December 1, 2023

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As Venezuela resumes, opposition talks could lead to an easing of US sanctions

As Venezuela resumes, opposition talks could lead to an easing of US sanctions
  • President Maduro says the agreement will provide electoral guarantees
  • US may initially ease banking restrictions – sources
  • Sources: Easing oil-related sanctions may come soon

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

The United States has long said it would lift some of its sanctions in exchange for democratic concessions from Maduro, but Monday’s announcement provided the first concrete timetable in nearly a year for talks between the government and the opposition.

President Joe Biden’s administration is shifting toward increasing US engagement with Caracas on issues ranging from energy to immigration to political reform, away from the “maximum pressure” campaign pursued by former President Donald Trump.

Maduro told state television that the agreement between the government and the opposition would provide electoral guarantees.

He added, “We are about to sign new agreements with the opposition, agreements that are beneficial for peace and the upcoming elections,” without going into details.

The negotiations, aimed at providing a way out of Venezuela’s ongoing political and economic crisis, are scheduled to be held in Barbados. Maduro, who has been president since 2013, is expected to run for re-election but has not yet formalized his candidacy. His government prevented prominent opposition figures from running for office.

Sources in Washington said the initial steps the United States would take would include significant but limited easing of sanctions and possibly removing some restrictions on Venezuela’s banking sector, adding that further easing would depend on whether Maduro would organize fair elections that meet international standards.

The United States could quickly follow up on the signing of the agreement between the government and the opposition through licenses related to oil businesses in Venezuela, two people in Washington familiar with the matter said, on condition of anonymity.

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Possibility of sanctions relief

The two sources said that any US action will not come until after an agreement under which Maduro adheres to the date of the presidential elections and lifts the ban imposed on opposition candidates.

A source in Washington said initial steps to ease sanctions could be announced within hours of Barbados signing if the United States is convinced that Maduro has fulfilled his commitment at this stage.

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

The US State Department celebrated the announcement of a return to the talks earlier on Monday but did not mention easing sanctions.

She added, “The United States will continue its efforts to unite the international community to support the negotiation process led by Venezuela.”

It was not immediately known whether US officials would attend the talks or announce them in Barbados.

The United States is aware that Maduro has failed to fulfill his previous commitments to hold free elections and is watching closely to ensure he complies with his latest promises, the sources said.

A source in Washington said that the agreement between the government and the opposition will include a date for elections in the latter half of next year and will allow international observers and the participation of opposition figures who are currently banned from holding office.

It is not yet clear whether the ban imposed on all opposition candidates will be lifted. The opposition considers the ban illegal.

Some opposition members said Monday they doubted Maduro would keep his promises. The two sides last met in November 2022.

The opposition is scheduled to hold primaries on Sunday to choose its candidate for 2024. María Corina Machado, the front-runner, is currently banned from holding any public office.

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Last week, Reuters reported, citing five sources, that Venezuela and the United States had made progress in talks in Qatar toward an agreement that could allow at least one additional foreign oil company to acquire Venezuelan crude oil to pay off debts if Maduro resumes negotiations with the opposition.

Two of those sources said that France’s Morel & Prom, a joint venture partner with Venezuela’s state-run oil company PDVSA, is a likely beneficiary of the US “comfort letter.” At the time, a Maurel & Prom spokesperson confirmed that the company had “submitted a request to this effect to the US authorities” but declined to go into detail.

The US letter of comfort would allow PDVSA’s partner to take Venezuelan oil for export as debt repayment or conclude an oil swap deal to settle outstanding debts and dividends.

US sanctions

The United States imposed sanctions on Venezuela to punish Maduro’s government following the 2018 elections, which Washington considered a sham. Since 2019, US sanctions have prevented PDVSA from exporting its oil to markets of its choice.

Trump’s sanctions, combined with diplomatic pressure, were intended to force Maduro to be ousted. Maduro and his government survived with the support of the military as well as China, Russia and Cuba.

The Biden administration is seeking ways to increase the flow of oil to global markets to mitigate rising prices resulting from sanctions imposed on Russia over its war in Ukraine, OPEC+ production cuts, and now fears an escalation of conflict in the Middle East.

But with no significant investment in Venezuela’s oil sector for more than a decade, any real increase in oil production will take time, according to analysts.

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The Biden administration has kept most sanctions in place in an attempt to force Maduro to take concrete steps toward holding free elections, viewing sanctions relief as an inducement and drawing criticism from opponents.

Attacking Biden’s energy policies, US Republican Senator John Barrasso said in a statement: “America should not beg for oil from socialist dictators or terrorists.”

The government and the opposition agreed last year to use three billion dollars in frozen assets to meet humanitarian needs, through a UN-managed fund that has not yet begun operating.

(Reporting by Maila Armas in Caracas, Matt Spetalnick in Washington, and Mariana Parraja in Houston – Preparing by Mohammed for the Arabic Bulletin) Writing by Julia Sims Cobb and Valentin Heller. Edited by David Gregorio and Sonali Paul

Our standards: Thomson Reuters Trust Principles.

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Since 2018, Mayela has been reporting for Reuters on Venezuela’s economy and general news from the capital, Caracas. She is particularly interested in covering the effects of the economic crisis in Venezuela and high inflation, especially in relation to the effects on the daily lives of people and families. She also writes about how the country’s finances are managed, as well as Venezuela’s main industries. Before joining Reuters, Maiella worked for local media outlets including Cronica Uno and El Universal, and also as a Caracas-based reporter for The Wall Street Journal. Contact: +58 424-1350265

He focused on energy sanctions, corruption and money laundering with 20 years of experience covering the oil and gas industries in Latin America. Born in Venezuela and based in Houston, she is the author of “Oro Rojo,” about the troubled Venezuelan state-run company PDVSA, and a mother of three.