress considered legislation that would have designated Venezuela for TPS. In July

2019, the House passed H.R. 549, which would have allowed certain Venezuelan nationals

residing in the United States to qualify for TPS, which would have prevented their removal from

the United States and allowed them to obtain employment and travel authorization. In July 2020,

a Senate effort to pass H.R. 549 by unanimous consent failed. The Trump Administration did not formally support TPS for Venezuelans, though Trump Administration officials asserted that

Venezuelans were not being subject to removal. 130 On January 19, 2021, President Trump granted

Deferred Enforced Departure to Venezuelans in the United States for 18 months, protecting them from removal and making them eligible to apply for work authorization. 131

124 For addit ional informat ion about price different ials, see ht t ps://www.crs.gov/Report s/R46213#_T oc31964656

125 For addit ional informat ion about Venezuela’s oil sect or, see Hernandez, I. & Monaldi, F., 2016. Weathering

Collapse: An Assessm ent of the Financial and Operational Situation of the Venezuelan Oil Industry .

126 P dVSA, “ P resident e Maduro: t enemos la met a de producir 1 millón 500 mil barriles diarios,” January 15, 2021. 127 P dVSA, “ Rusia y Venezuela suscriben inst rument os jurídicos para fort alecer cooperación est rat égica,” March 31,

2021.

128 Int ernat ional Energy Agency, Oil 2021: Analysis and Forecast to 2026 , March 2021.

129 Congress creat ed T emporary P rotected St at us (T P S) in 1990 ( P .L. 101-649) t o provide work aut horizat ion and relief

from removal for foreign nat ionals in t he Unit ed St at es from count ries experiencing armed conflict , nat ural disast er, or

ot her ext raordinary conditions t hat prevent t heir safe ret urn. H.R. 549 would have added Venezuela t o t he list of

count ries designat ed for T P S. T his designat ion would have last ed for 18 mont hs and could have been ext ended by t he Secret ary of Homeland Securit y. Venezuelans who had been cont inuously present in t he Unit ed St at es since t he dat e of

enact ment and who met cert ain ot her requirement s would have been eligible t o apply for T P S. See CRS Report

RS20844, Tem porary Protected Status and Deferred Enforced Departure, by Jill H. Wilson.

130 U.S. Congress, Senat e Commit t ee on Foreign Relat ions, Venezuela, 116th Cong., 2nd sess., August 4, 2020.

131 Whit e House (P resident T rump), Office of t he P ress Secret ary, “ Deferred Enforced Depart ure for Cert ain

Venezuelans,” president ial memorandum for t he Secret ary of St at e and t he Secret ary of Homeland Securit y, January

19, 2021.

 

 

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On March 8, 2021, Homeland Security Secretary Alejandro Mayorkas designated Venezuela for

TPS for a period of 18 months on the basis of extraordinary and temporary conditions. 132 In the

March 2021 Federal Register notice announcing a new TPS designation for Venezuela, Secretary

Mayorkas cited many of those conditions, including “economic contraction; inflation and

hyperinflation; deepening poverty; high levels of unemployment; reduced access to and shortages

of food and medicine,… among many others.”133 U.S. Citizenship and Immigration Services estimates that approximately 323,000 individuals are eligible to file applications for TPS under the designation of Venezuela.134

U.S. Assistance

Humanitarian Assistance (Including COVID-19 Assistance)135

Since FY2017, the U.S. government has provided more than $1 billion in humanitarian and

emergency food assistance in response to the Venezuela regional crisis (as of December 2020).136

For FY2020, this included $528.5 million to support Venezuelan refugees and migrants who fled

to other countries (or for the communities hosting them) and $94.3 million for humanitarian relief

activities inside Venezuela.137 The U.S. military has twice deployed a naval hospital ship on medical support deployments. In addition, as of December 2020, the United States had provided

nearly $13.7 million for the COVID-19 response in Venezuela and $33.6 million for COVID-19

in the region. U.S. officials and Members of Congress have praised the April 2021 agreement allowing WFP to establish a humanitarian presence inside Venezuela.138

In keeping with international humanitarian standards, U.S. humanitarian assistance is generally

provided on the basis of need and according to principles of universality, impartiality, and

independence.139 However, a recent USAID Office of Inspector General report assesses some of

the challenges USAID faces in responding to the Venezuela regional crisis, identifies areas of fraud risk in the humanitarian response, and makes recommendations to strengthen and improve USAID’s approach.140

132 See Immigrat ion and Nat ionalit y Act , §24 4(b)(1)(C).

133 DHS, “ Designat ion of Venezuela for T emporary P rotected St at us and Implement at ion of Employment Aut horization

for Venezuelans Covered by Deferred Enforced Depart ure,” 86 Federal Register 13574-13581, March 9, 2021.

134 Ibid. 135 Writ t en by Rhoda Margesson, Specialist in Int ernat ional Humanit arian P olicy.

136 As wit h int ernat ional humanitarian st andards, U.S. humanit arian assist ance is provided on t he basis of need and

according t o principles of universalit y, impart ialit y, and indep endence.

137 USAID, “ Venezuela Regional Crisis,” fact sheet #2, March 25, 2021. 138 USAID, “ USAID Welcomes Agreement Allowing t he U.N. World Food P rogram t o P rovide Food Assist ance in

Venezuela,” April 29, 2021; Senat e Foreign Relat ions Commit t ee, “ Chairman Me nendez on WFP Agreement t o Begin

Operat ing in Venezuela,” April 20, 2021.

139 USAID, Office of Foreign Disast er Assist ance, Policy for Hum anitarian Action , Oct ober 2015. In February 2019, at

t he request of Int erim P resident Guiadó, t he U.S. government pre -positioned assist ance (food, healt h, hygiene, and

nut rit ion commodit ies) for t he Venezuelan people on t he Colombia – and Brazil-Venezuela borders. Securit y forces

loyal t o Maduro prevent ed t he delivery of t he h umanit arian assist ance. A broad range of humanit arian organizat ions,

including U.N. ent it ies, expressed concern not just about t he many logist ical and securit y problems in delivering

assist ance t o Venezuela but also about t he prospect of humanit arian aid being used as a t ool in a polit ical cont est . 140 USAID, Office of Inspect or General, Enhanced Processes and Im plem enter Requirem ents Are Needed to Address

Challenges and Fraud Risks in USAID’s Venezuela Response , Audit Report 9-000-21-005-P , April 16, 2021.

 

 

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Democr acy, Development, and Global Health-Related Assistance

For more almost two decades, the United States has provided democracy-related assistance to

Venezuelan civil society through the U.S. Agency for International Development (USAID) and the National Endowment for Democracy (NED).

From FY2002 to FY2010, USAID supported small-grant and technical assistance activities

through its Office of Transition Initiatives to provide assistance monitoring democratic stability

and strengthening the county’s democratic institutions. USAID’s Latin America and Caribbean

Bureau assumed control over those programs in FY2010. Since FY2010, USAID democracy programs in Venezuela have been funded primarily through the Economic Support Fund (ESF)

account. U.S. democracy and human rights assistance appropriated to Venezuela amounted to $30 million in FY2020 (P.L. 116-94) and at least $33 million in FY2021 (P.L. 116-260).

Table 1. U.S. Foreign Assistance to Venezuela by Account: FY2017-FY2021

(appropriations in millions of current U.S. dollars)

Account FY2017a

FY2018

(estimate)a

FY2019

(estimate)

FY2020

(estimate)

FY2021

(estimate) Total

DA 9.0 93.1 0.0 0.0 0.0 102.1

ESF 7.0 19.0 18.0 30.0 33.0 74.0

ESDF 0.0 0.0 0.0 0.0 0.0 0.0

GHP

(USAID)

0.0 16.3 5.0 0.0 0.0 21.3

DF 0.0 4.0 0.0 0.0 0.0 4.0

Total 16.0a 132.4a 23.0ab 30.0a 33.0 234.4

Sources: U.S. Department of State, Congressional Budget Justifications for Foreign Operations, FY2017-FY2021; P.L.

116-260; U.S. Agency for International Development (USAID), Congressional Notification (CN) #16, December

11, 2017; CN# 34, January 12, 2018; CN# 23, January 28, 2019; CN# 125, May 14, 2019; CN #156, July 11,

2019; CN#157, July 11, 2019; CN #219, September 5, 2019; CN #224, September 9, 2019; CN #229,

September 11, 2019; CN #233, September 11, 2019; CN #243, August 9, 2019; CN #20, February 28, 2020; CN

#165, April 24, 2020; CN $259, August 6, 2020.

Notes: DA = Development Assistance; DF = Democracy Fund; ESF = Economic Support Fund; ESDF =

Economic Support and Development Fund; GHP = Global Health Programs.

a. These totals do not include economic and development assistance funds that have been provided to support

countries that are sheltering Venezuelan refugees and migrants.

b. This total includes $450,000 in ESF notified on August 6, 2020 , to combat illegally armed groups in

Venezuela.

USAID signed a bilateral agreement with the Guaidó government in October 2019 to expand its

democracy and human rights-related programs in Venezuela and to start new health and

agriculture programs. This expansion in programming supported the interim government’s goals

to facilitate a transition to democracy and to start rebuilding key sectors damaged by the

economic crisis. Although most of the assistance supported programs in Venezuela, some also funded work-related travel, salaries, and secure communications systems for interim government

officials and staff. In addition to the democracy-related ESF assistance appropriated by Congress,

the Administration reprogrammed additional Development Assistance, Global Health Program,

and Democracy Fund assistance (see Table 1). The funding is being administered primarily

through third-party contractors. Should a political transition occur, the State Department and USAID have developed plans to support the interim government’s transition plan, Plan País.

 

 

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For FY2021, the Administration requested $5 million in global health assistance for Venezuela

and $200 million to support a democratic transition in Venezuela, as well as humanitarian

assistance for Venezuelans who have fled and the communities hosting them. The Consolidated

Appropriations Act, 2021 (P.L. 116-260), provided not less than $33 million in ESF assistance for

democracy programs in Venezuela and an unspecified level of humanitarian support for countries sheltering Venezuelan refugees.

The NED has funded democracy projects in Venezuela since 1992. U.S. funding for the NED is

provided in the annual State Department and Foreign Operations appropriations measure, but country allocations for the NED are not specified in the legislation. In 2019, the NED funded 41 projects in Venezuela totaling more than $2.5 million.

U.S. Efforts to Combat Illicit Revenue Sources

While financial sanctions have sought to limit Maduro’s licit revenue sources and punish those

who have stolen billions from PdVSA and government programs, c riminal investigations and antidrug operations have targeted illicit revenue earned by the Maduro government.

Venezuela is ranked among the most corrupt countries in the world. In 2020, Venezuela ranked

176th out of 180 countries covered in Transparency International’s Corruption Perceptions Index.

High-level officials, many from the military, reportedly formed a drug trafficking organization

(the Cartel of the Suns) in the early 2000s and have engaged in crimes such as illegal gold mining, weapons trafficking, and money laundering. 141 These criminal networks have linkages to

foreign terrorist organizations such as the FARC and the National Liberation Army (ELN). The

Maduro government allegedly also has ties to Hezbollah through various intermediaries (see “U.S. Concerns About Terrorism”).142

U.S. Indictment of Top Venezuelan Officials

On March 26, 2020, then-Attorney General William Barr announced the indictment of Venezuela’s leader, Nicolás

Maduro, and 14 other current and former high-ranking Venezuelan officials. As charged, Maduro allegedly

participated in the Cartel of the Suns drug trafficking organization in conspiracy with the Colombian terrorist

organization the Revolutionary Armed Forces of Colombia (FARC) to produce and traffic illicit drugs to the

United States. Some 12 of the 18 individuals also are subject to U.S. sanctions (related to the situation in

Venezuela, narcotics trafficking, or both). In addition to narcoterrorism conspiracy, the charges include drug

trafficking, money laundering, and weapons charges. The State Department is offering a total of up to $55 million

for information leading to the arrest, conviction, or both of five of these individuals (including Maduro) .

Venezuela’s instability, weak institutions, extensive 1,370-mile border with Colombia, and

general lawlessness have attracted the attention of illegally armed groups. The ELN, which is still engaged in armed conflict in Colombia, and its rival, the Popular Liberation Army (ELP),

reportedly recruit Venezuelans to cultivate coca, the plant component of cocaine. 143 The ELN has

taken over much of Guajira state.144 The Rastrojos, a criminal group of former Colombian

paramilitaries, reportedly controls important gasoline smuggling routes between Venezuela and

141 A May 2018 report by Insight Crime ident ified more t han 120 high-level Venezuelan officials who have engaged in

criminal act ivit y. Insight Crime, Venezuela: A Mafia State? May 2018. 142 “ Cape Verde Court Approves US Ext radit ion of Maduro Financier for Money Laundering,” Jurist, August 6, 2020.

143 Helen Murphy and Luis Jaime Acost a, “ Exclusive: Colombian Armed Groups Recruit ing Desperat e Venezuelans,

Army Says,” Reut ers, June 20, 2019.

144 Anat oly Kurmanaev, “ T errorist Group St eps int o Venezuela as Lawlessness Grows,” New York Tim es, April 26,

2021.

 

 

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Colombia. A February 2020 International Crisis Group study maintains that both FARC dissidents

and ELN fighters are heavily involved in illegal gold mining. 145 Violence among these groups has

escalated in recent years. In March 2021, Venezuelan security forces launched an operation,

which analysts maintain was intended to attack a dissident FARC faction that may have violated a

drug trafficking arrangement, in Apure (see Figure 1). The forces reportedly committed human

rights abuses against civilians as ongoing clashes prompted thousands to flee into Arauca, Colombia. Those clashes also may have resulted in soldiers’ deaths.146

Counter narcotics and U.S. Antidrug Pr osecutions and Oper ations

Venezuela is a major transit route for cocaine destined for the United States. In 2005, Venezuela

suspended its counternarcotics cooperation with the U.S. Drug Enforcement Administration.147

Since 2005, Venezuela has been designated annually as a country that has failed to adhere to its international antidrug obligations, pursuant to international drug-control certification procedures

in the Foreign Relations Authorization Act, FY2003 (P.L. 107-228). Most recently, in September

2020, President Trump again designated Venezuela as a country not adhering to its antidrug

obligations.148 At the same time, President Trump waived economic sanctions that would have curtailed U.S. assistance for democracy programs.

The State Department reported in its International Narcotics Control Strategy Report (INCSR)

covering 2020 that Venezuela was one of the preferred trafficking routes for the transit of illicit

drugs out of South America, especially cocaine. According to the INCSR, Venezuelan authorities “failed to make any efforts to combat illegal drug activity and prosecute corrupt officials or

suspected drug traffickers.”149 In March 2021 congressional testimony, Admiral Craig Faller,

Commander of U.S. Southern Command, asserted that drug trafficking flowing out of Venezuela increased 145% from 2015 to 2019. 150

U.S. authorities have taken action against Maduro officials and their relatives involved in drug

trafficking and related crimes.151 On March 2, 2020, the Spanish government approved the

extradition of Venezuela’s former intelligence chief, Hugo Carvajal, to the United States to stand

trial for drug and weapons trafficking. In March 2019, a U.S. court charged former Vice President Tareck el Aissami with violating the Foreign Narcotics Kingpin Act. In December 2017, two

145 Int ernat ional Crisis Group, A Glut of Arm s: Curbing the Threat to Venezuela from Violent Groups, February 2020.

146 St even Grat t an, Ant hony Faiola, and Ana Vanessa Herrero, “ Venezuelan Milit ary Offensive Sends T housands

Fleeing, Recharging One of t he World’s Worst Refugee Crises,” Washington Post, April 1, 2021; Latin News Daily,

“ Venezuela: Soldiers Killed in Lat est Apure Clashes,” April 27, 2021. 147 T he Venezuelan government ended cooperat ion aft er alleging t hat U.S. Drug Enforcement Administ rat ion agent s

were spying on t he government , charges U.S. officials dismissed as baseless. P rior t o t hat t ime, t he governments had

negot iat ed an ant idrug cooperat ion agreement (an addendum t o a 1978 Bilat eral Count ernarcot ics agreement ) t hat

would have enhanced informat ion -sharing and ant idrug cooperat ion. Venezuela never approved t hat agreement .

148 T he Whit e House, “ P resident ial Det ermination —Major Drug T ransit or Major Illicit Drug P roducing Count ries for

Fiscal Year 2021,” Sept ember 16, 2020.

149 U.S. Depart ment of St at e, Bureau of Int ernat ional Narcotics and Law Enforcement Affairs, 2020 INCSR, March

2021, vol. 1. 150 St at ement of Admiral Craig Faller, Commander, U.S. Sout hern Command, in U.S. Congress, Senat e Commit t ee on

Armed Services, 117 th Cong., 1st sess., March 16, 2021.

151 Sources for t his paragraph include Reut ers, “ Spain Approves Ext radit ion of Venezuela’s Ex -spy Chief t o t he Unit ed

St at es,” March 3, 2020; and Depart ment of Just ice, U.S. At t orney’s Office, Sout hern Dist rict of New York,

“ Venezuelan Minist er And Former Vice P resident T areck Zaidan El Aissami Maddah Charged Wit h Violat ions of t he

Foreign Narcot ics Kingpin Designat ion Act ,” March 8, 2019.

 

 

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nephews of First Lady Cilia Flores were sentenced to 18 years in a U.S. federal prison for conspiring to transport cocaine into the United States.

On April 1, 2020, additional U.S. naval counterdrug assets were deployed to the Caribbean. With cooperation from partner governments, the operation aimed, in part, to curb drug trafficking

emanating from Venezuela. By August 2020, the operation had seized more than 100 metric tons of cocaine and denied the Maduro government $3 billion in illicit revenue.152

Money Launder ing and Asset For feitur e

In addition to drug trafficking, the INCSR discusses Venezuela’s high level of vulnerability to money laundering and other financial crimes. According to the report, money laundering is

widespread in the country and worsened in 2020 as the Maduro government relaxed its controls

over foreign exchange, prices, and imports. This move resulted in a rapid dollarization of the

economy and created opportunities for corruption for those with dollars. Venezuela revised its

laws against organized crime and terrorist financing in 2014 but excluded the government and state-owned industries from the scope of any investigations. The unit charged with investigating

financial crimes has limited capabilities, and there is a lack of political will in the judicial system

to combat money laundering and corruption. There has been no improvement since the Treasury

Department’s Financial Crimes Enforcement Network (FinCEN) issued an alert to financial institutions in 2019 on transactions involving public corruption in Venezuela. 153

Revenue from illicit Venezuela-linked activities has been laundered into accounts, real estate, and

other industries around the world. U.S. prosecutors estimate that some $300 billion ill-gotten

Venezuelan wealth is held in south Florida alone, primarily in real estate. 154 The March 2020 indictments against senior Venezuelan officials continue DOJ ’s decade-long effort to uncover

corruption involving Maduro and his associates. Since 2010, DOJ has charged several dozen

current or former officials, including a former national treasurer, senior state economic development bank official, military officer, judge, and officials from PdVSA and its subsidiaries.

According to the State Department, the U.S. government has coordinated its efforts to identify,

confiscate, forfeit, and repatriate illicit Venezuelan assets, including through the U.S.

Departments of the Treasury, Justice, and Homeland Security. 155 The Department of the

Treasury’s FinCEN is the U.S. financial intelligence unit and administrator of U.S. anti-money laundering laws pursuant to the Bank Secrecy Act. FinCEN collaborates with financial

intelligence units around the world. The Department of the Treasury’s Executive Office for Asset

Forfeiture administers the Treasury Forfeiture Fund, a federal fund for forfeitures that are the

result of actions by selected participating agencies, and DOJ administers a separate assets

forfeiture fund.156 Some observers have advocated for certain U.S. seizures of Venezuelan assets

be redistributed to a charitable trust to benefit the Venezuelan people or placed in an account for

152 Abrams t est imony, August 4, 2020.

153 U.S. Depart ment of St at e, Bureau of Int ernat ional Narcotics and Law Enforcement Affairs, 2020 INCSR, March

2021, vol. 2. 154 Joshua Goodman, “ U.S. P rosecut or in Miami T arget ing Venezuela Graft Is Leaving,” AP , August 14, 2020.

155 U.S. Depart ment of St at e, Report on Recovering Assets Stolen from the Venezuelan People, Sect ion 151 (b) of t he

Furt her Consolidat ed Appropriat ions Act , 2020 (Division J). 2020.

156 T he T reasury Forfeit ure Fund part icipat ing agencies are t he Int ernal Revenue Service Criminal Invest igat ions

Division, U.S. Immigrat ion and Cust oms Enforcement , U.S. Cust oms and Border P rot ect ion, U.S. Secret Service, and

U.S. Coast Guard. For informat ion on DOJ’s asset forfeit ure fund, see ht t ps://www.just ice.gov/afp/fund/.

 

 

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use by a future democratically elected government.157 The Trump Administration reportedly

permitted the Guaidó government to use $20 million in forfeited assets to address the COVID-19 crisis by providing a monthly bonus to health care workers.158

The Treasury Department has helped countries develop the legal and technical capacity to block

transactions and seize assets. Analysts and U.S. officials have urged European countries and banks to intensify their efforts to detect and seize illicit assets tied to Maduro government.159

Illegal Mining

Gold mining, both licit and illicit, has accelerated as the Venezuelan economy has collapsed in the face of low global oil prices and an ongoing political crisis. Over the past few years, a boom in

illegal mining in Venezuela has reportedly contributed to deforestation and environmental

degradation in indigenous areas, clashes between rival criminal gangs and violence committed by

those gangs against miners whom they extort, and an outbreak of malaria (a disease that had been

eradicated).160 FARC dissidents and the ELN reportedly earn a majority of their income from illegal gold mining; the Maduro government also has increased its involvement in the sector as

licit gold supplies have run out.161 According to the INCSR, illegal exports of gold and other

metals worth hundreds of millions of dollars have occurred in recent years.162 Numerous reports

suggest the illegal mining industry also causes human rights violations, including the forcible recruitment of child labor and abuses of indigenous groups, including the Yanomami tribe.

The U.S. government has created an interagency gold working group, imposed sanctions on

individuals for their involvement in the illicit gold industry, and stepped up border security efforts to detect illicit gold shipments out of Venezuela.163

Human Tr afficking

Criminal groups, sometimes in collaboration with c orrupt officials, have subjected men, women,

and children to human trafficking both within Venezuela and abroad, particularly in border

regions and the Caribbean coast.164 Within the country, victims are trafficked from rural to urban

areas to serve as prostitutes or domestic servants. Venezuelan women and girls are often trafficked abroad for sexual exploitation, and children are trafficked for forced labor and/or are

forcibly recruited by FARC dissidents and the ELN. In 2019, researchers documented increasing

157 Michael J. Camilleri and Fen Osler Hampson, “ Seize t he Money of Venezuelan Klept ocrat s t o Help t he Count ry and

It s P eople,” Washington Post, January 29, 2019.

158 Karen DeYoung and Ant hony Faiola, “ Venezuela: T rump Administ rat ion T aps Frozen Funds in Effort t o Oust

Venezuelan Leader,” Washington Post, August 21, 2020. 159 Douglas Farah, The Maduro Regim e’s Illicit Activities: A Threat to Dem ocracy in Venezuela and Security in Latin

Am erica, At lant ic Council, August 13, 2020 .

160 Bram Ebus, “ Milit arizat ion and Mining a Dangerous Mix in Venezuelan Amazon,” Mongabay, December 7, 2017;

Maria Isabel Sanchez, “ Inside t he Deadly World of Venezuela’s Illegal Mines,” AFP , March 19, 2017; St ephanie

Nebehay, “ Malaria on Rise in Crisis-Hit Venezuela, WHO Says,” Reut ers, April 24, 2018.

161 Int ernat ional Crisis Group, Gold and Grief in Venezuela’s Violent South , February 2019. 162 2020 INCSR, March 2021, vol. 2.

163 At lant ic Council, “ T ranscript: Count ering t he Maduro Regime’s Global Web of Illicit Act ivit ies, ” August 14, 2020.

164 U.S. Depart ment of St at e, 2020 Trafficking in Persons Report: Venezuela , June 25, 2020. See also Devon Cone and

Melanie T eff, Searching for Safety: Confronting Sexual Exploitation and Trafficking of Venezuelan Wom en and Girls ,

Refugees Int ernat ional, August 2019.

 

 

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sex and labor trafficking by illegally armed groups in mining regions. Venezuelan migrants who have fled abroad lacking identity documents are particularly vulnerable to human trafficking.

The U.S. Department of State ranked Venezuela as Tier 3 for the seventh consecutive year in its June 2020 Traf f icking in Persons (TIP) report. This ranking indicates that the country does not

meet minimum standards for preventing human trafficking, nor is it making significant efforts to

do so. The Maduro government reported that it had created a special prosecutor’s office for TIP

cases and initiated proceedings against three officials complicit in a case that ended with a

shipwreck at sea of a vessel reportedly carrying 90 people. The government did not provide any data on TIP victims assisted, prosecutions, or convictions for human trafficking. In September

2019, the Trump Administration waived TIP-related sanctions on assistance to Venezuela that

would have been triggered by that Tier 3 ranking, determining that the continuation of U.S.

democracy and human rights assistance was in the U.S. national interest. The State Department

also has notified Congress of its intention to provide $3 million in FY2018 funds to help strengthen human trafficking efforts in countries bordering Venezuela.165

U.S. Concerns About Terrorism

Since 2006, the Secretary of State has determined annually that Venezuela has not been

“cooperating fully with United States antiterrorism efforts” pursuant to Section 40A of the Arms

Export Control Act (AECA). Per the AECA, such a designation subjects Venezuela to a U.S. arms

embargo, which prohibits all U.S. commercial arms sales and retransfers to Venezuela. The most recent determination was made in May 2020 and published on June 2, 2020.166

In 2008, the Department of the Treasury imposed sanctions (asset freezing and prohibitions on

transactions) on two individuals and two travel agencies in Venezuela for providing financial

support to Hezbollah, which the Department of State has designated a Foreign Terrorist Organization. The action was taken pursuant to E.O. 13224, aimed at impeding terrorist funding.

According to the State Department’s Country Reports on Terrorism 2019, Venezuela has a

permissive environment for known terrorist groups, including FARC dissidents, the Colombian- origin ELN, and sympathizers of Lebanese Hezbollah. In particular, the report maintained that

financial ties with FARC dissidents and the ELN fac ilitated the Maduro government’s corruption

and graft schemes. The State Department noted reports of sporadic cooperation between FARC

dissidents and the ELN in the areas of road and border checkpoints, forced displacement of vulnerable indigenous communities, and trafficking of illegal narcotics and gold.167

According to several DOJ indictments, there are alleged links between the Maduro government

and Hezbollah through a few key intermediaries. One of them, Alex Saab, a Colombian subject to

U.S. sanctions, is in the process of being extradited from Cape Verde to face U.S. money laundering charges.168 The DOJ also has charged a former Venezuelan legislator, Adel el Zabayar,

165 U.S. Depart ment of St at e, CN #218, August 15, 2019. 166 U.S. Depart ment of St at e. P ublic Not ice 11131, “ Determinat ion and Cert ificat ion of Count ries Not Cooperating

Fully wit h Unit ed St at es Ant it errorism Efforts,” Federal Register 2020-11858, June 2, 2020.

167 U.S. Depart ment of St at e, Country Reports on Terrorism 2019 , June 24, 2020.

168 Cape Verde’s Supreme Court has approved Saab’s ext radit ion t o t he United St at es. DOJ, “ Unit ed St at es v. Alex

Nain Saab Moran, Docket No. 19 -CR-20450-RNS,” July 25, 2019; Barry Hat t on, “ West African Court Allows

Ext radit ion t o US of Venezuelan,” AP , March 17, 2021.

 

 

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with involvement in weapons for cocaine negotiations between the FARC and Hezbollah and Hamas.169 Analysts have criticized the indictment for failing to provide conclusive evidence. 170

Some Members of Congress have called for Venezuela to be designated as a state sponsor of terror. This designation would trigger an array of sanctions, including aid restrictions,

requirement for validated export licenses for dual-use items, and other financial restrictions.

Critics caution there is a lack of evidence to conclude that the Venezuelan government has “repeatedly provided support for acts of international terrorism, ” as required by law.

Outlook The situation in Venezuela continues to represent a major foreign policy challenge for the United States. Two years after the United States ceased to recognize Nicolás Maduro as the legitimate

president of Venezuela, Maduro still appears firmly entrenched in power. Meanwhile, the

opposition—once united behind Juan Guaidó—has fractured. Although the Guaidó-led opposition

remains focused on obtaining adequate conditions for free and fair presidential and legislative

elections, Henrique Capriles and other opposition leaders appear to be focused on fielding candidates in the 2021 regional and local elections. Venezuelan civil society has put forth a list of

potential candidates for a new electoral council, the first step in what may be a long process to rebuild the institutions necessary to one day convene elections that are more free and fair.

The failure to dislodge Maduro from power demonstrated the limits of U.S. and other

international efforts to prompt political change in Venezuela. Unilateral U.S. policies, such as oil

sanctions, arguably worsened the humanitarian crisis in the country and caused divisions within

the international coalition that once backed Guaido. Despite these developments, some analysts

urge Biden officials to maintain broad sanctions on the Maduro government and to increase U.S. and international efforts to hold Maduro officials and their enablers accountable. Others call on

the Biden Administration to consider the humanitarian effects of U.S. sanctions and to end any

sanctions that have unduly exacerbated the crisis. Neither policy approach is likely to prompt

immediate political change. In the meantime, ensuring humanitarian aid reaches the Venezuelan

people, both those within the country and those sheltering abroad, likely will remain a key priority for the United States and other donors.

The 117th Congress is likely to continue close oversight of U.S. policy toward Venezuela,

including the Biden Administration’s actions to sanction human rights abuses, corruption, and antidemocratic actions by the Maduro government and its backers. Many Members of Congress

have praised the March 2021 designation of TPS for Venezuela. Although some in Congress

support continued pressure on the Maduro government, others support a more targeted approach,

arguing that broad sanctions have not prompted political change but have hurt the Venezuelan

people. As in the 116th Congress, some Members have advocated for an end to certain sanctions, including a ban on oil-for-diesel swaps that has contributed to fuel shortages in the country.171

The 117th Congress may examine new policy approaches by the Biden Administration and further

legislative options, such as additional sanctions against the Maduro government and its foreign enablers or humanitarian assistance to Venezuelans.

169 DOJ, “ Former Member Of Venezuelan Nat ional Assembly Charged Wit h Narco -T errorism, Drug T rafficking, And

Weapons Offenses,” May 27, 2020.

170 “ US Indict ment Claims Venezuelan P olit ician Linked t o Hezbollah, Hamas,” Insight Crim e, May 29, 2020. 171 T imot hy Gardner, “ Democratic Senat or Urges Biden Admin t o Allow Diesel Swap in Venezuela,” Reut ers, March

23, 2021.

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