President Trump is exempting Citgo Petroleum Corp., owned by Venezuela’s government, from the financial sanctions imposed Friday on the country.
The latest set of sanctions is meant to punish the government of President Nicolás Maduro as it moves to rewrite the country’s constitution and consolidate his power. To that end, the sanctions seek to exclude the Venezuelan government from the United States’ economy, including its markets and capital, and to make sure the U.S. does not assist the Maduro government.
But Citgo, an oil refiner, retailer and transporter based in the United States and owned by the government’s Petróleos de Venezuela, will get to operate largely as normal.
The White House statement announcing the sanctions framed the Citgo exemption as an attempt “to mitigate harm to the American and Venezuelan people.”
Petroleum imports and exports are also exempt, a nod to the significant petroleum trade between the United States and Venezuela.
“We are issuing general licenses permitting transactions that would otherwise be prohibited under the executive order,” Treasury Secretary Steven Mnuchin
Steven Terner MnuchinOn The Money: Stocks have worst week in a decade on coronavirus fears | Fed chief hints at rate cut | Trump pushes central bank for action | Kudlow advises investors to 'think about buying the dip' Warren asks administration for assurances that sanctions aren't hindering coronavirus containment in Iran IRS releases data through first four weeks of tax-filing season MORE told reporters Friday.
“These include a 30-day wind-down period, the financing for humanitarian goods to Venezuela and certain dealings in specific debt instruments that trade on secondary markets, and certain dealings with U.S. entities owned or controlled by the government of Venezuela. Also, the executive order carves out short-term financing for most commercial trade, including the export and import of petroleum.”
Nonetheless, Citgo will not be allowed to send profits to its Venezuelan parent.
Citgo and the White House did not respond to requests for comment about the exemption.
Citgo has three lobbying firms on retainer, including Avenue Strategies, which has ties to the Trump administration.
The company hired the firm — founded by former Trump campaign advisers, including Barry Bennett — in April to press the administration on the “potential impact of U.S. energy and foreign policy restrictions on CITGO Petroleum Corporation's operations and valuation of assets,” according to paperwork the firm filed with Congress.
A subsequent disclosure form shows Citgo paid Avenue Strategies $80,000 through June and that Bennett lobbied the White House, the Energy Department, the Justice Department and the Treasury Department, which houses the unit that ultimately imposes sanctions.
In the first half of the year, Citgo spent $900,000 on lobbying, with the lion’s share going to Democratic operative Manuel Ortiz of VantageKnight, a shop he formed after leaving top K Street firm Brownstein Hyatt Farber Schreck. Ortiz, who earned $540,000 in the first six months of 2017 from the oil giant, has represented Citgo since 2014, according to federal forms.
Cornerstone Government Affairs is also on retainer, taking in $280,000 from July through June.
A senior administration official said that officials are also watching out for whether Rosneft, Russia’s state oil company, takes a significant stake in Citgo, which Venezuela put up as collateral for a loan from Russia.
Such a transaction, or trading that collateral for an interest in Citgo assets, could trigger new action against the company since Rosneft is already subject to United States sanctions, the official told reporters.
A group of Republican senators along the Gulf Coast cautioned Trump against punishing Venezuela’s oil sector earlier this month, warning of its impact on the United States’ refining industry.
“Oil refineries along the U.S. Gulf Coast that process the heavier grades of Venezuelan crude represent a significant portion, nearly 10 percent, of U.S. imports,” wrote Sens. Bill Cassidy
William (Bill) Morgan CassidyOvernight Health Care — Presented by American Health Care Association — California monitoring 8,400 people for coronavirus | Pence taps career official to coordinate response | Dems insist on guardrails for funding Top Trump advisers discuss GOP need to act on health care at retreat with senators The Hill's Morning Report — AG Barr, GOP senators try to rein Trump in MORE (La.), John Cornyn
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