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US PRESIDENT Donald Trump has imposed sweeping new sanctions on Venezuela, this time focused on the gold sector.
These latest sanctions aim to attack Venezuela’s gold production and trade and deny it hard currency to pay for the import of food and medicines.
Venezuela has extensive gold reserves, estimated as the second largest in the world. New gold-processing plants currently being installed to handle production from the country’s 32 gold fields are predicted to bring in about $5 billion in 2019.
The sanctions, illegal under international law, are part of the overall US strategy to bring about regime change. Its aim is to undermine and topple the elected government of President Maduro and secure control of Venezuela’s vast oil reserves and other natural resources.
In so doing, it would reassert its domination over the region against the challenge to its control posed by an independent sovereign Venezuelan state committed to regional unity.
US sanctions date from April 2015 following the presidential executive order a month earlier, permitting them on the bizarre grounds that Venezuela is a “rare and extraordinary threat to US national security and foreign policy.”
Following President Trump’s renewal of the 2015 executive order, further rounds of sanctions have been imposed throughout 2017 and into 2018, to put a chokehold on the Venezuelan economy. They have included blocking US investors from buying Venezuelan debt and prohibiting dealing in Venezuelan digital currencies.
The US sanctions form a key part of its strategic plan to ruin the economy, by blocking financial transactions — both payments and remittances — freezing Venezuela’s financial assets held externally and obstructing buying and selling operations, not only of the Venezuelan government and companies but also foreign business partners.
The calculated effect is to push the population towards mass migration or internal civil conflict, thus creating the conditions for a so-called “humanitarian intervention.”
The European Union has also voted to extend its sanctions against Venezuela for one year, but it has not included the gold trade within their scope.
In response to US and EU sanctions, the Venezuelan government has been seeking to regain control of its national reserves held abroad and to move away from US and dollar-controlled financial institutions by switching trading currencies to the euro, yuan or cryptocurrencies such as the petro.
It is also working to increase trade and secure credit lines with countries not aligned to the US, such as Russia and China. Its mined gold is now being sent to Turkey, not Switzerland, for refining, since it cannot rely on the latter government to return the refined gold, given the Swiss embargo on arms sales to Venezuela.
The Maduro government has cause for such caution. Sanctions have already frozen a clutch of Venezuelan bank accounts and assets and Britain may be providing another example.
The Times recently reported that the Bank of England is refusing to return gold bars worth about $550 million (£420 million) deposited for safe-keeping in its vaults. The report says that, unofficially, the bank has cited “standard” anti-money-laundering measures for the decision, although there is speculation that its decision is being influenced by the latest US sanctions.
Formally, the bank has independence from the British government in terms of how it carries out its responsibilities, but its governors cannot be unaware that the government has supported EU sanctions and has imposed its own separate arms embargo on Venezuela this year.
This year has also seen a hardening of the British government’s position towards Venezuela, moving away from a position acknowledging the necessity of dialogue and negotiations to address Venezuela’s difficulties. The change in tack has seen the government not recognising the May 20 presidential election result, despite international observers and a delegation from the Council of Electoral Experts from Latin America confirming the efficiency and total reliability of Venezuela’s election system.
Most recently, Minister of State for Europe and the Americas Alan Duncan used a speech to label Venezuela a “failed state” in which the elected Maduro government was engaged in “the systematic undermining of democracy.”
Foreshadowing, perhaps, a shift towards a more aggressive policy, he warned “the situation needs an intensification of outside pressure … We will continue to support the EU sanctions regime and indeed would consider fresh regimes in concert with our international partners. All options remain open.”
The minister’s language regrettably echoes that of Trump who stated in August 2017 that he would not “rule out the military option” against Venezuela.
A driving concern for British government policy in supporting US determination to bring the elected Maduro government to heel is revealed in Duncan’s comment that “the revival of the oil industry will be an essential element in any recovery and I can imagine that British companies like Shell and BP will want to be part of it.”
The task for solidarity work in Britain must be to oppose this reactionary agenda by both urging the British government and the EU to do all they can to facilitate and support dialogue in Venezuela and by opposing any external intervention attacking Venezuela’s national sovereignty.
Tim Young is on the executive of the Venezuela Solidarity Campaign.
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