Published: Wed, January 30, 2019
Markets | By Erika Turner

China, Russia opposes unilateral sanctions against Venezuela

China, Russia opposes unilateral sanctions against Venezuela

The United States imposed sanctions on Venezuela's state oil company PDVSA on Monday in the latest effort to ramp up pressure on the country's President Nicolas Maduro.

In response, US national security adviser John Bolton warned of "serious consequences for those who attempt to subvert democracy and harm Guaido", in a tweet that described Saab as the "illegitimate former Venezuelan Attorney General".

Juan Guaido, Venezuelan opposition leader and parliament speaker, whose appointment to that position had been cancelled by the country's Supreme Court, declared himself interim president at a rally in the country's capital of Caracas on January 23.

Inside Venezuela, Maduro holds the reins of power with the armed forces still loyal despite an opposition push to lure their support by proposing amnesty for anybody who supports Guaido's transitional government.

Last week, US Secretary of State Mike Pompeo signed off on the order for Guaido to control holdings in the Federal Reserve Bank of NY and federally insured banks, the State Department said.

The United States has been pressing all countries to part ways with President Nicolas Maduro, a leftist firebrand presiding over a crumbling economy and rising street protests, and recognize Guaido, the head of the National Assembly.

That all changed on Monday when the US Treasury department announced sanctions on PDVSA, the state oil monopoly. He cited Washington's sweeping sanctions on Venezuela's state oil firm, a move the Kremlin has called illegal. That's because Venezuela's oil shipments to China and Russian Federation are usually taken as repayment for billions of dollars in debts.

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Top officials in the Trump administration - including the president himself - say "all options are on the table" as speculation swirls over whether the U.S.is planning to take military action in the embattled country.

Maduro has accused the United States of leading an open coup against him to exploit Venezuela's oil reserves, the largest in the world.

But Venezuela is very reliant on the US for its oil revenue.

Meantime, the USA sanctions make a default on PDVSA's 2020 notes, the one bond Venezuela has continued to service while skipping more than $9 billion in payments, all but guaranteed, according to Francisco Rodriguez, the chief economist at Torino Capital in NY.

Foreign Ministry spokesman Geng Shuang said historical experience showed foreign interference "only makes situations more complicated".

Guaido said on Monday that the USA maneuver would stop Maduro from emptying the "coffers" if he is removed from office.

Mnuchin said that Citgo would be able to continue to operate but won't be allowed to remit money to the Maduro regime.

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