US sanctions on Venezuela set to return?

The suspension last October by the US in some sectors of sanctions on Venezuela, contingent on Venezuela at the very least setting out a plan for free and fair elections, could collapse in April because President Maduro has not stuck to promises he made in a deal signed by him and opposition politicians.

New York-based legal firm Freehill Hogan & Mahar LLP, noted that on October 18th 2023 the US temporarily suspended certain sanctions against Venezuela, including the issuance of General Licence 44, which broadly speaking temporarily authorized, through to April 18th 2024, all transactions related to oil and gas sector operations in Venezuela.

For the shipping sector this Licence temporarily authorized the provision of goods and services concerning “the production, lifting, sale, and exportation of oil or gas from Venezuela.”

A number of developments since then had caused the US to reassess its current sanctions policy against Venezuela.

On January 30th the US Department of State said that the US currently expected that General Licence 44 would expire on April 18th.

“Actions by Nicolas Maduro and his representatives in Venezuela, including the arrest of members of the democratic opposition and the barring of candidates from competing in this year’s presidential election, are inconsistent with the agreements signed in Barbados last October by representatives of Nicolas Maduro and the Unitary Platform”, the US said, adding that “absent progress between Maduro and his representatives and the opposition Unitary Platform, particularly on allowing all presidential candidates to compete in this year’s election, the US will not renew the license when it expires on April 18th 2024.”

That said, the door was not closed completely. The State Department announced that “the United States remains strongly committed to supporting dialogue between the parties and to the aspirations of the Venezuelan people for a democratic future. We will continue to work with the international community and all peaceful democratic actors across the political spectrum in Venezuela and leverage mechanisms at our disposal to encourage a return to the principles in the Barbados agreement.”

In other words, should President Maduro take immediate action to uphold the roadmap’s principles “ensuring that opposition political actors have the right to select their candidates for the 2024 presidential election freely”, there could be a chance that the sanctions would not be reimposed.

Freehill Hogan & Maher said that it was “still possible that the United States may ultimately choose to extend General License 44 if the Maduro regime reverses course with respect to its democratic commitments, but as of now the United States has expressly stated that it currently intends to allow the license to expire”.

The law firm observed that “from a practical perspective, the State Department’s indication that it currently intends to allow General Licence 44 to expire means that all voyages involving the Venezuelan oil and gas sector must be completed by April 18th 2024, or the parties involved run the risk of sanctions pursuant to Executive Order 13850.”