Venezuela to freeze self-declared president’s accounts as sanctions bite

US measures trigger higher global oil prices and angry responses from China and Russia

Venezuela’s general prosecutor, Tarek William Saab, speaks to reporters in Caracas on Tuesday. Photograph: Marco Bello/Getty Images

Venezuela’s general prosecutor, Tarek William Saab, speaks to reporters in Caracas on Tuesday. Photograph: Marco Bello/Getty Images

 

Venezuela’s government moved against self-proclaimed interim president Juan Guaidó on Tuesday, seeking a travel ban and a freeze on his bank accounts, while state-run oil company PDVSA sought to sidestep US sanctions.

The Trump administration’s sanctions, aimed at driving President Nicolás Maduro from power, were the strongest measures yet against the 56-year-old former union leader who has overseen economic collapse and an exodus of millions of Venezuelans in recent years.

The measures triggered higher global oil prices and angry responses from China and Russia.

Venezuelan attorney general Tarek Saab said he had asked the supreme court to open a preliminary investigation into Mr Guaidó, accusing him of helping foreign countries to interfere in internal matters. He also asked the court to impose a travel ban on the 35-year-old leader and to freeze his bank accounts.

The United States and several other countries have recognised Mr Guaidó as Venezuela’s legitimate head of state and denounced Mr Maduro as a usurper. Mr Maduro, sworn in earlier this month for a second term after disputed elections last year, accuses Mr Guaidó of staging a US-directed coup against him. Maduro is backed by a number of countries, including Russia.

Mr Maduro’s inauguration on January 10th sparked protests throughout Venezuela. More than 40 people are believed to have been killed in political violence last week, including 26 shot by pro-government forces, five killed in house raids and 11 during looting, UN human rights spokesman Rupert Colville said on Tuesday.

He said more than 850 people were detained between January 21st and January 26th, including 77 children, some as young as 12.

Mr Guaidó said on Tuesday he did not underestimate the threat of imprisonment but did not believe it was “anything new”. Many opposition leaders have been imprisoned in the South American nation. “We are here. We will keep acting and working to confront the humanitarian crisis,” Mr Guaidó told a news conference.

Most experts believe the sanctions and other measures against Mr Maduro will encourage him to step down only if he loses the support of the powerful military, which until now has been mostly loyal to the leftist ruling party founded by late president Hugo Chávez.

As a lawmaker who heads the National Assembly, Mr Guaidó has immunity from prosecution unless ordered by a top court. However, the supreme court is loyal to Mr Maduro and is expected to open the investigation as soon as Tuesday.

Sanctions

The US State Department said on Tuesday it had certified Mr Guaidó’s authority to control certain assets held by the Federal Reserve Bank of New York or other US-insured banks, including government and central bank accounts.

PDVSA responded to the sanctions by ordering customers with tankers waiting to load crude destined for the United States to prepay, according to sources. Such prepayment could be in violation of the sanctions, setting the stage for a standoff at the ports.

PDVSA is also seeking to sidestep the sanctions by asking major buyers, including US refiners, to renegotiate contracts, sources said.

The Kremlin condemned the sanctions as illegal interference, while China said they would lead to suffering for which Washington would bear responsibility. Both countries have lent billions of dollars to Venezuela and are concerned about new stress on debt payments.

International Brent crude oil futures rose over 2 per cent on Tuesday in reaction. Venezuela is among the world’s largest heavy crude oil producers.

The new US sanctions could cause problems for Venezuela when it comes to servicing its sovereign debt to Russia, which stands at $3.15 billion (€2.76 billion), Russian deputy finance minister Sergei Storchak told reporters on Tuesday.

“There will probably be problems. Everything now depends on the army, on the soldiers and how faithful they will be to their duty and oath. It is difficult, impossible to give a different assessment,” he said.

In Geneva, senior US and Venezuelan diplomats traded jibes at a disarmament conference. Venezuela’s ambassador, Jorge Valero, said the administration of US president Donald Trump was preparing a “military invasion” and questioned whether Washington had the moral authority to “impose a diktat” on Caracas.

Venezuela has sunk into economic and political turmoil under Mr Maduro’s socialist government, with inflation seen rising to 10 million per cent this year.

The loss of revenue from the United States, the number one buyer of Venezuelan crude, is sure to further hamper the government’s ability to import basic goods like food and medicine, exacerbating a humanitarian crisis that has prompted more than three million people to leave the country in recent years.

“Sanctions on Venezuela will lead to the deterioration of conditions of people’s lives,” Chinese foreign ministry spokesman Geng Shuang told a news briefing in Beijing. – Reuters