Trump slaps new sanctions on Venezuela

Trump slaps new sanctions on Venezuela
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President Trump levied a new set of economic sanctions on Venezuela Friday in an attempt to exclude the country’s government from U.S. financial markets

The new sanctions ban Americans from “participating in [President Nicolás] Maduro's liquidation of the Venezuelan economy,” said a senior administration official.

The sanctions cover an array of financial activities, banning Americans from acquiring new Venezuelan debt and Maduro's government from receiving profits from U.S.-based companies.

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The new sanctions will block CITGO, an American oil company with more than $32 billion in yearly revenue, from sending profits to its corporate owner, state-owned Venezuelan oil company Petróleos de Venezuela.

But the sanctions avoided blocking secondary markets from trading Venezuelan securities and carved out licenses for U.S.-owned Venezuelan debt.

“There will be a general license that carves out specific debt owned by U.S. entities,” Treasury Secretary Steven MnuchinSteven Terner MnuchinTop economic adviser warned Trump on reelection chances ahead of China truce: report The Hill's Morning Report - Tempers boil over at the White House Schumer seeks focus on health care amid impeachment fever MORE said at a White House press briefing Friday.

Tensions between the United States and Venezuela have been on the rise. Trump earlier this month even suggested that military action could be taken in the country.

National security adviser H.R. McMaster, speaking at the White House on Friday, said no military actions are anticipated in the near future.

“This order demonstrates more clearly than ever that the United States will not allow an illegitimate dictatorship to take hold at the expense of its people,” said McMaster. “Through the president's strong action the United States will target the means which the dictatorship to enrich the corrupt regime insiders and perpetuate this repressive behavior.”

The Treasury Department had already sanctioned 13 Venezuelan officials ahead of an election called by Maduro to elect a “National Constitutional Assembly.”

Despite the sanctions, Maduro went ahead with the election and named the Constitutional Assembly, which last week claimed absolute legislative powers.

The Treasury sanctioned eight more officials earlier this month after the election.

The United States and its Latin American allies condemned the election and the Constitutional Assembly, arguing it was a power-grab designed to take power away from the National Assembly, the country's unicameral parliament.

But that coalition was weakened earlier this month, when Trump threatened possible military action against Maduro, forcing the Venezuelan opposition and Latin American countries to speak out against the threat.

The sanctions did not target CITGO's domestic operations themselves, although officials said that could change if a Rosneft, a Russian-owned oil company that's listed been sanctioned itself, takes control of a majority stake in CITGO.

Rosneft owns 49.9 percent of CITGO as collateral for a $1.5 billion Russian loan to Venezuela.

The two countries have discussed swapping that collateral for oilfield stakes and a fuel supply agreement, reported Reuters last month.

According to administration officials, the sanctions were designed to prevent Venezuelan officials from profiting from the U.S. financial system, while avoiding further damaging the Venezuelan economy.

“We view that this will have a significant impact and in no way will they hurt the American economy and financial markets,” said Mnuchin.