Logo of Phnom Penh Post newspaper Phnom Penh Post - White House bans Venezuela's digital currency and imposes further sanctions



White House bans Venezuela's digital currency and imposes further sanctions

President Donald Trump with Treasury Secretary Steve Mnuchin during a roundtable discussion on tax cuts in St. Louis, Mo., on March 14, 2018. The Trump administration on Monday, March 19, announced it was broadening sanctions against Venezuela, blacklisting four government officials and banning a digital currency President Nicolás Maduro created last month to circumvent financial sanctions on his economically strapped nation. Doug Mills/The New York Times
President Donald Trump with Treasury Secretary Steve Mnuchin during a roundtable discussion on tax cuts in St. Louis, Mo., on March 14, 2018. The Trump administration on Monday, March 19, announced it was broadening sanctions against Venezuela, blacklisting four government officials and banning a digital currency President Nicolás Maduro created last month to circumvent financial sanctions on his economically strapped nation. Doug Mills/The New York Times

White House bans Venezuela's digital currency and imposes further sanctions

by Julie Hirschfeld Davis and Nathaniel Popper

WASHINGTON — The Trump administration announced Monday that it was broadening sanctions against Venezuela, blacklisting four government officials and banning a digital currency President Nicolás Maduro created last month to circumvent financial sanctions on his economically strapped nation.

The White House said the new measures were intended to send a message to Maduro’s government, which it has accused of corruption and repression, that the United States remains focused on the economic devastation in Venezuela, and holds the country’s president and his associates directly responsible for creating the conditions there. The nation is in the throes of food and medicine shortages and a collapse of the health system as well as other government services, circumstances that have prompted hundreds of thousands of Venezuelans to flee.

The intensification of sanctions comes as President Donald Trump prepares to attend the Summit of the Americas next month in Lima, Peru, where the crisis in Venezuela will be a central issue. Vice President Mike Pence is scheduled to deliver a speech this week at the Organization of American States in Washington, where he plans to call out “the Maduro regime’s lawless actions,” according to a spokeswoman, and urge swift action to address the humanitarian situation and restore political order.

The sanctions also come just two months before Maduro is to stand for re-election in a race he is expected to win given his control of Venezuela’s political and judicial machinery. The United States is among the countries that have declared they will not recognize the results.

“President Maduro decimated the Venezuelan economy and spurred a humanitarian crisis,” Treasury Secretary Steven Mnuchin said in a statement announcing the newly blacklisted individuals. Mnuchin cited the individuals for “economic mismanagement and corruption” and blasted an attempt by the Maduro government to evade sanctions through the creation of a new digital currency known as Petro.

“Instead of correcting course to avoid further catastrophe, the Maduro regime is attempting to circumvent sanctions through the Petro digital currency — a ploy that Venezuela’s democratically elected National Assembly has denounced and Treasury has cautioned U.S. persons to avoid,” he said.

The sanctions brought an angry response from Maduro, who issued a statement that the Venezuelan Embassy in Washington “rejects and strongly condemns the alleged and unilateral new sanctions of the Donald Trump regime against the Venezuelan people and our financial and economic system.”

The administration’s announcement came a few hours after Trump signed an executive order barring the use of any digital currency issued by the Maduro government since Jan. 9. Maduro announced last month that his country had begun a presale of the Petro, backed by the nation’s vast petroleum reserves. The Venezuelan government called the launch a response to a financial crisis that has prompted a profound devaluation of the national currency, the bolívar, and quadruple-digit inflation.

Senior Trump administration officials said the sanctions were meant to apply to the Petro or any other currency issued by or on behalf of Venezuela. One official said the Petro should be viewed as directly supporting the Maduro dictatorship and its attempts to undermine democratic order in Venezuela, calling it a scam to defraud international investors. The officials spoke on the condition of anonymity to describe the sanctions and their purpose.

Whether the sanctions will achieve their intended effect of destabilizing the government remains to be seen, but some experts cautioned that the moves could actually hurt Venezuelans in the short term.

“It’s part of a pattern of escalating sanctions on the Maduro government in advance of the presidential elections later this year, with the idea that that will produce the collapse of the government,” said Cynthia J. Arnson, director of the Wilson Center’s Latin American Program. “But it’s usually the case that governments dig in their heels all the more when they feel that sanctions are aimed at removing them from power instead of producing a change in behavior, and what this will do is certainly increase the suffering and the shortages that are happening now.”

Mnuchin, who is attending a gathering of finance ministers in Argentina, said he and his counterparts had discussed “how to achieve our shared objectives of restoring Venezuelan democracy, combating the kleptocracy of the Maduro regime, and responding to the humanitarian crisis caused by Maduro’s economic policy.”

“We urge Maduro to distribute humanitarian aid and stop blocking much-needed foreign assistance to the suffering people of Venezuela, and we again call upon the Venezuelan military to respect and uphold the constitution,” Mnuchin said.

The four people sanctioned by the Treasury Department on Monday are current and former officials who played key roles in Maduro’s government and political network:

— Américo Alex Mata García is a Venezuelan state bank director who allegedly solicited and funneled $35 million from Odebrecht, a Brazilian construction company involved in a worldwide corruption scandal, to Maduro’s presidential campaign in 2013, the department said.

— Willian Antonio Contreras heads the agency responsible for imposing price controls in Venezuela.

— Nelson Reinaldo Lepaje Salazar is acting chief of the Office of the National Treasury of Venezuela, which has been the subject of previous corruption allegations, including that Maduro stole nearly $10 million from the agency.

— Carlos Alberto Rotondaro Cova, former president of the board of directors of the Venezuelan Institute of Social Security, the government agency in charge of providing patients with drugs for chronic conditions.

The four will have any assets subject to U.S. jurisdiction frozen, and Americans are generally barred from engaging in financial transactions with the individuals.

The sanctions announced Monday notably did not include any restrictions on the oil sector in Venezuela, a drastic step that senior Trump administration officials say is still under consideration. Rex Tillerson, the departing secretary of state, has suggested that Trump is considering a ban on imports of Venezuelan crude to U.S. refineries. That would be a crippling blow to the national oil company, Petróleos de Venezuela, or PDVSA, since the United States is its biggest customer and few refineries outside the U.S. have the capacity to process Venezuelan heavy crude.

MOST VIEWED

  • Cambodia on the verge of national tragedy, WHO warns

    The World Health Organisation (WHO) in Cambodia warned that the country had reached another critical point amid a sudden, huge surge in community transmission cases and deaths. “We stand on the brink of a national tragedy because of Covid-19. Despite our best efforts, we are

  • Phnom Penh placed in two-week lockdown

    The government has decided to place Phnom Penh in lockdown for two weeks, effective April 14 midnight through April 28, as Cambodia continues to grapple with the ongoing community outbreak of Covid-19, which has seen no sign of subsiding. According to a directive signed by Prime Minister

  • Vaccination open to foreigners in Cambodia

    The Ministry of Health on April 8 issued an announcement on Covid-19 vaccination for foreigners residing and working in Cambodia, directing the Ministry of Labour and Vocational Training and local authorities to register them. Health minister Mam Bun Heng, who is also head of the inter-ministerial

  • Culture ministry: Take Tuol Sleng photos down, or else

    The Ministry of Culture and Fine Arts has told Irish photographer Matt Loughrey to take down the photos of Khmer Rouge victims at Tuol Sleng Genocidal Museum which he allegedly colourised and altered to show them smiling. The ministry said Loughrey's work is unacceptable, affecting

  • Cambodia gears up for muted New Year festival

    The recent curfew and restrictions imposed in the capital and other Covid-19 hotspots were intended to break the chain of transmission, Ministry of Health spokeswoman Or Vandine said as municipal and provincial authorities issued new directives banning certain activities during the upcoming Khmer New Year

  • Covid-19 vaccination now obligatory

    Prime Minister Hun Sen on April 11 issued a sub-decree making Covid-19 vaccination compulsory for individuals unless they have a medical certificate proving they have pre-existing health conditions that prevent them from doing so. «This applies to all members of the armed forces and civil servants