US Sanctions Russian Oil Trading Firm for Role in Venezuela

February 18, 2020 Updated: February 18, 2020
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WASHINGTON—The Trump administration announced sanctions on Feb. 18 on a Russian state-controlled brokerage that has helped the Venezuelan government skirt an American oil embargo and enabled President Nicolas Maduro keep his grip on power in the South American country.

Administration officials said Rosneft Trading S.A. and its president, Didier Casimiro, would be added to a financial blacklist in a move that is expected to largely freeze him and the company out of the global financial system.

The action is an unusually strong move against a company linked to the Russian state and amounts to a substantial escalation of a U.S.-led campaign that has failed to oust Maduro from power.

Venezuelan President Nicolas Maduro
Venezuelan regime leader Nicolas Maduro gives a press conference at Miraflores presidential palace in Caracas, Venezuela, on Feb. 14, 2020. (Ariana Cubillos/AP Photo)

Secretary of State Mike Pompeo said Rosneft Trading is the primary broker for the sale and transportation of Venezuelan crude oil.

“Rosneft Trading has propped up the dictatorial Maduro, enabling his repression of the Venezuelan people,” he said in announcing the sanctions.

Rosneft Trading, based in Switzerland, was created in 2011 to facilitate trades on behalf of the parent company, which has been under U.S. sanctions since 2014, said Elliott Abrams, the special U.S. envoy for Venezuela.

The brokerage has helped arrange sales of Venezuelan crude by deceiving customers, mostly in Asia, about the source of the oil with such tactics as changing the name of the tanker, Abrams said.

Rosneft did not immediately respond to a request for comment.

But Russian lawmaker Pavel Zavalny said the country would continue to cooperate with Venezuela in the energy sector despite the U.S. sanctions. “One doesn’t abandon friends in need,” Zavalny said.

The United States and about 60 other countries say Maduro’s reelection in 2018 was not legitimate and have recognized opposition leader Juan Guaido as interim president.

The United States is considering additional economic sanctions “in the coming weeks and months” aimed at further tightening economic pressure on the Maduro government, the special U.S. envoy for Venezuela, Abrams told reporters at the State Department.

Maduro has held on to power despite runaway hyperinflation, a massive exodus and shortages of food and medicine and the international pressure that has left his socialist administration isolated.

Venezuela managed to ship hundreds of thousands of barrels of oil last year with the help of Rosneft Trading despite sanctions on its petroleum sector imposed by the Trump administration last year.

Juan-Guaido
Venezuela’s opposition leader Juan Guaido, who many nations have recognized as the country’s rightful interim ruler, speaks at a gathering in Caracas, Venezuela on Feb. 11, 2020. (Manaure Quintero/Reuters)

Opposition leader Juan Guaidó called the latest sanctions a “new victory!”

“Whoever supports the dictator, from whatever part of the world, will bear the consequences,” Guaidó tweeted. “Those who collaborate with democracy will be welcomed.”

Guaidó launched a campaign to oust Maduro a year ago but so far has failed to make it a reality. He has been unable to flip the military’s loyalty away from Maduro.

In recent months the Venezuelans who had fervently supported Guaidó early on had stopped filling the streets for demonstrations, and Maduro has grown emboldened.

The action against Rosneft Trading and Casamiro means that any assets they have in the United States or in the control of U.S. financial institutions will be frozen. In addition, anyone doing business with them could face American sanctions.

Abrams said that would largely freeze the company and its president out of the global financial system because people will be reluctant to take the risk after a 90-day period to wind down any relationship.

Officials also said that President Donald Trump approved the move. They said he has spoken with Russian President Vladimir Putin in the past about U.S. objections to his country’s support for Maduro.

Pompeo also discussed it with Foreign Minister Sergey Lavrov at a recent meeting.

By Ben Fox