For the first time in three decades, Washington is imposing deep economic sanctions on a government in the Western Hemisphere as it tries to oust Venezuelan leader Nicolás Maduro and drive a wedge between the South American nation and its remaining allies.
Speaking at a meeting of foreign leaders in Lima, Peru, on Tuesday, U.S. National Security Advisor John Bolton said the dramatic economic measure — rolled out late Monday — will force Maduro, 57, to capitulate.
“Not since an asset freeze against the [Manuel] Noriega government in Panama in 1988, a trade embargo on Nicaragua in 1985, or the comprehensive asset freeze and trade embargo on Cuba in 1962 have we taken this action,” Bolton said. “In each of these instances, we used robust economic tools against dictatorships that were destroying their countries with corruption, violence, and repression.”
“It worked in Panama, it worked in Nicaragua once, and it will work there again, and it will work in Venezuela and Cuba,” he said.
Yet, the sanctions in Panama and Nicaragua were combined with military force and Cuba has resisted change despite almost 60 years of an even more punishing economic isolation.
President Donald Trump late Monday signed an executive order that freezes all Venezuelan government assets in U.S. jurisdictions and prohibits all transactions with the government unless specifically exempted.
Critically, the order also authorizes sanctions against foreign companies and individuals who provide support, goods or services to the Venezuelan government or any of the more than 100 people and businesses who have been flagged over the years by the U.S. government. It also further restricts Venezuelan officials from entering the United States.
Florida Sen. Marco Rubio, a Republican, applauded the move, saying “any country or individual doing business with the Maduro crime family will face sanctions as they are perpetuating the agony of the Venezuelan people.”
But this week’s actions also fall short of an outright embargo like the one leveled against Cuba, which prohibits U.S. individuals and companies from doing business with anyone on the island — unless they’ve received an exemption. The Venezuelan sanctions are limited to the government, its agencies and those who have previously been flagged as bad actors by the U.S. government.
“The text of the sanctions, as written, I think is going to have far less of an impact than the environment of over-compliance that it’s going to generate,” said Geoff Ramsey, the assistant director of Venezuela at the Washington Office on Latin America, a think tank. “There is a lot of intentional ambiguity in the way the executive order is written that will cause financial institutions, banks and insurance companies to be much more reticent to get involved in Venezuela … and it will aggravate the crisis for even legitimate actors.”
Washington had already taken moves to restrict Venezuela’s oil and gold sales — the nation’s economic lifelines — but the new measures represent a dramatic escalation.
“We are taking this step to deny Maduro access to the global financial system, and to further isolate him internationally,” Bolton explained. “In addition, we are sending a signal to third parties that want to do business with the Maduro regime: Proceed with extreme caution. There is no need to risk your business interests with the United States for the purposes of profiting from a corrupt and dying regime.”
Besides Cuba, the United States has used similar economic sanctions on the governments of Iran, North Korea and Syria. “Now, Venezuela is part of this very exclusive club of rogue states,” Bolton said.
Venezuela’s Foreign Ministry called the new sanctions an act of “economic terrorism” that “intends to formalize the criminal economic, financial and commercial embargo that’s already in place, and which has caused deep wounds to Venezuelan society.”
The objective of the sanctions “is to strangle the people of Venezuela and force an unconstitutional change in the government of our country,” the agency said.
Maduro has long blamed U.S. “economic warfare” for his nation’s troubles including hyperinflation and sporadic food and medicine shortages.
Even so, this week’s sanctions carve out exemptions for food, clothing, medicine, telecommunications and other humanitarian aid that the South American nation desperately needs. It also exempts nonprofits and international aid organizations from the sanctions.
“The United States will use every appropriate tool to end Maduro’s hold on Venezuela, support the Venezuelan people’s access to humanitarian assistance, and ensure a democratic transition in Venezuela,” the White House said in a statement. “The United States has taken great care to safeguard the Venezuelan people’s access to humanitarian goods, and will continue to work closely with its partners to safeguard peace and security in the Western Hemisphere.”
The renewed economic pressure comes as the United States and more than 50 other nations have been trying to force Maduro to step down. They consider the head of Venezuela’s opposition-controlled congress, Juan Guaidó, the country’s legitimate leader. But Maduro still has powerful backers, including Russia, China and Cuba.
On Tuesday, Bolton said the United States will keep ramping up sanctions on Cuba to break its ties with Venezuela. And Bolton suggested that Russian and Chinese interests in Venezuela revolve around money.
“To both Russia and China, we say that your support to the Maduro regime is intolerable, particularly to the democratic regime that will replace Maduro,” Bolton said. “ We say again to Russia, and especially to those who control its finances: ‘Do not double down on a bad bet.’ To China, which is already desperate to recoup its financial losses, the quickest route to getting repaid is to support a new legitimate government.”
The sanctions come at a critical time for Venezuela. Representatives for Maduro and the opposition had been meeting in Barbados in hopes of finding a solution to the political impasse, including holding new elections.
On Tuesday, both sides said they were committed to continuing those talks, but the sanctions are likely to undermine some of the progress that has been made, Ramsey said.
“I’m concerned that this is an effort by the U.S. government to tilt the balance in favor of its own preferred outcome,” which is for Maduro to step down before new elections are held, he said. “I think there was momentum toward an imperfect agreement in Barbados and this really jeopardizes that with no clear alternative.”
Bolton expounded on the sanctions at the International Conference for Democracy in Venezuela, an event being held in Peru’s capital that has drawn representatives from almost 50 nations.
Venezuela was once an economic engine of South America and still boasts the world’s largest petroleum reserves. But now it’s being seen as a threat to the region’s stability, as more than four million people have fled the country in recent years. Some fear this week’s economic sanctions will speed the outflow.
David Smolansky, the head of the Organization of American States working group on the Venezuelan migratory crisis, downplayed the effect Trump’s executive order might have.
He said he has traveled the region talking to hundreds of migrants “and I’ve never met the first person who said they left because of U.S. sanctions.”
“The sanctions that have had the worst impact are those that Maduro has implemented over the last five years,” he said. “The economic collapse, the collapse in security, the violation in human rights. Those are the reasons Venezuelans are leaving.”
U.S. Rep. Donna Shalala, a Miami Democrat, backs the sanctions but said Republicans in Congress need to approve Temporary Protected Status for Venezuelans, and give them the right to stay in the United States without fear of being deported.
“Maduro must go,” she said in a statement. “I urge the President to continue implementing targeted sanctions and prioritizing humanitarian assistance, while developing a comprehensive plan with our regional allies to secure a peaceful transition away from Maduro’s corrupt, socialist regime. Our policy must focus on getting rid of Maduro without hurting the Venezuelan people.”
In a tweet, Guaidó defended the measures, saying they were the consequence of “an arrogant, unfeasible and indolent usurpation” of power by Maduro and his cronies.
“Those who ... are benefiting from the hunger and pain of Venezuelans should know that it carries consequences,” he added.
Bolton said the economic measures were needed to rein in a “tyrant” who has tortured, killed and imprisoned political opponents and doubled down on failed strategies as the nation has gone hungry.
Last week, Washington sanctioned several individuals, including Maduro’s stepsons, for stealing money from a Venezuelan government program designed to provide food to the country’s neediest.
“In this hemisphere, it is our moral imperative to defend our neighbors against any threat, internal or external, that undermines peace, security, and prosperity,” Bolton said. “Maduro has been hoping the world would just let him tap, tap, tap the opposition along, while he continued to oppress and steal and kill for his private gain. But, Maduro is at the end of his rope.”
El Nuevo Herald Reporters Nora Gámez Torres and Antonio Maria Delgado, and McClatchy D.C. Correspondent Michael Wilner contributed to this article.