What it is, what it isn't, and what will be its biggest impact.

Photo: PDVSA

Maduro’s ‘Anti-Blockade Law’ Explained

The “Anti-Blockade Constitutional Law for National Development and Guarantee of Human Rights” was finally published in the Official Gazette. How does it serve the regime and how does it affect Venezuela?

What’s a Constitutional law? Does that even exist?

No. The Venezuelan source of law system, which works like a pyramid, is clear. From top to bottom: Constitution, laws, regulations, administrative rulings, and court decisions. Laws, which are passed by the National Assembly, are subjected by definition to the Constitution, as described in Article 7 of the Magna Carta itself.

There’s historical precedent with the concept of constitutional law, however. German law scholar, Carl Schmitt, whose views served as judicial basis for Nazi rule, suggested that it was possible to pass constitutional laws in the context of a constituent processwhile the Constituent Assembly writes a new Constitution.

Since 2017, the National Constituent Assembly has been passing these “constitutional laws” (now including the Anti-Blockade Law), maybe to give the impression that those are superior laws, with a certain constitutional range, more important than those passed by the National Assembly. But in reality, under the 1999 Constitution, a “constitutional law” passed by the National Constituent Assembly is like a square-shaped circle. It can’t exist.

What are the main changes that this law brings?

Article 18 of this Anti-Blockade Law, for instance, grants the Executive Branch (Maduro and his ministers) the power to keep separate books for the income generated by the application of this law into the National Treasure. It isn’t clear yet what the government will interpret from this, but it seems like the intention is to withdraw said income from budgetary controls.

Article 19 gives the Executive Branch the power to render “inapplicable” any legal or sub-legal regulations “whose compliance becomes impossible or counterproductive as a result of any unilateral coercive measure, or any other restrictive or punitive measure.” Meanwhile, Article 21 is careful to point out that this “inapplicability” reaches regulations that approve or authorize acts. Therefore, the idea is to allow the signing of contracts without authorization by the National Assembly, or the creation of mixed companies in the oil sector of the economy without having to go through the National Assembly.

It’s very hard to find similar examples of measures that allow the Executive Branch the power to ignore regulations. This provision would shatter the complete judicial system that subjects the government to the law. It will be a case-study in Venezuela and foreign law schools of “normative” recognition of elimination of the Rule of Law. 

Article 28 gives the Executive Branch the power to modify the legal framework for the selection of contractors, more specifically in regards to the purchase of goods and services. Articles 37 through 44 establish rules about the confidentiality of administrative documents and limitations in the access to information, which makes it virtually impossible to access the files of acts and deals executed under this law. Almost 15% of the Articles in this law are confidentiality provisions.

Beyond the discussion of its legitimacy or legal purpose, what is the practical use for this law? How can it be put in practice?

If by applying the Anti-Blockade Law, Maduro’s regime orders administrative actions like, for example, granting contracts to a company or signing contracts with foreign or domestic investors, then this law, in practice, will start to cause certain real juridical effects, which could have financial consequences for the Venezuelan State.

The Maduro regime is in a hurry to establish a legal framework that will allow it to attract and/or close deals with public and private companies from allied countries.

Does the Anti-Blockade Law change the oil industry in terms of ownership? Is it a re-nationalization or re-privatization?

The Anti-Blockade Law slightly refers to the possibility of privatizing subsidiaries of PDVSA (Article 26)—although PDVSA itself should be off bounds, per Article 303 of the Constitution. It even mentions PDVSA’s subsidiaries in foreign countries. This might mean, in theory, that the entire set of national and foreign companies of the Venezuelan public oil holding could be privatized; except PDVSA itself, which would be left as a corporate carcass with no major assets or operations.

If Maduro’s plan was to take over the National Assembly (through the upcoming elections, for example) to legitimize certain oil deals, why does the National Constituent Assembly approve an Anti-Blockade Law that fulfills that very goal?

It seems like the Maduro regime is in a hurry to establish a legal framework that will allow it to attract and/or close deals with public and private companies from allied countries.

Can this instrument protect the investor from sanctions and retaliations in other countries?

It’s unlikely. On the contrary, those who close deals with Maduro’s government under the Anti-Blockade Law will be exposed to the current sanctions that limit and punish business with the regime.

There has been word on returning confiscated assets. Is this included in the Anti-Blockade Law?

Article 30 refers to the possibility of alliances with the private sector over assets under the state’s control as a result of some administrative or legal measures. Therefore,we could assume that the assets under control of the state because of confiscation policies can be used in alliances with the private sector. There’s no explicit mention of returning those assets to their original owners.

How does this law affect common citizens?

The impact would be very limited. Maybe the imported goods supply can increase with the Anti-Blockade Law. But this is really more focused on foreign investments in the oil and mining sectors.