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Restart of Venezuela, opposition talks could lead to US sanction relief

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© Elvis Hidrobo Amoroso, head of Venezuela’s National Electoral Council (CNE), addresses the media after a meeting with Jesus Maria Casal, president of Venezuela’s opposition’s National Primary Commission, in Caracas, Venezuela September 25, 2023. REUTERS/L

By Mayela Armas, Matt Spetalnick and Marianna Parraga

CARACAS/WASHINGTON/HOUSTON () -Venezuela’s government and opposition will resume long-suspended talks on Tuesday that President Nicolas Maduro said would benefit the upcoming 2024 election, a move that could lead to Washington easing sanctions, multiple sources said on Monday.

The U.S. has long said it would lift some of its sanctions in exchange for democratic concessions from Maduro, but the announcement on Monday offered the first concrete schedule in nearly a year for talks between the government and opposition.

President Joe Biden’s administration has been shifting toward increasing U.S. engagement with Caracas on issues from energy to immigration to political reform, away from former President Donald Trump’s “maximum pressure” campaign.

The deal between the government and the opposition will offer electoral guarantees, Maduro said on state television.

“We are on the verge of signing new agreements with the opposition, agreements beneficial for peace and the upcoming election,” he said without giving details.

The negotiations, meant to provide a way out of Venezuela’s long-running political and economic crisis, will take place in Barbados. Maduro, president since 2013, is expected to run for re-election but has not yet formalized his candidacy. His government has banned prominent opposition figures from running.

Initial steps by the U.S. would involve significant but limited sanctions relief, possibly removing some restrictions on Venezuela’s banking sector, Washington sources said, adding that further relaxation would depend on whether Maduro organizes fair elections that meet international standards.

The U.S. could quickly follow the signing of the government-opposition agreement with authorizations related to Venezuela’s oil business, two people in Washington familiar with the matter said on condition of anonymity.

POSSIBLE SANCTIONS RELIEF

Any U.S. action would come only after an agreement under which Maduro commits to a presidential election date and lifting of the bans on opposition candidates, these two sources said.

One source in Washington said initial sanctions-easing steps could be announced within hours of the Barbados signing if the U.S. is satisfied Maduro has met his commitment at this stage.

Among the steps under consideration is restoring Venezuelan banks’ access to the global financial system, which could facilitate further oil-related transactions, the source said.

The U.S. State Department celebrated the announcement of the return to talks earlier on Monday but did not mention sanctions relief.

“The United States will continue its efforts to unite the international community in support of the Venezuelan-led negotiation process,” it said.

It was not immediately known whether U.S. officials would be present for the talks or announcement in Barbados.

The U.S. is mindful that Maduro has failed to meet previous commitments on holding free elections and is watching closely to ensure he complies with his latest promises, sources said.

One source in Washington said the government-opposition agreement will include an election date in the latter half of next year and will allow international observers and participation of opposition figures currently barred from holding office.

It remained unclear whether all opposition candidates would have their bans lifted. The opposition considers the bans unlawful.

Some members of the opposition said on Monday that they doubted Maduro would follow through on his promises. The two sides last met in November 2022.

The opposition is set to hold a primary on Sunday to choose its 2024 candidate. Front-runner Maria Corina Machado is currently banned from holding public office.

Last week, reported, citing five sources, that Venezuela and the U.S. had progressed at talks in Qatar toward a deal that could allow at least one additional foreign oil firm to take Venezuelan for debt repayment if Maduro resumed negotiations with the opposition.

Two of those sources named France’s Maurel & Prom, a joint venture partner with Venezuela state-run oil company PDVSA, as a possible recipient of a U.S. “comfort letter.” At the time a Maurel & Prom spokesperson confirmed that the company “made a request to this effect to U.S. authorities” but declined to elaborate.

A U.S. comfort letter would allow a partner of PDVSA to take Venezuelan oil for exports as debt repayment or establish an oil swap deal to settle pending debts and dividends.

U.S. SANCTIONS

The U.S. imposed sanctions on Venezuela to punish Maduro’s government following a 2018 election that Washington considered a sham. Since 2019, U.S. sanctions have banned PDVSA from exporting its oil to its chosen markets.

Trump’s sanctions, combined with diplomatic pressure, were intended to force Maduro’s ouster. Maduro and his government have survived with support from the military plus China, Russia and Cuba.

The Biden administration has been seeking ways to increase the flow of oil to world markets to alleviate high prices caused by sanctions on Russia over its war in Ukraine, OPEC+ output cuts, and now fears conflict in the Middle East could escalate.

But with no substantial investment in Venezuela’s oil sector for over a decade, any real oil output increase will take time, according to analysts.

Biden’s administration has kept most sanctions in place in an effort to force Maduro to take concrete steps toward free elections, holding out sanctions relief as an enticement and drawing criticism from opponents.

Assailing Biden’s energy policies, Republican U.S. Senator John Barrasso said in a statement: “America should never beg for oil from socialist dictators or terrorists.”

The government and opposition last year agreed to the use of $3 billion in frozen assets for humanitarian needs, via a United Nations-run fund that is not yet operational.

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