Caracas Chronicles

Donald Trump and Barack Obama diverged strongly on many things, including their approach on dealing with some Latin American neighbors. The Obama administration’s plan of Cuban thaw was a core effort that lasted until his last weeks in office, which included the end of the “wet foot, dry foot” policy and reopening the U.S. embassy in Havana. Trump, once in office, rolled back some of those measures.

Venezuela, however, wasn’t such a point of divergence. The strong sanctions program against the Maduro regime started under Obama before it was expanded under Trump. Actually, Obama’s Executive Order 13692, issued on March 8th, 2015, has been used as recently as December 29th, 2020, under the Trump administration, to protect CITGO. With Joe Biden now in the Presidency, we’re going to see new developments in this story of pressure against the Venezuelan dictatorship.

What we don’t know is their extent and cost.

How the U.S. Sanctions Scheme Grew

We’ve all heard the Maduro regime branding sanctions as a tool of economic warfare, but this claim is only applicable to a fraction of actions taken only by the Trump administration; sanctions lie on a spectrum of potential damage, from pinpoint targeting of individuals to the embargo of entire countries. They’re meant to target bad actors, create international awareness and avoidance of such individuals, and cut them off from the financing they need to continue their activities. Actions throughout the Obama years and the first half of Trump’s administration centered on targeting individuals and affiliated companies that facilitated drug dealing, human rights violations, and the perpetuation of an authoritarian regime.

While lifting sanctions on cooperating officials may make sense even for a chance at free elections, it can provide fresh political ammunition for a Republican candidate in Florida in 2024, especially if negotiations fail.

One of the very first actions taken in this context came against Walid Makled, a drug dealer sanctioned by the United States, arrested in Colombia, and extradited to Venezuela during the Chávez years, eventually getting a jail sentence of 14 years in Venezuela. Later, while Venezuelans at home waited months for basic necessities to arrive in the form of CLAP boxes, the United States sanctioned Samark López, a businessman involved in the aforementioned food distribution network, who purchased and resided in a 16 million dollar mansion in Miami.

By 2018, the Trump administration had gone way beyond targeting companies or individuals, and aimed instead at the whole Venezuelan oil sector, including PDVSA. While American companies could file for exceptions, this decision unquestionably created obstacles for the exportation of Venezuelan oil and, in consequence, harmed the government’s ability to generate funds to feed the general population—and pay people to vote for the PSUV, or help some chavista purchases in Brickell Avenue, Miami. 

Can Sanctions Be Lifted in a Negotiation?

The typical causes to lift a sanction are death, legal challenges within the U.S., compliance with a set of U.S. demands, and coming to the negotiation table, as was recently the case with the Taliban in Afghanistan. However, there are several obstacles from theory to practice.

First, lifting sanctions is politically costly for an American president. Sanction-lifting is a less glamorous event than the initial sanctioning, with Treasury issuing a press release that’s not often accompanied by a press conference the way sanctions typically are. Names are listed, oftentimes with no explanation provided. While lifting sanctions on cooperating officials may make sense even for a chance at free elections, it can provide fresh political ammunition for a Republican candidate in Florida in 2024, especially if negotiations fail.

Chavismo knows how to navigate a so-called negotiation, with plenty of experience at false starts, so the game of carrot and stick may incentivize chavistas to just do as usual, if the simple act of showing up gets them what they want.

Second, chavismo knows how to navigate a so-called negotiation, with plenty of experience at false starts, so the game of carrot and stick may incentivize chavistas to just do as usual, if the simple act of showing up gets them what they want. Top ranking chavista officials may be incentivized to come to the negotiating table and do little else, simply so that they can tap existing American assets or initiate transfers into the country of assets or family. The Miraflores negotiations of 2014, the Dominican Republic negotiations in 2017, and attempts throughout recent years by the Vatican, former Spanish president Zapatero, Norway, and countless other groups backing both chavismo and the opposition have tried, and failed, to achieve something beyond getting both parties to show up, giving chavismo a way to let off steam from the domestic pressure cookers it creates. 2021 lacks the escalations of 2017-2019, with no street protests, no Oscar Pérez, tired Juan Guaidó, Leopoldo López in exile, and the yet again divided opposition. If the terms are defined by chavismo as a whole, and not by just one man (Maduro), then there’s hope for some high ranking officials to convince Maduro of a better future by leaving power. 

Third, the regime punishes those who try to reach agreements. If Janet Yellen’s Treasury Department tries a one-for-one sanction scheme for each target who’s unsanctioned to push for cooperation at a negotiation, then those who fall for it will be replaced by their non-cooperating counterparts. 

What Could the Biden Administration Do? 

Despite the Venezuelan government proving that more revenue doesn’t correlate with better quality of life for the people, the Biden administration is most likely to pull back from sector-broad, export-impacting sanctions and focus on the Walid Makleds and Samark Lopezes instead. Broad sanctions ran contrary to the Obama administration’s pinpoint approach, and they also ran contrary to the Cuban thaw, where travel, imports and exports were the first targets to ease tensions and normalize relations.

Thanks to both Obama and Trump, Biden has the most negotiating power any U.S. president has had to negotiate with Maduro through the potential lifting of sanctions.

President Biden has made it clear he would exchange sanctions relief in exchange for free and fair elections. In such an instance, beyond lifting oil sanctions, the Biden administration has over a hundred individuals they can incentivize to convince Maduro to negotiate and exit through an election. Venezuela has a total of 333 current sanctions, 141 of which target individuals. The Cuban sanctions program, in contrast, has 82 targets, only five of which are on individuals. 

Future sanctions will follow the existing methodology, typically targeting the highest echelons of power: president, ministers, and military leaders. High profile incidents, however, will lead to exceptions; for example, the July 2017 attack on the National Assembly resulted in the sanctioning of a brigadier general, a class below three higher ranks within the Army. Bladimir Lugo, having failed to protect the National Assembly, was sanctioned out of 2,000 other generals with his ranking or higher. Sanctioning him suggests that the U.S. cares strongly about isolated, high profile incidents. This sort of tailored, creative approach has been present in other instances, such as the United States’ lack of sanctions against Diosdado Cabello while other alleged high-ranking drug dealers were sanctioned, such as Tareck El-Aissami.

Officials of the Maduro government have been rewarded in high profile events for being sanctioned, so the Biden administration shouldn’t be expected to publicly define thresholds in exchange for removing them. Rather, the removal of sanctions will likely be a low-profile occurrence for Venezuelan officials that takes place following negotiations, assuming they’re successful or prove fruitful in a lesser, but still meaningful way. The lifting of oil sanctions could be perceived as a given by the Maduro regime, given Biden’s rhetoric of wanting to narrow the scope of sanctions, yet there will likely be the expectation of at least getting to the negotiation table in exchange, so Biden isn’t portrayed as giving a freebie to a dictator. 

While sanctions have proved effective in punishing Venezuelan officials with existing U.S. assets, broader targeting can feed into Maduro’s false claim that the United States is responsible for the crisis in Venezuela. Thanks to both Obama and Trump, Biden has the most negotiating power any U.S. president has had to negotiate with Maduro through the potential lifting of sanctions. The precedent set during the Obama years should mean further sanctioning of individuals personally responsible for the country’s crisis; broader sanctions should be loosened, as Anthony Blinken, the new Secretary of State, told Senator Marco Rubio the day before Biden’s inauguration: “Maybe we need to look at how can we more effectively target the sanctions that we have, so that regime enablers really feel the pain.”