By Dhruvi shah
Executive Order was signed by Barr on Friday and made public on Saturday. This order of an executive nature established a declaration of a ‘National Emergency’ under the provisions of the 1977 International Emergency Economic Powers Act and the 1976 National Emergency Acts.
This Executive Order prohibits any form of legal “attachment, judgment, decree, lien, execution, garnishment or other judicial process” against the funds designated by the White House as belonging to the ‘Foreign Government Deposit Fund’, including funds accumulated through the sale of Venezuelan oil and diluents deposited in the custody of the US where they are retained as ‘sovereign property’ owned by the Republic of Venezuela and intended to be used to assist the US in its pursuit of its foreign policies.
President Trump’s Administration contends that should either the courts or creditors be permitted to seize these assets, it will interfere with the United States’ ability to aid in the creation of ‘peace, prosperity and stability’ within Venezuela and also potentially have a negative impact on other critical foreign policy interests in Latin America. To protect these assets is critical to ensuring that oil revenues are used to build political and economic stability.
The announcement follows a recent military operation by U.S. forces that led to the arrest of Venezuelan President Nicolás Maduro in Caracas. This military action has raised serious concerns and questions about the legality of this type of action by a country as powerful as the United States. Since the time of Maduro’s arrest, the United States has been negotiating with Venezuela’s interim government to purchase approximately 50 million barrels of crude oil from them. This oil will be shipped to the United States, where it can be refined in U.S.-based refineries that specialise in heavy crude oil.
U.S. oil companies have had substantial business interests in Venezuela for many years, but most of them exited Venezuela after the Venezuelan government nationalised their assets nearly two decades ago, and they collectively are owed many billions of dollars. For instance, ConocoPhillips has identified $12 billion in claims against the Venezuelan government as a result of the expropriations that took place during that time. The executive order signed by President Trump does not specifically name any companies but instead makes it clear that companies will not be compensated for their past losses through future policies or actions. President Trump told the CEO of ConocoPhillips that the company will be repaid but cautioned him against making any assumptions based upon that assurance.
The meeting between Trump and the oil executives will allow a potential investment of up to $100 billion into Venezuela’s oil industry, but this plan has received mixed responses from the oil industry.
Critics believe the executive order makes it impossible for Venezuela’s creditors to make legal claims to Venezuelan assets and could harm established international law concerning sovereign debt and property rights. Supporters of the plan argue the order would maintain U.S. leverage over events currently taking place in Venezuela. The results of the evolving situation for those who hold Venezuelan debt or are involved with oil businesses with interests in Venezuela or for U.S. foreign policy are currently unknown.