Trump tightens Venezuela's access to U.S. financial system

August 25, 2017

President Trump signed an executive order on Aug. 25, to restrict Venezuelan President Nicolás Maduro's access to the U.S. economy. National security adviser H.R. McMaster said the action strongly punishes Maduro's "illegitimate dictatorship."

President Trump moved Friday to restrict the Venezuelan government’s access to the U.S. financial system and squeeze the oil-based economy that sustains President Nicolás Maduro, but he stopped short of imposing a full oil embargo.

Trump signed an executive order barring dealings in new bonds and stocks issued by the government and the state oil company, Petróleos de Venezuela, the parent of Citgo. Banks also cannot engage in new lending with the government or the oil giant.

“Maduro chose to embrace dictatorship over his own people,” national security adviser H.R. McMaster said. “With today’s announcement, the president is keeping his promise of strong action and continuing to show strong leadership.”

The action followed Maduro’s decision to convene a special assembly to rewrite the constitution of the oil-rich nation and assume many government powers. U.S. and Latin American leaders say Maduro’s government is veering toward dictatorship.

U.S. officials said the new restrictions ensure that U.S. financial institutions cannot be used to help finance or underwrite Maduro’s expansion of undemocratic rule.
Venezuelan President Nicolás Maduro speaks at a news conference in Caracas on Tuesday. (Ariana Cubillos/AP)

The sanctions would prevent, for instance, a repeat of a $2.8 billion bond deal with Goldman Sachs reached earlier this year that gave the cash-strapped Venezuelan government an important lifeline. Yet Venezuela’s growing international isolation because of Maduro’s power grab, coupled with its fast-eroding financial stability, has already effectively shut it out of debt markets, with investors seeing it as too great a risk.

The new economic sanctions are likely to deepen the financial crisis in Venezuela, where the oil-based economy has shrunk by about 35 percent since 2014.

The Trump administration’s goal is a return to full democracy, including free elections, adherence to the country’s constitution and the reestablishment of the authority of the elected assembly, U.S. officials said...

Read entire articles at The Washington Post.

 

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