Administration Needs More Effective Venezuela Sanctions Strategy, Lawmakers Say

“Our Venezuela policy over the last year and a half has been an unmitigated disaster,” Sen. Chris Murphy, D-Conn., said during an Aug. 4 Senate Foreign Relations Committee hearing, pointing to the lack of regime change. Sen. Bob Menendez, D-N.J., said the U.S. is on “autopilot … we cannot continue on the same course and expect to achieve different results.”

Elliott Abrams, the State Department’s special representative for Venezuela, defended the agency’s strategy, but said “it has not had the impact that you and the members of committee and all of us wanted it to have.” He added that the administration would welcome more authorities from Congress and more international pressure from allies. “We need more sanctions,” Abrams said. “This is a case where more is better, because they put more pressure on the regime.”

The administration has been active in enforcing Venezuela sanctions (see 2006180044, 2006020024, 2007290015, 2003310026 and 2003300013) and recently imposed restrictions on exports for military uses in Venezuela (see 2007020035). But trade and foreign policy experts have been critical of the U.S. sanctions strategy, saying it may not lead to regime change (see 1910240049 and 1908010020).

Abrams said the State Department and the Treasury Department are focused on sanctioning Venezuela’s mining and gold sector (see 1911190028), which the Maduro regime uses as a revenue source to trade with Russia, Iran, Cuba and China. Abrams said the two agencies are increasing sanctions enforcement of companies operating in that sector. “There's more of it now,” he said. “So we're stepping up our activities ... to go after every single case of that we can find.”

But Menendez said there is “growing evidence” that companies in Venezuela continue to illegally “purchase, sell and trade … a lot” of gold despite U.S. sanctions. Both Menendez and Committee Chairman James Risch, R-Idaho, said they would back legislation to “urge” the administration to increase designations and enforcement in that sector. “If you need statutory assistance regarding the illegal gold -- or oil, for that matter -- I think we're all in,” Risch said.

Other lawmakers advocated for more sanctions against countries supporting the Maduro regime. Sen. Jeanne Shaheen, D-N.H., said the U.S. should impose harsher sanctions on Turkey, saying Venezuela has established “numerous” shell companies in Turkey. She said one shell company was responsible for 8% of Venezuela’s oil exports in 2019.

“I know that a number of sanctions have been taken in response to illegal activities stemming from adversaries like Russia, Cuba and Iran,” Shaheen said. “Isn't there more that we should do to disrupt [Turkish] President [Recep Tayyip] Erdogan’s and Turkey’s support of Maduro?”

Abrams called Turkey’s support for Venezuela “a real problem,” adding that the State Department is considering possible sanctions. “We keep trying,” he said. “We and [the Office of Foreign Assets Control] keep going after companies as we find them.” Abrams said the U.S. has sanctioned over “1,000 different people and entities,” adding that “we are constantly trying to think: Who have we not reached out to? Who should we go back to? What have we not tried that we should? We all want this policy to work.”

Sen. Mitt Romney, R-Utah, said the U.S. should be doing more to convince China and Russia to abandon trade with Venezuela, including through incentives. “Are we so incapable of using soft power to get [China and Russia] to back away?” Romney said. Other lawmakers said more collaboration with allies would help.

“I hope that there's a more robust engagement with our international partners, because my personal sense of conversations I've had is that it's fraying,” Menendez said. “And I think we can ill afford that.”