Venezuela Venezuela: Background and U.S. Relations August 26, 2020 Venezuela remains in a deep crisis under the authoritarian rule of Nicolás Maduro of the United Socialist Party of Venezuela. Maduro, narrowly elected in 2013 after the death of Clare Ribando Seelke, Hugo Chávez (president, 1999-2013), began a second term on January 10, 2019, that is Coordinator widely considered illegitimateil egitimate. Since January 2019, Juan Guaidó, president of Venezuela's democratically Specialist in Latin Venezuela’s democratical y elected, opposition-controlled National Assembly, has American Affairs sought to form a transition government to serve until internationallyinternational y observed elections can be held. The United States and 57 other countries recognize Guaidó as interim Rebecca M. Nelson president, but he has been unable to harness that diplomatic support to wrest Maduro Specialist in International from power. Trade and Finance Venezuela’president, but he has been unable to wrest Maduro from power and has faced increased danger since returning home from a January-February 2020 tour, which included a meeting with President Trump. Some observers believe that National Assembly elections due this year might start an electoral path out of the current stalemate.

Venezuela's economy has collapsed. The country is plagued by hyperinflation, severe Phillip Brown shortages of food and medicine, and a dire humanitarian crisis. In April 2019, United Nations officials estimated that 90% of Venezuelans were living in poverty. Maduro has blamed U.S. sanctions for these problems, but that has further Specialist in Energy Policy deteriorated in 2020 as a result of gasoline shortages, an outbreak of Coronavirus Disease 2019 (COVID-19), and strengthened U.S. sanctions. Maduro has blamed U.S. Rhoda Margesson sanctions for the economic crisis, but many observers cite economic mismanagement Acting Section Research observers cite economic mismanagement and corruption foras the crisismain factors. U.N. agencies estimate that 4.8 million Venezuelans had5.1 mil ion Venezuelans Manager have fled the country as of FebruaryAugust 2020, primarily to neighboring countries.

U.S. Policy

Since recognizing the Guaidó government in January 2019, the United States has coordinated its efforts with Interim President Guaidó. U.S. strategy has emphasized diplomatic efforts to bolster support for Guaidó; targeted sanctions and visa revocations to increase pressure on Maduro officials, along with; broader sanctions on the state oil company and company, other state-controlled companies and institutions, and the government; and humanitarian aid ($472 million 534 mil ion to countries sheltering Venezuelans and $56 million 76 mil ion for Venezuela from FY2017-FY2019 through May 2020). In October 2019, the U.S. Agency for International Development (USAID) signed an agreement with the Guaidó government enabling the provision of development assistance and increased democracy and human rights assistance. After announcing sanctions on a subsidiary of Rosneft (Russia's state oil company), which has transported Venezuela's oil, U.S. officials vowed to keep "maximum pressure"assistance. In 2020, the Administration has sanctioned companies that have transported Venezuelan oil and seized Venezuela-bound ships carrying Iranian petroleum products in violation of sanctions. U.S. officials have vowed to keep “maximum pressure” on Maduro and his foreign backers until he agrees to allowal ow a transition government to convene free and fair legislative and presidential elections.

Congressional Action

Congress has supported the Administration'’s efforts to support a restoration of democracy in Venezuela andwithout U.S. military intervention in the country and to provide humanitarian support to Venezuelans, although some Members have expressed concerns about the humanitarian impact of sanctions. In FebruaryDecember 2019, Congress 2019, Congress enacted P.L. 116-6, which provided $17.5 million in FY2019 assistance for democracy programs in Venezuela. In December 2019, Congress enacted P.L. 116-94, , which appropriates $30 millionmil ion in FY2020 assistance for democracy programs in Venezuela and incorporates the Senate-reported version of the VERDAD Act (S. 1025), a comprehensive bill bil to address the crisis in Venezuela. The VERDAD Act incorporated House-passed measures authorizing FY2020 humanitarian aid to Venezuela ( (H.R. 854), restricting the export of defense articles to Venezuela (H.R. 920), and requiring a U.S. strategy to counter Russian influence in Venezuela ( (H.R. 1477). The Administration's FY2021 budget request proposes $200 million in democracy aid aimed to support a democratic transition in Venezuela and $5 million in global health assistance. ). In December 2019, Congress also enacted P.L. 116-92, which prohibits federal contracting with persons who do business with the Maduro government. In July 2019, the House passed H.R. 549, designating Venezuela as a beneficiary country for temporary protected status. On July 30, 2019status; however, a Senate effort to pass H.R. 549 by unanimous consent failed.

For FY2021, the Administration requested $200 mil ion in democracy aid aimed to support a democratic transition in Venezuela and $5 mil ion in global health assistance; the House-passed version of the measure (H.R. 7608, H.Rept. 116-444) would provide $30 in democracy aid for Venezuela and support the provision of Congressional Research Service Venezuela: Background and U.S. Relations additional aid if a democratic transition occurs. The House-passed version of the FY2021 National Defense Authorization Act (H.R. 6395, H.Rept. 116-442) would require a report on the crises in Venezuela and its impacts on U.S. and regional security. Also see CRS In Focus IF10230, Venezuela: Political Crisis and U.S. Policy; CRS In Focus IF10715, Venezuela: Overview of U.S. Sanctions. Congressional Research Service link to page 6 link to page 7 link to page 7 link to page 8 link to page 11 link to page 12 link to page 15 link to page 16 link to page 17 link to page 19 link to page 20 link to page 20 link to page 21 link to page 22 link to page 23 link to page 26 link to page 27 link to page 29 link to page 30 link to page 31 link to page 31 link to page 34 link to page 34 link to page 35 link to page 37 link to page 38 link to page 39 link to page 40 link to page 40 link to page 41 link to page 42 link to page 7 link to page 16 link to page 20 link to page 30 link to page 33 link to page 36 Venezuela: Background and U.S. Relations Contents Introduction ................................................................................................................... 1 Political Situation............................................................................................................ 2 Legacy of Hugo Chávez: 1999-2013............................................................................. 2 Maduro Government: 2013-2018 ................................................................................. 3 Interim President Recognized But Maduro Stil in Power, 2019-Present ............................. 6 Human Rights ................................................................................................................ 7 Economic Crisis............................................................................................................ 10 Maduro Government Policy Responses ....................................................................... 11 New Economic Chal enges in 2020 ............................................................................ 12 Humanitarian Situation and Response .............................................................................. 14 Displacement .......................................................................................................... 15 Coronavirus Disease 2019......................................................................................... 15 International Humanitarian Response in Venezuela ....................................................... 16 International Humanitarian Response in the Region ...................................................... 17 International Actors in Venezuela’s Crisis ......................................................................... 18 U.S. Policy................................................................................................................... 21 U.S. Sanctions on Venezuela ..................................................................................... 22 Petroleum Sector Concerns and U.S. Economic Sanctions ............................................. 24 Limitations on Financial Access ........................................................................... 25 U.S.-Venezuela Petroleum Trade........................................................................... 26 Venezuela Petroleum Trade with Non-U.S. Entities ................................................. 26 U.S. Assistance ....................................................................................................... 29 Humanitarian Assistance (Including COVID-19 Assistance) ..................................... 29 Democracy, Development, and Global Health-Related Assistance .............................. 30 U.S. Efforts to Combat Il icit Revenue Sources ............................................................ 32 Counternarcotics and U.S. Antidrug Prosecutions and Operations .............................. 33 Money Laundering and Asset Forfeiture ................................................................ 34 Il egal Mining .................................................................................................... 35 Human Trafficking ............................................................................................. 35 U.S. Concerns About Terrorism ................................................................................. 36 Outlook ....................................................................................................................... 37 Figures Figure 1. Political Map of Venezuela .................................................................................. 2 Figure 2. Venezuela’s Gross Domestic Product .................................................................. 11 Figure 3. Venezuelan Migrants and Asylum Seekers: Flows to the Region and Beyond ............ 15 Figure 4. Venezuela Crude Oil Production and U.S. Imports ................................................ 25 Figure 5. Venezuela Crude Oil Exports ............................................................................. 28 Tables Table 1. U.S. Foreign Assistance to Venezuela by Account: FY2017-FY2021 Request ............. 31 Congressional Research Service link to page 46 link to page 43 link to page 46 link to page 46 Venezuela: Background and U.S. Relations Table B-1. Online Human Rights Reporting on Venezuela ................................................... 41 Appendixes Appendix A. Legislative Initiatives in the 116th Congress .................................................... 38 Appendix B. Online Human Rights Reporting on Venezuela ................................................ 41 Contacts Author Information ....................................................................................................... 41 Congressional Research Service Venezuela: Background and U.S. Relations Introduction Venezuela, long one of the most prosperous countries in South America with the world’s largest proven oil reserves, continues to be in the throes of a deep, multifaceted crisis. Overview of U.S. Sanctions; CRS In Focus IF11216, Venezuela: International Efforts to Resolve the Political Crisis; CRS Report R46213, Oil Market Effects from U.S. Economic Sanctions: Iran, Russia, Venezuela.

Venezuela, long one of the most prosperous countries in South America with the world's largest proven oil reserves, continues to be in the throes of a deep political, economic, and humanitarian crisis. On January 10, 2019, MaduroOn January 10, 2019, Nicolás Maduro of the United Socialist Party of Venezuela (PSUV) took office for a second term after winning an election in May 2018 that was deemed illegitimate deemed il egitimate within Venezuela and by the United States and more than 50 other countries. Maduro has resisted domestic and international pressure to leave office in favor of the president of the National Assembly, Juan Guaidó. The United States and 57 other countries have recognized Guaido as interim president and support a plan to create a transition governmentleave office and allow an interim government led by Juan Guaidó, reelected in January 2020 as president of the National Assembly, to serve until free and fair elections can be convened.¹1 Since returning from an international tour in February 2020 from a February 2020 international tour, which included a White House meeting with President Donald Trump, Guaidó has been unable to harness his diplomatic support domestical y. Maduro is seeking to convene new National Assembly elections in Venezuela at a Glance December 2020; many observers maintain that Population: 27.5 mil ion (2019 est., IMF) such a vote wil not meet international Area: 912,050 square kilometers (slightly more than standards and most opposition parties plan to twice the size of California) boycott the vote. GDP: $70.1 bil ion (2019, current prices, IMF est.) GDP Growth: -18% (2018, IMF est.); -35% (2019, IMF Guaidó has sought to unify the opposition behind efforts to ensure that elections held in 2020 are free and fair. Guaidó and his supporters are facing increasing harassment by the Maduro government. (See "Interim President Recognized, but Maduro Still in Power, 2019-Present," below.)

U.S. relations with Venezuela, a major oil U.S. relations with Venezuela, a major oil est.) supplier, deteriorated under the Hugo Chávez GDP Per Capita: $2,548 (2019, current prices, IMF government (1999-2013), which undermined est.) human rights, the separation of powers, and Key Trading Partners: Exports—U.S.: 35.2%, India: freedom of expression. U.S. concerns have 21.4%, China: 15.2%. Imports—U.S.: 51.5%, China: deepened as the Maduro government has 15.7%, Brazil: 13.8% (2019, EIU) manipulated democratic institutions; cracked Unemployment: 44.3% (2019, IMF) down on the opposition, media, and civil Life Expectancy: 74.7 years (2017, UNDP) society; engaged in drug trafficking and Literacy: 97.1% (2016, UNDP) corruption; and refused most humanitarian aid. Legislature: National Assembly (unicameral), with International efforts to find a political solution 167 members; National Constituent Assembly, with to the crisis have stal ed. The Trump 545 members (United States does not recognize) Administration has vowed to continue Sources: Economist Intel igence Unit (EIU); exerting pressurehuman rights, the separation of powers, and freedom of expression. U.S. concerns have deepened as the Maduro government has manipulated democratic institutions; cracked down on the opposition, media, and civil society; engaged in drug trafficking and corruption; and refused most humanitarian aid. With international efforts to find a political solution to the crisis stalled, the Trump Administration has asserted its intention to exert "maximum pressure" on Maduro until he agrees to leave office or to convene free and fair legislative and presidential elections.² U.S. sanctions on a Rosneft subsidiary that has helped the Maduro government avoid oil sanctions were announced in February 2020 and could be the first of additional secondary sanctions.

Figure 1. Political Map of Venezuela

Source: Congressional Research Service (CRS).

on Maduro until he agrees to International Monetary Fund (IMF); United Nations Development Programme (UNDP). leave office and to maintain support for Interim President Juan Guaidó regardless of the legislative election results.2 This report provides an overview of the overlapping political, economic, and humanitarian crises in Venezuela, followed by an overview of U.S. policy toward Venezuela. 1 In the absence of an elected president, the Venezuelan Congress’s president must become acting president of a transition government until elections can be called. Constitution of the Bolivarian Republic of Venezuela, 1999, as amended by Amendment No. 1 of 15 February 2009, Article 233, translation by the Ministry of Communication and Information of the Bolivarian Republic of Venezuela, 2010. 2 U.S. Department of State, “Briefing with Special Representative for Venezuela Elliott Abrams on Recent Developments in U.S.-Venezuela Policy,” July 28, 2020. Congressional Research Service 1 Venezuela: Background and U.S. Relations Figure 1. Political Map of Venezuela Source: Congressional Research Service (CRS). Political Situation Political Situation

Legacy of Hugo Chávez: 1999-2013³

20133 Venezuela had one of the most stable political systems in Latin America from 1958 until 1989. After that period, however, numerous economic and political challengeschal enges have plagued the country. In 1989, then-President Carlos Andres Pérez initiated an austerity program that fueled riots in which several hundred people were killedkil ed. In 1992, two attempted military coups threatened the Pérez presidency, —one led by Hugo Chávez. Chávez, for which he served two years in prisonprison for a failed coup attempt. In May 1993, the legislature dismissed Pérez from office for misusing public fundscorruption. The election of former President Rafael Caldera (1969-1974) as president in December 1993 brought a measure of political of stability, but the government faced a severe banking crisis. A rapid decline in the world price of oil caused a recession, which contributed to Hugo Chávez'’s landslide 1998 election victory. Most observers attribute Chávez's rise to power to Venezuelans' rejection of the country's two traditional parties, Democratic Action (AD) and the Social Christian party (COPEI), which were judged to have squandered the country's oil wealth.

Under Chávez, Venezuela 3 CRS Report R42989, Hugo Chávez’s Death: Implications for Venezuela and U.S. Relations, by Mark P. Sullivan; CRS Report R43239, Venezuela: Issues for Congress, 2013-2016, by Mark P. Sullivan. Congressional Research Service 2 Venezuela: Background and U.S. Relations Under Chávez, Venezuela adopted a new constitution (ratified by plebiscite in 1999), a new unicameral legislature, and a new name for the country—the Bolivarian Republic of Venezuela, named after the 19^th19th century South American liberator Simón Bolívar. Buoyed by windfall windfal profits from high oil pricesfrom increases in the price of oil, the Chávez government expanded the state'’s role in the economy. Chávez's ’s charisma, use of oil revenue to fund domestic social programs and provide subsidized oil to Cuba and other Central American and Caribbean countries, and willingnesswil ingness to oppose the United States captured global attention.

After Chávez's death, his Chávez’s legacy has been debated. President Chávez established an array of social programs and services known as missions that helped reduce poverty by some 20% and improve literacy and access to health care.⁴ 4 Nevertheless, his presidency was "“characterized by a dramatic concentration of power and open disregard for basic human rights guarantees," especially” especial y after his brief ouster from power in 2002.⁵5 Declining oil production, combined with massive debt and high inflation, have shown the costs of Chávez’costs involved in Chávez's failure to save or invest past oil profits, tendency to take on debt and print money, and decision to fire thousands of technocrats after an oil workers'’ strike in 2002-2003.

Venezuela' Venezuela’s 1999 constitution, amended in 2009, centralized power in the presidency and established five branches of government rather than the traditional three branches.⁶6 Those branches include the presidency, a unicameral National Assembly, a Supreme Court, a National Electoral Council (CNE), and a “Citizen Power” oversight branchElectoral Council (CNE), and a "Citizen Power" branch (three entities that ensure that public officials at all levels adhere to the rule of law and that can investigate administrative corruption). The president is elected for six-year terms and can be reelected indefinitely; however, he or she also may be made subject to a recall recal referendum (a process that Chávez submitted to in 2004 and survived but Maduro cancelled cancel ed in 2016). Chávez exerted influence over all al the government branches, particularly after an outgoing legislature dominated by chavistas appointed pro-Chávez justices to control the Supreme Court in 2004 (a move that Maduro's allies’s al ies would repeat in 2015).

In addition to voters having the power to remove a president through a recall recal referendum process, the National Assembly has the constitutional authority to act as a check on presidential power.7 Maduro Government: 2013-20188 After Chávez’s death in March 2013, Venezuela held presidential elections in April. Acting President Nicolás Maduro defeated Henrique Capriles of the Democratic Unity Roundtable (MUD) of opposition parties by 1.5%. The opposition al eged significant irregularities and protested the outcome; Maduro sought to consolidate his authority. Security forces and al ied civilian groups violently suppressed protests and restricted freedom of speech and assembly. In 2014, 43 people died and 800 were injured in clashes between pro-Maduro forces and student-led 4 Daniel Hellinger and Anthony Petros Spanakos, “T he Legacy of Hugo Chávez,” Latin American Perspectives, vol. 44, no. 1, January 2017, pp. 4-15. 5 Although President Chávez remained widely popular until mid-2001, his standing eroded afterward amid growing concerns by some that he was imposing a leftist agenda on the country. In April 2002, massive protests and pressure by the military led to the oust ing of Chávez from power for less than three days. He ultimately was restored to power by the military after an interim president alienated the military and the public by taking hard-line measures, including the suspension of the constitution. Human Rights Watch, “ Venezuela: Chávez’s Authoritarian Legacy,” March 5, 2013. 6 Antonio Ramirez, “An Introduction to Venezuelan Governmental Institutions and Primary Legal Sources,” New York University Law School Library, May 2016. 7 T he National Assembly consists of a unicameral Chamber of Deputies with 167 seats whose members serve for five years and may be reelected once. With a simple majority, the legislature can approve or reject the budget and the issuing of debt, remove minist ers and the vice president from office, overturn enabling laws that give the president decree powers, and appoint the five members of the CNE (for 7 -year terms) and the 32 members of the Supreme Court (for one 12-year term). With a two-thirds majority, the assembly can remove judges, submit laws directly to a popular referendum, and convene a constitutional assembly to revise the constitution. 8 See also CRS Report R43239, Venezuela: Issues for Congress, 2013-2016, by Mark P. Sullivan. Congressional Research Service 3 Venezuela: Background and U.S. Relations Assembly has the constitutional authority to act as a check on presidential power. The National Assembly consists of a unicameral Chamber of Deputies with 167 seats whose members serve for five years and may be reelected once. With a simple majority, the legislature can approve or reject the budget and the issuing of debt, remove ministers and the vice president from office, overturn enabling laws that give the president decree powers, and appoint the five members of the CNE (for seven-year terms) and the 32 members of the Supreme Court (for one 12-year term). With a two-thirds majority, the assembly can remove judges, submit laws directly to a popular referendum, and convene a constitutional assembly to revise the constitution.

Maduro Government: 2013-2018⁷

After Chávez's death in March 2013, Venezuela held presidential elections in April. Acting President Nicolás Maduro defeated Henrique Capriles of the Democratic Unity Roundtable (MUD) of opposition parties by 1.5%. The opposition alleged significant irregularities and protested the outcome; Maduro sought to consolidate his authority. Security forces and allied civilian groups violently suppressed protests and restricted freedom of speech and assembly. In 2014, 43 people died and 800 were injured in clashes between pro-Maduro forces and student-led protesters concerned about rising crime. Maduro imprisoned opposition figures, including Leopoldo López, head of the Popular Will (VP) party, who was sentenced to more than 13 years in prison for allegedlyWil (VP) party, for al egedly inciting violence. In February 2015, the government again cracked down.

Nicolás Maduro In the December 2015 legislative elections, the MUD captured a two-thirds majority in Venezuela's National Assembly—a major setback for Maduro. The PSUV-aligned Supreme Court blocked three MUD deputies from taking office, depriving the opposition of a two-thirds majority. From January 2016 through August 2017, the Supreme Court blocked laws and assumed the legislature's functions. At the same time, opposition efforts in 2016 focused on attempts to recall President Maduro in a national referendum that was delayed and then suspended by the CNE. In late 2016, most of the opposition (except the VP party) agreed to A former trade unionist who served in Venezuela’s MUD captured a two-thirds majority in the legislature from 1998 until 2006, Nicolás Maduro National Assembly—a major setback for Maduro. held the position of National Assembly president The PSUV-aligned Supreme Court blocked three from 2005 to 2006, when he became President MUD deputies from taking office, depriving the Chávez’s foreign minister. Maduro retained that position until mid-January 2013, concurrently opposition of a two-thirds majority. From January serving as vice president beginning in October 2016 through August 2017, the Supreme Court 2012, when President Chávez tapped him to serve blocked laws and assumed the legislature’s in that position fol owing his reelection. Maduro functions. In 2016, opposition efforts to recal often was described as a staunch Chávez loyalist. President Maduro in a national referendum were Maduro’s partner since 1992 is wel -known Chávez supporter Cilia Flores, who served as the delayed and then suspended by the CNE. Most of president of the National Assembly from 2006 to the opposition (except the VP party) then entered 2011; the two married in 2013. talks with the government mediated by the talks with the government mediated by the Vatican; the former leaders of the Spain, the Dominican Republic, Spain, and Panama; and the head of the Union of South American Nations. By December 2016, the opposition had left the talks due to the Maduro government's lack of progress in meeting its commitments.⁸

Developments in 2017-May 2018 Election. In 2017, the Maduro government continued to harass and arbitrarily detain opponents. In addition’s failure to meet its commitments.9 In early 2017, President Maduro appointed a hardlinehard-line vice president, Tareck el Aissami, former governor of the state of Aragua and designated by the United States as a drug kingpin. Popular protests had dissipated. In addition to restricting freedom of assembly, the government cracked down on media outlets and journalists.

Despite these obstacles, the MUD became reenergized in response to the Supreme Court'’s March 2017 rulings to dissolve the legislature and assume all al legislative functions. After domestic protestsprotests, a rebuke by then-Attorney General Luisa Ortega (a Chávez appointee), and an outcry from the international community, President Maduro urged the court to revise those rulings, and it complied. In April 2017, the government banned opposition leader and two-time presidential candidate Henrique Capriles from seeking office for 15 years, which fueled more protests. From March to July 2017, the opposition conducted large protests against the government, callingcal ing for President Maduro to release political prisoners, respect the separation of powers, and hold an early presidential election. Clashes between security forces (backed by armed civilian militias) and protesters left more than 130 dead and hundreds injured (see "Human Rights," below).

.10 In May 2017, President Maduro announced that he would convene a constituent assembly to revise the constitution and scheduled July 30 elections to select delegates to that assembly. The Supreme Court ruled that Maduro could convoke the assembly without first holding a popular referendum (as the constitution requires). The opposition boycotted, arguing that the elections were unconstitutional; a position shared by then-Attorney General Luisa Ortega and international observers (including the United States). Despite an opposition boycott, the government orchestrated the July 2017 election of a 545-member National Constituent Assembly (ANC). Even though many countries do not recognize its legitimacy, the ANC dismissed Attorney General Ortega and declared itself superior to other branches of government. Ortega fled Venezuela in August 2017 and has since spoken out against the Maduro government. The ANC also approved a decree allowing it, not the National Assembly, to pass legislation.

9 T hose commitments included (1) releasing political prisoners, (2) announcing an electoral calendar, (3) respecting the National Assembly’s decisions, and (4) addressing humanitarian needs. 10 Office of the United Nations High Commissioner for Human Rights (OHCHR), Human Rights Violations and Abuses in the Context of Protests in the Bolivarian Republic of Venezuela from 1 April to 31 July 2017 , August 30, 2017. T he Venezuelan human rights group Foro Penal and Human Rights Watch (HRW) maintain that more than 5,300 Venezuelans were detained during the protests. Human Rights Watch, Foro Penal, Crackdown on Dissent: Brutality, Torture, and Political Persecution in Venezuela , November 2017. Congressional Research Service 4 Venezuela: Background and U.S. Relations Even though many countries do not recognize its legitimacy, the ANC dismissed Attorney General Ortega (who then went into exile) and declared itself the new legislative body. President Maduro gained the upper hand over the MUD despite international condemnation of his President Maduro gained the upper hand over the MUD despite international condemnation of his actions. In October 2017, the PSUV won 18 of 23 gubernatorial elections. Although fraud likely took place given the discrepancies between opinion polls and the election results, the opposition could not prove that it was widespread. There is evidence that the PSUV linked receipt of future government food assistance to votes for its candidates by placing food assistance card registration centers next to polling stations, a practice also used in subsequent elections.⁹11 The MUD coalition initially initial y rejected the election results, but four victorious MUD governors took their oaths of office in front of the ANC (rather than the National Assembly), a decision that fractured the coalition.

With the opposition in disarray, President Maduro moved to consolidate power and blamed U.S. sanctions for the country'’s economic problems. Maduro fired and arrested the head of Petróleos de Venezuela, S.A. (PdVSA) and the oil minister for corruption. He appointed a general with no experience in energy to fill fil both positions, consolidating military control over the economy. The ANC approved a law to further restrict freedom of expression and assembly. Although most opposition parties did not participate in municipal elections held in December 2017, a few, including A New Time (UNT), led by Manuel Rosales, and Progressive Advance, led by Henri Falcón, fielded fielded candidates. The PSUV won more than 300 of 335 mayoralties.

May 2018 Elections and Aftermath. The Venezuelan constitution established that the country'’s presidential elections were to be held by December 2018. Although many prominent opposition politicians had been imprisoned (Leopoldo López , under house arrest), barred from seeking office (Henrique Capriles), or in exile, some MUD leaders sought to unseat some Democratic Unity Roundtable (MUD) leaders sought to unseat President Nicolás Maduro through elections. Those leaders negotiated with the PSUVUnited Socialist Party of Venezuela to try to obtain guarantees, such as a reconstituted CNE National Electoral Council (CNE) and international observers, to help ensure the elections would be as free and fair as possible. In January 2018, the ANCNational Constituent Assembly (ANC) ignored those negotiations and calledcal ed for elections to be moved up from December December to May 2018, violating a constitutional requirement that elections be called be cal ed with at least six months anticipation.¹⁰ The MUD declared an election boycott, but Henri Falcón, former governor of Lara, broke with the coalition to run.

Venezuela'’s presidential election proved to be minimally competitive minimal y competitive and took place within a climate of state repression. There were no internationallyinternational y accredited election monitors. The government coerced its workers to vote and placed food assistance card distribution centers next to pollingpol ing stations. The CNE reported that Maduro received Mad uro received 67.7% of the votes followedfol owed by Falcón (21%). Voter turnout was much lower in 2018 (46%) than in 2013 20 13 (80%). After independent monitors reported widespread fraud, Falcón calledcal ed for new elections to be held.

Following . Fol owing the disputed election, Maduro faced mounting economic problems, coup attempts, and increasing international isolation. His His government released some political prisoners; established as executive vice president Delcy Rodriguez, former head of the ANC and former foreign minister, as executive vice president; and made changes to increase his Maduro’s control over the judiciary and the intelligence intel igence services. It also arrested those perceived as threats, including military officers military officers and an opposition legislator accused of involvement in an August 2018 allegedal eged assassination attempt against Maduro.¹¹ Foro Penal and Human Rights Watch have documented several cases in which those accused of plotting coups were subjected to "“beatings, asphyxiation and electric shocks."¹² ” The October 2018 death in custody of Fernando Albán, an opposition politician, provoked domestic and international outrage. (See "Human Rights," below.)

Interim President Recognized, but Maduro Still in Power, 2019-Present

Sources: José Ignacio Hernández G., “Rigged Elections: Venezuela’s Failed Presidential Election,” Electoral Integrity Project, May 30, 2018; Human Rights Watch, “Venezuela: Suspected Plotters Tortured,” January 9, 2019. 11 Michael Penfold, Food, Technology, and Authoritarianism in Venezuela’s Elections, Woodrow Wilson Center, April 18, 2018. Congressional Research Service 5 Venezuela: Background and U.S. Relations Interim President Recognized But Maduro Still in Power, 2019-Present On January 10, 2019, Maduro began a second term. The United States, the European Union (EU), the Group of Seven (G-7), and most Western Hemisphere countries do not recognize his mandate as legitimate. They view the National Assembly as Venezuela'’s only democratic institution.

On January 5, 2019, the National Assembly elected Juan Guaidó, a 35-year old industrial engineer from the VP party, as its president. In mid-January, Guaidó announced he was willingwil ing to serve as interim president until new elections were held. Buoyed by a huge turnout for protests he calledcal ed for, Guaidó took the oath of office on January 23, 2019. The United States and more than 50 other countries (including most EU and many Western Hemisphere countries) recognized Guaidó as interim president.

In 2019, Guaidó'’s supporters organized two high-profile but ultimately unsuccessful efforts to get security forces to abandon Maduro: in February, Guaidó supporters sought to bring emergency aid into the country across borders that Maduro had closed; and on April 30, Guaidó calledcal ed for a civil-military uprising.12 Guaidó and his allies initially al ies initial y hoped that sustained protests and international pressure would lead to enough military defections to compel Maduro to leave office relatively quickly, but those hopes have not materialized. Aside from the former head of the national intelligenceintel igence agency (General Manuel Christopher Figuera), who supported the April 30 uprising, the military high command has remained loyal to Maduro. A corruption scandal involving opposition legislators in late 2019 also hurt Guaidó's credibility.¹³

Analysts have speculated about why Maduro has retained the loyalty of most security forces in Venezuela. Military leaders have enriched themselves through corruption, drug trafficking, and other illicit other il icit industries. Some military leaders also may fear that they could face prosecution or extradition abroad for human rights abuses under a new government or extradition abroad. The U.S. government has said it may remove sanctions on officials who abandon Maduro (as they did with General Figuera), but that could be difficult, depending upon the individual and sanctions involved. FinallyFinal y, Venezuelan intelligence intel igence officials, trained and supported by Cubans, have arrested dissidents within the military. In June 2019, a naval officer died after being tortured in custody.

Many observers had hoped that talks mediated by Norway, which became public in May 2019, could lead to a negotiated solution to the political crisis in Venezuela that would establish the conditions for internationallyinternational y monitored elections to be held.¹⁴13 Hopes faded, however, after Maduro stopped participating in negotiations in early August 2019 following new U.S. sanctions and . Guaidó pulled out of the process permanently in September. Without Russia and the United States pushing both sides to negotiate, observers are skeptical that negotiations will succeed.

As of March 2020, Guaidó retains broad diplomatic support—as evidenced by his three-week diplomatic tour in early 2020, during which he and President Trump reportedly discussed how “to expedite a democratic transition in Venezuela”14—but he continues to lack domestic political power. Since March 2020, the Coronavirus Disease 2019 (COVID-19) pandemic and the Maduro government’s strict 12 T he Venezuelan Human Rights group Foro Penal documented seven deaths and 107 arbitrary detentions that resulted from the use of force by state security forces and colectivos that blocked aid from entering the country February 22 -23, 2019. Foro Penal, Report on Repression in Venezuela. February 2019. Maduro-aligned forces also responded to the April 30 demonstrations with force, with four deaths and hundreds of arbitrary detentions reported. HRW, Venezuela: Violent Response to Demonstrators: Reports of Killings, Detentions, Media Shutdowns, May 3, 2019. 13 David Smilde and Geoff Ramsey, International Peacemaking in Venezuela’s Intractable Conflict, Fundación Carolina, 2020; International Crisis Group, Peace in Venezuela: Is There Life after the Barbados Talks? , Briefing No. 41, December 11, 2019. 14 T he White House, “ Statement from the Press Secretary on the Visit of Interim President Juan Guaidó of Bolivarian Republic of Venezuela,” February 5, 2020. Congressional Research Service 6 link to page 42 Venezuela: Background and U.S. Relations enforcement of a national quarantine has limited Guaidó’s ability to publicly protest and organize. In part because of the pandemic, nascent progress that Guaidó’s supporters had made in negotiating the formation of a new CNE with PSUV members of the National Assembly stal ed.15 Guaidó was widely criticized in Venezuela after reports emerged that he may have condoned a plan that resulted in a botched armed amphibious raid against Maduro launched from Colombia in early May 2020 by U.S. mercenaries (who have been sentenced in Venezuela) and former Venezuelan soldiers.16 In 2020, Maduro has sought to secure parliamentary support in the National Assembly by convening new elections. However, many observers are concerned that current circumstances do not meet international standards for free and fair elections. In January 2020, Maduro convinced, possibly after providing bribes, opposition legislators from smal parties to vote with PSUV legislators to instal Luis Parra as head of the National Assembly, even though they lacked a quorum—a move that prompted additional U.S. sanctions. In May, capitalizing on Guaidó’s fading popularity, the Maduro-aligned Supreme Court recognized Parra as the president of the National Assembly. On June 5, the Supreme Court ruled that, since efforts to select a new CNE had stal ed in the National Assembly, it would name new CNE rectors. After naming a new CNE, the Supreme Court disbanded the leadership of three major opposition parties and named new leaders for each. The CNE scheduled elections for December 6, 2020, but 27 opposition parties plan to boycott.17 Guaidó risks losing his legitimacy as Interim President in January 2021, when his term as president of the National Assembly ends. (For prospects, see “Outlook,” below.) Human Rights 2020, but he continues to lack domestic political power. In early January 2020, Maduro used National Guard troops and armed civilian militias known as colectivos to block Guaidó and other opposition legislators from entering the National Assembly—a move that was widely condemned even by governments that recognize Maduro's presidency.¹⁵ Although 100 of 167 legislators subsequently gathered in an off-site location to reelect Guaidó as Assembly president, they continue to lack access to their building and, with many in exile or under detention, may struggle to keep a quorum. Guaidó has called for renewed protests, but Venezuelans have grown weary of mobilization efforts.¹⁶

Nicolás Maduro retains control over the security forces and all branches of the federal government except the National Assembly, economic resources (legitimate and illegitimate), state and municipal governments, media outlets, and food aid on which millions now depend. Analysts predict that Maduro may urge the smaller parties with which he began a "dialogue" in September 2019 to agree to move up the National Assembly elections that are due to be held by December 2020. Even though they lacked a quorum, those parties voted, possibly after receiving bribes, with PSUV legislators to install Luis Parra as head of the National Assembly in January 2020.¹⁹ Many experts predict that Maduro will try to maintain a veneer of democracy in Venezuela while allowing security forces and civilian militias—which he has sought to integrate into the armed forces—to harass Guaidó and the opposition. (For prospects for 2020, see "Outlook," below.)

Human Rights

Human rights organizations and U.S. officials have expressed concerns for more than a decade about the deterioration of democratic institutions and threats to freedom of speech and press in Venezuela. Human rights conditions in Venezuela have deteriorated even more under President Maduro than under former President Chávez.²⁰18 Abuses have increased, as security forces and allied al ied armed civilian militias (colectivos) have been deployed to violently quash protests. In August 2017, the U.N. Office of the High Commissioner for Human Rights (OHCHR) issued a report on human rights violations by Venezuelan security forces against protestors. According to the report, credible and consistent accounts indicated that security forces "used excessive force to deter demonstrations, crush dissent, and instill fear."²¹ The report maintained that many of those detained were subject to cruel, degrading treatment that in some cases amounted to torture. In June 2018, OHCHR issued another report documenting abuses committed by units involved in crime 19 In June 2018, OHCHR issued another report documenting abuses committed by units involved in crime 15 David Smilde and Dimitris Pantoulas, “Venezuela Weekly: State and Society Respond to Coronavirus,” March 19, 2020, and “Venezuela Weekly: T SJ Ruling Further Complicates Electoral Agreement,” May 27, 2020, Venezuelan Politics and Human Rights, Washington Office on Latin America (WOLA). 16 According to press reports, two aides to Guaidó resigned May 11 after admitting that they had signed a preliminary agreement in October 2019 with a Florida-based U.S. security firm, Silvercorp USA, owned by Jordan Goudreau, who reportedly organized the armed incursion. T he aides maintained that conversations with the company ended in November 2019 when they deemed Goudreau unreliable. Anthony Faiola, Karen DeYoung, and Ana Vanessa Herrero, “Inside ‘Plan C’: T he Rogue Operation to capture Venezuela’s Nicolás Maduro,” Washington Post, May 7, 2020; Gideon Long, “Aides to Venezuela’s Guaidó Quit Over Plan to T opple Maduro,” Financial Times, May 11, 2020. CRS cannot independently verify these press reports. 17 “Venezuela: Opposition Parties Confirm Electoral Boycott,” Latin News Daily, August 3, 2020. 18 According to Freedom House, Venezuela fell from “partly free” under Chávez to “not free” under Maduro. Freedom House, Freedom in the World: 2020. 19 OHCHR, Human Rights Violations and Abuses in the Context of Protests in the Bolivarian Republic of Venezuela from 1 April to 31 July 2017, August 30, 2017. Congressional Research Service 7 Venezuela: Background and U.S. Relations fighting, the scale of the health and food crisis, and the continued impunity in cases involving security officers who al egedly kil ed people during the protests.20 Venezuela has among the highest homicide and crime victimization rates in Latin America and the Caribbean, the region with the highest homicide rates in the world. According to the Venezuelan Violence Observatory, the homicide rate in Venezuela declined in 2019 (60.3 homicides per 100,000 people) as compared with a rate of 81.4 per 100,000 people in 2018, with part of that decline attributed to the territorial control that crime groups have over some areas.21 Security forces also have adopted militarized approaches to public security that have resulted in extrajudicial kil ings and other serious human rights abuses.22 In November 2019, a Reuters investigation of the Special Action Force of Venezuela’s National Police documented 20 kil ings by the force, which has been accused of hundreds of such kil ings.23 In June 2019, U.N. High Commissioner for Human Rights Michel e Bachelet visited Venezuela. In July 2019, her office issued a report documenting a range of significant human rights abuses perpetrated by the Maduro government, including evidence that security forces committed some 6,800 extrajudicial kil ings from January 2018 to May 2019.24 The report details how intel igence agencies have arrested and tortured those perceived as threats, including military officers and opposition politicians. It asserts that the Maduro government “is violating its obligations to ensure the rights to food and health,”25 particularly those of “indigenous peoples.”26 Recent human rights reports include the following:  fighting, the scale of the health and food crisis, and the continued impunity in cases involving security officers who allegedly killed people during the protests.²²

• In February 2019, the Venezuelan Human Rights group Foro Penal documented seven deaths, 107 arbitrary detentions, and 58 bullet injuries that resulted from the use of force by state security forces and colectivos that blocked aid from entering the country on February 22-23, 2019.²³
• In October 2019, an International Labour Organization (ILO) Commission of Inquiry published findings citing violations of several ILO conventions by the Maduro government. The report documented the murders of more than 30 trade unionists from 2015 to 2018, physical attacks on trade unionists that remained in impunity, and the detention and subjection of unionists to military tribunals.²⁴
• In November 2019, a Reuters investigation of the Special Action Force of Venezuela's National Police (FAES) documented 20 killings by the force, which has been accused of hundreds of such killings. A report published by Reuters in February 2020 describes how convicted criminals are part of the FAES ranks.²⁵
• In March 2020, the U.S. State Department's Country Report on Human Rights Practices for 2019 cited "extrajudicial killings by security forces, including colectivos; torture by security forces; harsh and life-threatening prison conditions; and political prisoners" as some of the most serious human rights abuses in Venezuela. According to the report, new issues include "intimidation, harassment, and abuse" of legislators.²⁶

Analysts predict repression will continue in Venezuela as Maduro seeks to wrest27  In March 2020, the U.S. State Department’s Country Report on Human Rights Practices for 2019 cited “extrajudicial kil ings by security forces, including colectivos; torture by security forces; [and] harsh and life-threatening prison conditions;” as among the most serious human rights abuses in Venezuela. A new issue cited was the “intimidation, harassment, and abuse” of legislators.28 20 OHCHR, Venezuela: Continued Impunity amid Dismal Human Rights Situation, June 22, 2018. 21 Reuters, “Venezuela Murder Rate Dips, Partly Due to Migration: Monitoring Group,” December 27, 2018. 22 Amnesty International, This Is No Way to Live: Public Security and Right to Life in Venezuela , September 20, 2018; Human Rights Watch, Venezuela: Extrajudicial Killings in Poor Areas, September 18, 2019. 23 Sarah Kinosian and Angus Berwick, “Elite Police Force Spreads T error in the Barrios of Venezuela,” Reuters, November 13, 2019; Kinosian and Berwick, “ Convicted Criminals Are Among the Special Police Force T errorizing Venezuela,” Reuters, February 19, 2020. 24 OHCHR, Report of the United Nations High Commissioner for Human Rights on the Situation of Human Rights in Bolivarian Republic of Venezuela, Annual Report no. A/HRC/41/18, July 5, 2019. 25 OHCHR, “UN Human Rights Report on Venezuela Urges Immediate Measures to Halt and Remedy Grave Rights Violations,” press release, July 4, 2019. 26 OHCHR Venezuela Human Rights Report, 2019. 27 ILO, For National Reconciliation and Social Justice in the Bolivarian Republic of Venezuela: Report of the Com m ission of Inquiry Appointed Under Article 26 of the Constitution of the ILO, October 2019. 28 U.S. Department of State, 2019 Country Reports on Human Rights Practices: Venezuela, March 11, 2020. Congressional Research Service 8 link to page 20 link to page 46 Venezuela: Background and U.S. Relations  In July 2020, the OHCHR issued two reports on Venezuela. 29 The first report provided an updated assessment on the human rights situation in the country, including evidence that security forces committed some 1,300 extrajudicial kil ings from January to May 2020. The second report documented labor exploitation and other serious human rights abuses committed by criminal groups in Venezuela’s mining regions. Analysts predict repression wil continue in Venezuela as Maduro seeks to win control of the National Assembly from Guaidó. According to Foro Penal, there were an estimated 381386 political prisoners in Venezuela as of August 24, 2020, with the number staying relatively stable as some political detainees are released (but stil under surveil ance) while others are arrested.30 Maduro’s intel igence police are currently holding five legislators, Guaidó’s chief of staff, and a prominent labor activist. The Supreme Court has stripped many lawmakers’ immunity from prosecution, and dozens of legislators have been detained and subsequently monitored by the Maduro government, are in exile, or have sought refuge in a foreign embassy (including Leopoldo López). Security forces have detained doctors and journalists critical of the government’s COVID-19 response, as wel as returning migrants suspected of having COVID-19 (see “Coronavirus Disease 2019.”31 political prisoners in Venezuela as of mid-February 2020.³⁰ Maduro's intelligence police are currently holding Juan Requesens (a legislator detained in August 2018), Roberto Marrero (Guaidó's chief of staff detained in March 2019), and Gilber Caro (a legislator released in 2018 and then rearrested in December 2019). The Supreme Court has stripped many lawmakers' immunity from prosecution. Although Maduro's government released Edgar Zambrano, vice president of the National Assembly, from detention in September 2019, nearly 36 other legislators are in state custody, in exile, or have sought refuge in a foreign embassy.³¹ Some observers fear that Guaidó himself could face arrest or exile. An armed man loyal to Maduro reportedly aimed a gun at Guaidó during a protest on February 29, 2020; security forces suppressed Guaidó's March 10 demonstration with tear gas.³²

In addition, other prisoners have been arbitrarily detained for crimes such as corruption, including six former Citgo executives, five of whom have dual U.S. citizenship, and one U.S. legal permanent resident imprisoned since 2017. The Maduro government granted the six executivesTwo of those individuals were released to house arrest in July 2020 after former U.S. Ambassador to the U.N. Bil Richardson met with Maduro on their behalf. Despite Richardson’s effort, two Americans detained in May for participating in a botched raid against Maduro have been sentenced to 20 years in prison.32 in December 2019, but rearrested them in February 2020. Juan Guaidó's uncle has been detained for more than a month since escorting his nephew back to Caracas.

For other sources on human rights in Venezuela, seesee Appendix B.

Investigations into Human Rights Abuses. In September 2017, several countries urged the U.N. Human Rights Council to support the High Commissioner's call ’s cal for an international investigation into the abuses described in the August 2017 U.N. report on Venezuela. In June 2018, the High Commissioner for Human Rights urged the U.N. Human Rights Council to launch a commission of inquiry to investigate the abuses it documented in that and a follow -up report. It referred the report to the prosecutor of the International Criminal Court (ICC). In September 2018, the U.N. Human Rights Council adopted a resolution on Venezuela expressing "“its deepest concern"” about the serious human rights violations described in the June 2018 report, callingcal ing upon the government to accept humanitarian assistance, and requiring an OHCHR investigation on the situation in Venezuela. OnIn September 27, 2019, the Human Rights Council passed a resolution condemning human rights abuses by the Maduro government and establishing an independent fact-finding office in Venezuela. Human rights groups praised this development, but many are wary that Venezuela'mission in Venezuela with a mandate for one year. Human rights groups praised this development and are pushing for the Human Rights Council to extend the mission’s mandate at 29 OHCHR, Report of the United Nations High Commissioner for Human Rights on the Situation of Human Rights in Bolivarian Republic of Venezuela, Annual Report no. A/HRC/44/20, July 2, 2020; OHCHR, Independence of the Justice System and Access to Justice in the Bolivarian Republic of Venezuela , July 15, 2020. 30 For more information, see Foro Penal, https://foropenal.com/presos-politicos/. For analysis on how the Maduro government has relied on cycles of repression to maintain its grip on power, see Alfredo Romero, The Repression Clock: A Strategy Behind Autocratic Regim es, Woodrow Wilson Report on the Americas, #40, August 2020. 31 Anatoly Kurmanaev, Isayen Herrera and Sheyla Urdaneta, “Venezuela Deploys Security Forces in Coronavirus Crackdown,” New York Times, August 19, 2020. 32 “2 Ex-Green Berets Sentenced to 20 Years for Venezuela Attack,” AP, August 8, 2020. Congressional Research Service 9 link to page 29 link to page 29 link to page 16 Venezuela: Background and U.S. Relations their September 2020 meeting.33 Venezuela’s October 2019 election to a three-year seat on the s October 2019 election to a three-year seat on the Human Rights Council, which began in January 2020, may undermine its actions.

support for the mission. In addition to the OHCHR, former Venezuelan officials, the OASOrganization of American States (OAS), and neighboring countries have asked the ICC to investigate serious human rights violations committed by the Maduro government. The ICC prosecutor opened a preliminary investigation in February 2018.

Economic Crisis³³

Economic Crisis34 For decades, Venezuela was one of South America'’s most prosperous countries. Venezuela has the world'’s largest proven reserves of oil, and its economy is built on oil. (See also "Petroleum “Petroleum Sector Concerns and U.S. Economic Sanctions"” below.) Oil traditionallytraditional y has accounted for more than 90% of Venezuelan exports, and oil sales have funded the government budget. Venezuela benefited from the boom in oil prices during the 2000s. President Chávez used the oil windfall to windfal to spend heavily on social programs and expand subsidies for food and energy, and government. Government debt more than doubled as a share of gross domestic product (GDP) between 2000 and 2012.³⁴35 Chávez also used oil to expand influence abroad through PetroCaribe, a program that allowedal owed Caribbean Basin countries to purchase subsidized oil.

Although substantial government outlays on social programs helped Chávez curry political favor and reduce poverty, economic mismanagement had long-term consequences. Chávez moved the economy in a less market-oriented direction, with widespread expropriations and nationalizations, as wel as well as currency and price controls. These policies discouraged foreign investment and created market distortions. Government spending was not directed toward investment to increase economic productivity or diversify the economy from its reliance on oil. Corruption proliferated.

When Nicolás Maduro took office as President in 2013, he inherited economic policies reliant on proceeds from oil exports. When world oil prices crashed by nearly 50% in 2014, the Maduro government was ill-equipped to soften the blow. The fall in oil prices strained public finances. Instead of adjusting fiscal policies through tax increases and spending cuts, the Maduro government tried to address its growing budget deficit by printing money, which led to inflation. The government also tried to curb inflation through price controls, although these controls were largely ineffective in restricting prices, as supplies dried up and transactions moved to the black market.³⁵

Between the collapse in oil prices and production and U.S. sanctions, which restrict Venezuela's access to the U.S. financial system and target its oil and gold sectors, Venezuela's economy has deteriorated markedly over the past several years. The extent of the country's challenges is difficult to overstate. According to some economists, it is the single largest economic collapse outside of war in at least 45 years and more than twice the magnitude of the Great Depression in the United States.³⁹ According to the IMF, Venezuela's economy contracted in 2019 for the sixth year in a row (Figure 2). The IMF projected that Venezuela's GDP in U.S. dollars fell from $331 billion in 2012 to $70 billion in 2019 (Figure 2).

Figure 2. Venezuela's Economy: Collapsing GDP

Source: IMF, World Economic Outlook, October 2019. Note: 2019 data are forecasts. GDP = gross domestic product.

Among its economic challenges, the Venezuelan government continues to face a substantial debt burden, estimated around $150 billion outstanding owed to private bondholders, China, Russia, multilateral lenders, importers, and oil industry service companies.⁴⁰ By one measure, debt relative to exports, Venezuela is the world's most heavily indebted country.⁴¹ Despite pledges to restructure the defaulted debt, the Maduro government has made no progress in negotiations with private creditors, and sanctions effectively prohibit U.S. investors from participating in any such restructuring. Additionally, U.S. sanctions restrict the sale of Venezuelan bonds by U.S. investors to foreigners. Bondholders that initially waited to pursue legal actions against Venezuela for defaulting on its debts are increasingly turning to the courts; they have filed more than a dozen lawsuits since 2018, hoping to seize Venezuela's overseas assets.⁴² il -equipped to respond and a years-long economic crisis has unfolded. Economic mismanagement and U.S. sanctions targeting Venezuela’s oil sector also likely contributed to a fal in oil production, such that even as global oil prices rebounded, Venezuela’s economy did not recover. Additional U.S. sanctions targeting the government, central bank, and gold sectors, as wel as limiting Venezuela’s access to the U.S. financial system, likely exacerbated economic pressures in Venezuela. The extent of Venezuela’s economic collapse is difficult to overstate. It is estimated to be the single largest economic collapse outside of war in at least 45 years and more than twice the magnitude of the Great Depression in the United States.36 Between 2014 and 2019, Venezuela’s economy contracted by 66% (see Figure 2).37 Imports—which Venezuela relies on for most consumer goods—have fal en by 80%. Government deficits have averaged over 20% of GDP 33 Amnesty International, “Venezuela: Human Rights Organizations Call on UN Human Rights Council to Extend and Strengthen Fact -Finding Mission,” August 17, 2020. 34 T his section was authored by Rebecca M. Nelson, Specialist in International T rade and Finance. For more information, see CRS Report R45072, Venezuela’s Econom ic Crisis: Issues for Congress, by Rebecca M. Nelson. 35 Economist, “How Chávez and Maduro Have Impoverished Venezuela,” April 6, 2017. 36 Anatoly Kurmanaev, “Venezuela’s Collapse Is the Worst Outside of War in Decades, Economists Say,” New York Tim es, May 17, 2019; Michael Stott, “ Venezuela: T he Political Stand-off Fueling an Economic Collapse,” Financial Tim es, August 4, 2019. 37 Real GDP (in 2010 U.S. dollars). Economist Intelligence Unit (EIU), Country Report: Venezuela, Accessed August 5, 2020. Congressional Research Service 10 link to page 19 Venezuela: Background and U.S. Relations annual y. The government’s reliance on the creation of money to finance government deficits (monetization of the deficit) led to hyperinflation, with consumer prices increasing more than 17,000% in 2019, depleting the value of citizens’ salaries and savings. Hyperinflation, in turn, led to a collapse in the value of its currency, the bolívar, and created shortages of foreign currency, particularly U.S. dollars. Combined with shortages of critical food and medicine, as wel as the COVID-19 pandemic, the country’s ongoing humanitarian crisis has further deteriorated (see “Humanitarian Situation and Response,” below). The government, which borrowed heavily during the boom years of the 2000s, has Figure 2. Venezuela’s Gross Domestic Product defaulted on al its bonds, although it continues to repay its debts to China and Russia, its main financial backers. Venezuela faces numerous legal chal enges from private creditors and firms seeking to seize Venezuelan assets. The Department of the Treasury took steps in 2019 to shield Citgo, a U.S.-based subsidiary of PdVSA and Venezuela’s most valuable asset, from seizure in legal chal enges against Venezuela subsidiary of PdVSA (the Venezuelan state-owned oil and gas company), from seizure by Venezuela's creditors in order to preserve the asset for the interim government if it takes power (see text box below).

. Source: Economist Intel igence Unit. Maduro Government Policy Responses The Maduro government was initiallyinitial y slow to address the economic crisis or acknowledge the government' government’s role in creating it. Instead, it has largely blamed the country'’s struggles on a foreign "“economic war,"” a reference to U.S. sanctions.⁴³ 38 Piecemeal efforts to address the crisis, including price controls and the creation of a new digital currency, the petro, were ineffective. Price controls contributed to shortages and the proliferation of black markets. In August 2018, the government acknowledged for the first time its role in creating hyperinflation and announced new policies for addressing the economic crisis, such as introducing a new "sovereign bolívar,"“sovereign bolívar,” which removed five zeros from the previous currency (the bolívar)bolívar; cutting the government budget deficit from 30% in 2018 to zero; speeding up tax collection; and increasing the minimum salary by more than 3,000%.39 The government did not implement many of these policies, including eliminating the budget deficit. The Maduro government also offered to pay foreign suppliers and contracts in Chinese yuan to circumvent U.S. sanctions, and it turned to the Andean Development Corporation, a Latin American development bank, and the U.N. to finance electricity projects.40 38 Rachelle Krygier, “After Years of Crisis, Venezuela’s Maduro Might Finally Be Ready to Accept Some Help,” Washington Post, December 12, 2018. 39 “Nicolas Maduro T ries to Rescue Venezuela’s Economy,” Economist, August 23, 2018. 40 “Facing U.S. Sanctions, Venezuela Offers Suppliers Payment in Chinese Yuan,” Reuters, November 28, 2019; “U.N., Lender CAF Seek $350 Million Loan Deal for Government of Venezuela’s Maduro,” Reuters, December 4, 2019. Congressional Research Service 11 Venezuela: Background and U.S. Relations In early 2020, Venezuelan business owners reported that the Maduro government was al owing some free market reforms as a way to support economic activity, including the country’s first initial public offering in more than a decade, even as it stepped3,000%.⁴⁴

Venezuelan business owners report that the Maduro government is also allowing some free market reforms as a way to support economic activity, including the country's first initial public offering in more than a decade, even as it steps up enforcement of price controls and pressuredand pressures businesses to accept the new digital currency.⁴⁶41 Venezuelan consumers and businesses increasingly usebusinesses have increasingly turned to the U.S. dollars for day-to-day transactions, including the recipients of about $4 billion bil ion in annual remittances from relatives abroad.42 The Maduro government worked with its al ies in annual remittances from relatives abroad.⁴⁷ The Maduro-government controlled Constituent Assembly passed a law to impose an extra sales tax on purchases of goods using foreign currency, however, which could dampen the use of foreign exchange going forward. The Maduro government has also worked with other countries to mitigate the impact of U.S. sanctions; for example, Russia now handlesby early 2020, Russia was handling more than two-thirds of Venezuela'’s crude oil, and the United Arab Emirates imported around $1 billion bil ion in gold from Venezuela since sanctions targeting Venezuela’s gold sectorgold sanctions were imposed in late 2018.43 Some of the reforms led to an uptick in economic activity in Caracas, but the provinces continued to struggle with water shortages and malnutrition.44 New Economic Challenges in 2020 Venezuela faced two new economic pressures in the spring of 2020: the COVID-19 pandemic and oil price wars. The government and economy were il -prepared to address the health or economic effects of COVID-19. Social distancing mandates disrupted economic activities, even as they are difficult for Venezuelans to obey; the majority of people must work in crowded, informal sector jobs in order to survive. Simultaneously, an oil price war between Russia and Saudi Arabia caused global oil prices to drop. Even with U.S. sanctions targeting Venezuela’s oil sector, oil is a critical source of revenue and foreign currency. Some estimates predict that, due to the drop in oil prices, the Maduro government wil have less than half the funds it managed last year.45 As of August 2020, the Economist Intel igence Unit forecasts Venezuela’s economy wil contract by 30% in 2020.46 Since March 2020, the Maduro government has taken a number of policy actions to address the new economic chal enges. It reimposed price controls on many basic food items; increased gas prices for the first time in two decades; and lifted long-standing bans on gold, diamond, and mining bans in rivers in the Amazon (where mining was already occurring il egal y). To raise resources, the Maduro government approached the International Monetary Fund (IMF) for a $5 bil ion emergency loan but was rebuffed due to disagreements among IMF members over the legitimate leader of Venezuela. The Maduro government also requested that $1 bil ion of its gold holdings at the Bank of England (the United Kingdom’s central bank) be transferred to the U.N. Development Programme to fund humanitarian responses to COVID-19. UK courts ruled against the monetary transfer, because the UK does not recognize Maduro as the legitimate leader of Venezuela. The Maduro government is currently appealing the decision in the UK legal system. 41 Ryan Duge, Juan Forero, and Kejal Vyas, “Venezuela T ries Looser Grip on Economy,” Wall Street Journal, January 31, 2020; Mary Anastasia O’Grady, “Venezuela Puts the Crypt in Cryptocurrency,” Wall Street Journal, February 3, 2020. 42 Ryan Dube, Juan Forero and Kejal Vyas, “Maduro Gives Economy a Freer Hand to Keep His Grip on Venezuela,” Wall Street Journal, January 30, 2020. 43 Jessica Donati, Andrew Restuccia, and Ian T alley, “T rump’s Venezuela Problem: Russia –Putin’s Regime Helped Maduro Keep a Grip on Power, Despite U.S. Efforts to Oust Him ,” Wall Street Journal, January 28, 2020. 44 Anatoly Kurmanaev and Isayen Herrera, “Venezuela’s Capital is Booming. Is this the End of the Revolution?,” New York Tim es, February 1, 2020. 45 Corina Pons and Mayela Arms, “Venezuela’s Financial Crisis Exacerbat ed by Oil price War, Coronavirus,” Reuters, April 3, 2020. 46 EIU, Country Report: Venezuela, Accessed August 5, 2020. Congressional Research Service 12 Venezuela: Background and U.S. Relations Venezuela’s economic outlook is bleak, with no clear or quick resolution on the horizon in the absence of a resolution to the concurrent political crisis. The Maduro government appears loathe to adopt policies widely viewed by economists as necessary to restoring the economy: removing price controls, creating an independent central bank, entering an IMF program that could unlock broader international assistance, and restructuring its debt with private bondholders. Some analysts believe major change in Venezuela’s overal economic strategy wil imposed in late 2018.⁴⁸

The Maduro government is particularly resistant to assistance from the IMF, which would be a key component of any multi-donor international financial assistance package. Venezuela has not allowed the IMF to conduct routine surveillance of its economy since 2004, and the IMF has found the government in violation of its commitments as an IMF member. Although the Venezuelan government provided it with some economic data as required by all IMF members in late 2018, it has hardly been a turning point in the Maduro government's willingness to engage with the international organization. Some analysts believe major change in Venezuela's overall economic strategy will come only if and come only if and when there is a change in government.

Humanitarian Situation⁵⁴

Before the recent phase of political upheaval in Venezuela began in January 2019, Venezuelans were already This dispute is ongoing. U.S. Defense Contractor: U.S. defense contractor Huntington Ingal s Industries, Inc. is seeking compensation over nonpayment for repairs to two of Venezuela’s warships, which began decades ago, before U.S.-Venezuelan relations grew hostile under President Chàvez.51 The contractor is pursuing compensation in the form of Citgo shares to enforce a $138 mil ion judgment for the nonpayment. Humanitarian Situation and Response52 Even before the COVID-19 pandemic, Venezuelans were facing a humanitarian crisis due to a lack of food, medicine and health, and access to social services. Political persecution, hyperinflation, loss of income, and oppressive poverty also contributed to a dire situation. According to household surveys, the percentage of Venezuelans living in poverty increased from 48.4% in 2014 to 9496% in 2019 (80% in extreme poverty).53 Mil ions require% in 2018.⁵⁵ In April 2019, U.N. officials estimated that approximately 7 million people were in need of humanitarian assistance, with pregnant and nursing women, those with chronic illnessesil nesses, indigenous people, migrants, children under five, and people with disabilities particularly in need.⁵⁶ Successive electrical blackouts since March 2019 have made conditions worse inside Venezuela, limiting people's 54 In February 2020, the U.N. World Food Program (WFP) released an assessment showing that as of mid-2019, more than 9.3 mil ion Venezuelans were food insecure, of which 7 mil ion people (24.4% of the population) were moderately food insecure and 2.3 mil ion people (7.9% of the population) were severely food insecure.55 Many Venezuelans reported that the price of food presented more of an obstacle than the availability of food. The WFP assessment also found that 25% of households surveyed did not have reliable access to potable water and reported interruptions in electrical service and gas supplies. Successive electrical blackouts in 2019 made conditions worse in Venezuela, limiting people’s access to power and clean water and further contributing to health risks. The International Federation of Red Cross and Red Crescent Societies reported that these power outages have causedcontributed to the collapse of the health system to collapse, particularly for emergency services and for equipment, such as dialysis machines.56 Wel before COVID-19, overal health indicators, particularly infant and maternal mortality rates, had worsened. Previously eradicated diseases such as diphtheria and measles had also become a major concern.57 51 “U.S. Defense Firm Joins Creditors Seeking to Enforce Venezuela Judgments,” Reuters, August 1, 2020. 52 Written by Rhoda Margesson, Specialist in International Humanitarian Policy. For background, see CRS In Focus IF11029, The Venezuela Regional Migration Crisis, by Rhoda Margesson and Clare Ribando Seelke. 53 Universidad Católica Andrés Bello, Encuesta Sobre Condiciones de Vida:Venezuela 2019 -2020: Avance de Resultados, July 2020. 54 U.N. Office for the Coordination of Humanitarian Affairs (UNOCHA), “Venezuela: Humanitarian Response Aims to Assist 4.5 Million People in 2020,” August 3, 2020. 55 World Food Program (WFP), “ Venezuela Food Security Assessment : Main Findings,” February 23, 2020. 56 International Federation of Red Cross and Red Crescent Societies (IFRC), “Venezuela: Health Emergency – Six-month Update, October 23, 2019. 57 In November 2019, a yellow fever case was confirmed inside Venezuela, the first since 2005 . UNOCHA, Venezuela Hum anitarian Response, Situation Report No. 6, November 2019. Human Rights Watch and John Hopkins School of Public Health, Venezuela’s Hum anitarian Em ergency: Large-Scale UN Response Needed to Address Health and Food Crises, April 2019. Congressional Research Service 14 link to page 20 Venezuela: Background and U.S. Relations Displacement Figure 3. Venezuelan Migrants and Asylum As of August 2020, U.N. agencies estimated Seekers: Flows to the Region and Beyond that more than 5.1 mil ion Venezuelans had fled the country. Roughly 4.3 mil ion (about 85%) of the migrants were hosted in Latin American and Caribbean countries (see Figure 3), including in Colombia (more than 1.8 mil ion), Peru (829,708), Chile (455,494), Ecuador (362,857), Argentina (179,069), Brazil (264,617), and Panama (121,123).58 The displacement crisis has affected the entire region as neighboring countries, particularly Colombia, strain to absorb arrivals often malnourished and in poor health. Although the U.N. High Commissioner for Refugees (UNHCR)equipment, such as dialysis machines.⁵⁷ Although power has been restored in many parts of the country, there has been ongoing rationing in many states.⁵⁸

Figure 3. Venezuelan Migrants and Asylum Seekers: Flows to the Region and Beyond

Source: U.N. High Commissioner for Refugees.

As of February 2020, the U.N. High Commissioner for Refugees (UNHCR) and the International Organization for Migration (IOM) estimated that more than 4.8 million Venezuelans (more than 17% of the population) had left the country (see Figure 3). Of those, about 85% remained in Latin America and the Caribbean, including in Colombia (more than 1.6 million), Peru (861,665), Chile (371,163), Ecuador (385,042), Argentina (145,000), Brazil (253,495), and Panama (94,596).⁵⁹ UNHCR and IOM estimate that by the end of 2020, the number of Venezuelan refugees and migrants could reach over 5.5 million.⁶⁰ Although UNHCR does not consider most Venezuelans to be refugees, it asserts that a significant number need humanitarian assistance, international protection, and Source: U.N. High Commissioner for Refugees. opportunities to regularize their status. Prior to the onset of COVID-19, UNHCR and the International Organization for Migration (IOM) estimated that by the end of 2020, the number of Venezuelan refugees and migrants could reach over 5.5 mil ion.59 Border closures, quarantine orders, and other limitations on movement now in place due to the virus wil likely affect the overal displacement number. Venezuela’s exodus has become an unprecedented displacement crisis for the Western Hemisphere, which has in place some of the highest protection standards in the world for displaced and vulnerable persons. The 17 countries in the region have been under pressure to examine their respective migration and asylum policies and to address, as a region, the legal status of Venezuelans who have fled their country. More than 2.5 mil ion (roughly 50%) Venezuelans in neighboring countries lacked identification documents, making them vulnerable to exploitation.60 Coronavirus Disease 2019 The COVID-19 pandemic emerged in Venezuela in mid-March 2020. It has added a complicated layer to the country’s humanitarian crisis. In general, vulnerable, displaced populations live in conditions that make them particularly susceptible to COVID-19 and present significant chal enges to response and containment.61 The Pan American Health Organization and the U.N. 58 U.N. Coordination Platform for Refugees and Migrants from Venezuela, Response for Venezuelans (RV4), Refugee and Migrant Response Plan 2020: January – Decem ber 2020, December 2019. 59 Ibid. 60 T he Venezuelan government has made it difficult for Venezuelans to obtain a valid passport and therefore legal status outside the country. U.N. Coordination Platform for Refugees and Migrants from Venezuela, Response for Venezuelans (RV4), “ Refugee and Migrant Response Plan 2020,” as of July 5, 2020 61 Jacob Kurtzer, “T he Impact of COVID-19 on Humanitarian Crises,” CSIS: Critical Questions, March 19, 2020; Colum Lynch and Robbie Gramer, “T he Next Wave: U.N. and Relief Agencies Warn the Corona virus Pandemic Could Leave an Even Bigger Path of Destruction in the World’s Most Vulnerable and Conflict -Riven Countries,” Foreign Policy, March 23, 2020; Høvring Roald, “ T en T hings You Should Know About Coronavirus and Refugees, ” Congressional Research Service 15 Venezuela: Background and U.S. Relations Children’s Fund have led the international COVID-19 response in Venezuela, prioritizing capacity-building support for hospitals as wel as health, water and sanitation interventions for vulnerable populations.62 In neighboring countries, UNHCR and IOM have sought to address the immediate public health needs of refugees and migrants as wel as the displaced prompted by the virus.63 The United Nations and its partners have been trying to reduce the spread of COVID-19 through new and existing programs, including health, water sanitation and hygiene support; provision of medical supplies; and information and awareness campaigns.64 In neighboring countries, COVID-19 prevention measures that restrict movement, such as physical distancing, quarantine orders, and border closures, have not only disrupted the informal economy, cross-border economic activity, and remittances but also made it difficult for Venezuelans to meet their basic needs. Reportedly, as of August 2020, as many as 95,000 Venezuelans may have attempted to return to Venezuela, particularly from Colombia, as loss of livelihoods and economic decline followed the pandemic.65 Venezuelan returnees, a new population of concern within the humanitarian response, have presented chal enges on both sides of the border, particularly absent the establishment of a formal returns process. Many Venezuelans apparently have used informal border crossings, which present protection risks due to the presence of armed groups.66 Venezuelan returnees, arriving primarily along borders Venezuela shares with Brazil and Colombia, are supposed to quarantine in temporary shelters for 14 days. Although some critical assistance is provided (including health screenings, access to water and sanitation facilities, and food kits) at points of entry, relief agencies have expressed concern about Venezuela’s capacity and wil ingness to ensure sufficient quarantine and health safety in the reintegration of returnees.67 Abuses of returning migrants by security forces have been reported.68 assistance, international protection, and opportunities to regularize their status.

International Humanitarian Response in Venezuela

International Humanitarian Response in Venezuela Although in 2018 the Maduro government rejected large amounts of humanitarian assistance, beginning in 2019, it permitted U.N. humanitarian entities and partners to increase their humanitarian and protection activities in 2019. The U.N. Office for the Coordination of Humanitarian Affairs (UNOCHA) set up its coordination structure, including regional hubs in the country. The Cooperation and Assistance Coordination Team, led by the U.N. Resident Coordinatorresident coordinator, was , was established in February 2019 to facilitate humanitarian coordination in Venezuela.

. As of August 2020, the humanitarian space had expanded to 129 operational actors implementing 234 projects.69 A needs overview for Venezuela completed in March 2019 indicated significant humanitarian needrequirements across sectors that affected an estimated 7 millionmil ion people. In July 2019, this Norwegian Refugee Council, March 16, 2020. 62 UNOCHA, Humanitarian Response Plan with Humanitarian Needs Overview: Venezuela, July 2020. 63 U.N. High Commissioner for Refugees (UNHCR), “U.N. Refugee Agency Steps Up COVID-19 Preparedness, Prevention, and Response Measures,” March 10, 2020. 64 UNOCHA, “Venezuela: Humanitarians Rapidly Scale Up Response to the COVID-19 Pandemic,” June 7, 2020. 65 UNHCR, “T he Refugee Brief,” July 17, 2020; Anatoly Kurmanaev, Isayen Herrera, and Sheyla Urdaneta, “Venezuela Deploys Security Forces in Coronavirus Crackdown,” New York Times, August 19, 2020. 66 USAID, “Venezuela Regional Crisis,” Fact Sheet #2, FY2020, May 20, 2020. 67 USAID, “Venezuela Regional Crisis,” Fact Sheet #2, FY2020, May 20, 2020. 68 Anatoly Kurmanaev, Isayen Herrera, and Sheyla Urdaneta, “Venezuela Deploys Security Forces in Coronavirus Crackdown,” New York Times, August 19, 2020. 69 UNOCHA, “Venezuela: Humanitarian Response Aims to Assist 4.5 Million People in 2020,” August 3, 2020. Congressional Research Service 16 Venezuela: Background and U.S. Relations people. In July 2019, this assessment resulted in the development of the first Humanitarian Response Plan (HRP) for Venezuela Venezuela and the launch of an appeal for $223 million.⁶⁵mil ion.70 The HRP wasis a collective effort by UNOCHA UNOCHA and implementing partners to coordinate and scale up a response for the most vulnerable people across the country, with assistance in the areas of health, water, sanitation and hygiene, food security, nutrition, protection, shelter and non-food items, and education.⁶⁶ As of November 2019 (latest available), there were 78 operational actors in 24 states and 231 municipalities in Venezuela. Ongoing operational challenges71 The 2020 HRP appeals for $762.5 mil ion, of which $674.6 mil ion is for adjusted humanitarian requirements and $87.9 mil ion is for the COVID-19 response.72 The 2020 HRP builds on the 2019 activities, incorporates the response to the health and socioeconomic impacts of the COVID-19 pandemic, and targets assistance for 4.5 mil ion of the country’s most vulnerable people.73 In addition to adjustments made for COVID-19, ongoing operational chal enges have included broad information gaps on humanitarian needs,; lack of funding,; limited capacity for the response, response; and bureaucratic impediments, such as the indefinite suspension of NGO nongovernmental organization registration. Fuel shortages, power outages, telecommunications problems, intermittent access to water, and security concerns, mostly along the border and in remote areas, have continued to impact humanitarian access and partners’ delivery of assistance. Beginning inimpact humanitarian access and delivery of assistance by partners. UNOCHA's 2020 Global Humanitarian Overview, released in December 2019, requests $750 million for humanitarian efforts in Venezuela. The assistance will target 3.5 million of the estimated 7 million in need.⁶⁷

In 2019, the International Federation of Red Cross and Red Crescent Societies also scaled up humanitarian activities inside Venezuela, in coordination with the Venezuelan Red Cross and with the agreement of both the interim government and Maduro.⁶⁸ The International Committee74 The activities of the Red Cross Movement have focused on different levels of health care within the Venezuelan public health system, access to health care services, and the needs of the most vulnerable populations.75 With the onset of COVID-19, the International Committee of the Red Cross and the Venezuelan Red Cross also have focused on health care workers throughout the country by distributing medical supplies, renovating and instal ing handwashing stations in medical centers, and providing training on preventive measures.76 Red Cross (ICRC), which has been present in Venezuela since 1966, announced an expansion of its work on four pressing humanitarian issues: migration, health, water and sanitation, and detention.⁶⁹ The activities of the Red Cross Movement have been focused on different levels of health care within the Venezuelan public health system, access to health care services, and the needs of the most vulnerable populations (such as detainees or the injured).⁷⁰

International Humanitarian Response in the Region

International Humanitarian Response in the Region The U.N. Secretary-General appointed UNHCR and IOM to coordinate the international response to the needs of displaced Venezuelans and host communities in the region, which includes governments, U.N. entities, nongovernmental organizations (national and international), the Red Cross Movement, faith-based organizations, and civil society. The Regional Interagency Coordination Platform provides a common humanitarian framework for assistance. The U.S. government has also provided humanitarian assistance and helped to coordinate regional response efforts. (See "U.S. Humanitarian and Related Assistance," below.) Former Guatemalan Vice President Eduardo Stein, the U.N. Joint Special Representative for Venezuelan Refugees and Migrants, is charged with promoting dialogue and consensus in the region and beyond on the humanitarian response.

assistanc e. The U.S. 70 By the end of December 2019, a total of $184 million had been received to support humanitarian activities inside and outside the appeal. T he appeal received $55.5 million (24.9% of $223 million). See UNOCHA, 2020 Global Hum anitarian Overview, December 2019. 71 UNOCHA, Venezuela: Humanitarian Response Plan – July – December 2019, July 2019; see also UNOCHA, Venezuela—UN Hum anitarian Scale-Up Situation Report, January-April 2019, May 2019. 72 UNOCHA, Global Humanitarian Response Plan COVID-19, United Nations Coordinated Appeal, April – December 2020, GHRP July Update, July 2020. 73 By the end of 2019, UNOCHA had requested $750 million for humanitarian efforts in Venezuela. UNOCHA, 2020 Global Hum anitarian Overview, December 2019. 74 IFRC, “IFRC to Bring Humanitarian Aid into Venezuela,” March 29, 2019, at https://media.ifrc.org/ifrc/press-release/ifrc-bring-humanitarian-aid-venezuela. 75 International Committee of the Red Cross (ICRC), “Venezuela: Making Access to Health Care a Priority,” September 18, 2019. 76 ICRC, “Venezuela: Helping the Health Care Workers Who Help Us,” July 21, 2020. Congressional Research Service 17 Venezuela: Background and U.S. Relations government also has provided humanitarian assistance and helped to coordinate regional response efforts. (See “U.S. Humanitarian Assistance,” below.) In December 2018, UNHCR and IOM launched the 2019 Regional Refugee and Migrant In December 2018, UNHCR and IOM launched the 2019 Regional Refugee and Migrant Response Plan (RMRP), which was the first of its kind in the Americas: an operational and coordination strategy and an appeal for $738 millionmil ion in funding to support over 2 million mil ion Venezuelans in the region and half a million mil ion people in host communities.⁷¹77 Protection and assistance needs have been significant for arrivals and host communities. Services provided have varied by country but have included support for reception centers and options for shelter; emergency relief items, such as emergency food assistance, safe drinking water, and hygiene supplies; legal assistance with asylum applications and other matters; protection from violence and exploitation; and the creation of temporary work programs and education opportunities. The 2020 RMRP was launched in December 2019 with an appeal for $1.35 billion to reach 4 million appealed for $1.35 bil ion to build on these activities and reach 4 mil ion of the most vulnerable in need across 17 countries in Latin America and the Caribbean.⁷² 78 As of July 2020, the updated RMRP funding appeal increased to $1.4 bil ion, of which $968.8 mil ion was for adjusted humanitarian requirements and $438.8 mil ion was for the COVID-19 response. 79 The Quito Process, a regional coordinating mechanism that has regularly convened countries hosting Venezuelans since 2018, has also helpedalso has helped to harmonize policies and practices among host countries and donors, scale up the humanitarian response, and facilitate the response to refugees and migrants across the region.

The International Solidarity Conference on the Venezuelan Refugee and Migrant Crisis was held in Brussels, Belgium, on October 28-29, 2019. Co-chaired, was cochaired by the European Commission, UNHCR, and IOM, the. The conference aimed to raise global awareness about the Venezuela regional refugee and migrant crisis, and it focused on the response, particularly by host countries and communities, the need for international support and coordination, as well asand the development of partnerships between public and private sectors and additional funding.⁷³ There were 120 delegations in attendance. Pledges made during the conference totaled approximately 150 million euros ($167 million.)⁷⁴ Looking ahead, the conference supported the decision to hold a first meeting of the Group of Friends of the Quito Process to be chaired by the European Union. It also called for a pledging conference in 2020.

Foreign Involvement in Venezuela'.80 Building on this meeting, on May 26, 2020, donors pledged $2.79 bil ion at the International Donors Conference in Solidarity with Venezuelan Refugees and Migrants in Latin America and the Caribbean.81 International Actors in Venezuela’s Crisis s Crisis

The international community remains divided over how to respond to the political crisis in Venezuela. One group of countries supports the Guaidó government, another supports Maduro, and a third group of countries—including Mexico, Norway, Uruguay, and some Caribbean nations—has remained neutral in the crisis. These divisions have thus far stymied action by the United Nations or the Organization of American States (OAS) to help facilitate a political solution to Venezuela's crisis. They also undermined the Norway-facilitated dialogue (discussed below), as many experts argue that pressure from external allies of Maduro (Russia, China) and Guaidó (United States) may be necessary for any negotiations to succeed.⁷⁵

While the EU and most of its member states recognize Guaidó as interim president and condemned Maduro's recent attempt at a "parliamentary coup" against him, the EU has opposed the prospect of military intervention in Venezuela.⁷⁸ The European Parliament has pledged to increase its diplomatic involvement in the Venezuela crisis, expand targeted sanctions against Maduro officials, and extend sanctions to the families of Maduro officials. The EU-backed International Contact Group (ICG)—composed of Costa Rica, Ecuador, France, Germany, Italy, the Netherlands, Panama, Portugal, Spain, Sweden, the United Kingdom, and Uruguay—first convened in February 2019. The group aimed to "establish necessary guarantees for a credible electoral process, within the earliest time frame possible" and to hasten the delivery of humanitarian aid into Venezuela.⁷⁹ Those "necessary guarantees"crisis in Venezuela. The United States, Canada, most of the member states of the European Union (EU), Australia, Japan, 77 T he plan included U.N. entities, nongovernmental organizations (NGOs), faith-based organizations, and civil society and was in cooperation with the Red Cross Movement. See U.N. Coordination Platform for Response for Venezuelans, Regional Refugee and Migrant Response Plan for Refugees and Migrants from Venezuela , January-Decem ber 2019, December 14, 2018, which was put together by 95 organizations covering 16 countries. At the end of 2019, this appeal was 51.9% funded. See UNOCHA, 2020 Global Hum anitarian Overview, December 2019. 78 U.N. Coordination Platform for Refugees and Migrants from Venezuela, Response for Venezuelans (RV4), Refugee and Migrant Response Plan 2020: January – Decem ber 2020, December 2019. 79 UNOCHA, Global Humanitarian Response Plan COVID-19, United Nations Coordinated Appeal, April – December 2020, GHRP July Update, July 2020. 80 European Commission (EU), International Organization for Migration (IOM), U.N. High Commissioner for Refugees (UNHCR), “ EU, IOM and UNHCR Express Solidarity with Venezuelan Refugees and Migrants,” October 29, 2019. Pledges made during the conference totaled approx imately 150 million euros ($167 million.) European Commission, “Remarks by High Representative/Vice-President Federica Mogherini at the Press Conference Following the International Solidarity Conference on the Venezuelan Refugee and Migrant Crisis,” October 29, 2019. 81 U.N. News, “U.N. Agencies Welcome Donor Pledges for Venezuelan Refugees and Migrants,” May 27, 2020. Congressional Research Service 18 Venezuela: Background and U.S. Relations Israel, South Korea, and 16 Western Hemisphere countries recognize Juan Guaidó as interim president and support a peaceful transfer of power from Maduro to an elected government. Meanwhile, Russia, China, Cuba, Turkey, Iran, and others support Maduro, his government, and its claim to power. A third group of countries—including Mexico, Norway, Uruguay, and some Caribbean nations—has remained neutral in the crisis. Some observers maintain that divisions among global powers undermined a Norway-facilitated dialogue in 2019. Without pressure from their primary external al ies (China and Russia for Maduro, the United States and the EU for Guaidó), those observers maintain that neither side viewed negotiations as the best option.82 Canada, Switzerland, and the EU have condemned antidemocratic actions by the Maduro government and issued targeted sanctions against Maduro government officials, with the most recent EU sanctions imposed in June 2020. These countries have not imposed broad economic sanctions as the United States has done. In general, these countries favor a negotiated solution to the crisis and oppose military intervention in Venezuela. Since February 2019, the EU-backed International Contact Group—composed of Argentina, Costa Rica, Ecuador, France, Germany, Italy, the Netherlands, Panama, Portugal, Spain, Sweden, the United Kingdom, and Uruguay—has sought to “establish necessary guarantees for a credible electoral process, within the earliest time frame possible” and to hasten the delivery of humanitarian aid into Venezuela.83 The EU is pushing for a delay in the December 2020 legislative elections and has refused to monitor those elections under the current circumstances.84 The OAS under Secretary-General Luis Almagro has been active on Venezuela, but some member states, including countries in the Caribbean Community, assert that Almagro has sided too strongly with the Guaidó-led opposition. Nevertheless, resolutions have garnered enough votes (19 of 34 member states) to declare Maduro’s 2018 reelection il egitimate (June 2018) and to not recognize the legitimacy of his second term (January 2019).85 In June 2020, the OAS passed a resolution condemning the Maduro-aligned Supreme Court’s election-related decisions.86 Of the OAS members, some 13 countries remain active in the Lima Group, a group that formed in August 2017 to hasten a return to democracy in Venezuela.87 On August 14, the Lima Group issued a “firm rejection of the il egitimate regime’s announcement of the celebration of parliamentary elections without the minimum guarantees.”88 In addition, 11 OAS member states that are states parties to the Inter-American Treaty of Reciprocal Assistance (Rio Treaty) have 82 Abraham F. Lowenthal and David Smilde, “Venezuela: Is T here a Way Out of T his T ragic Impasse?,” Woodrow Wilson Center, July 2019. 83 T hose “necessary guarantees” include naming a new electoral council, releasing political prisoners, and ending bans on political parties and candidates. 84 “EU Refuses to Monitor Venezuelan Election, Urges Delay,” AP, August 11, 2020. 85 T he Organization of American States (OAS) requires 18 votes to pass a resolution of the Permanent Council. In June 2018, 19 of 34 member states passed a resolution stating that the May 2018 presidential election in Venezuela lacked legitimacy and authorizing countries to take measures, including sanctions, necessary to hasten a return to democracy. In January 2019, the same 19 states approved a resolution that refused to recognize the legitimacy of Maduro ’s second term; called for new presidential elections; and urged all member states to adopt diplomatic, political, and financial measures to facilitate the restoration of democracy in Venezuela. 86 OAS, “ Permanent Council Rejects “Illegitimate” Action of the Venezuelan Court of Justice,” June 27, 2020. 87 T hose countries include Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Honduras, Panama, Paraguay, Peru, St. Lucia, and the Guaidó-led government of Venezuela. 88 Countries that signed the most recent August 14, 2020, Lima Group statement include Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Honduras, Panama, Paraguay, and Peru. For past statements in English, see https://www.international.gc.ca/world-monde/issues_development -enjeux_developpement/response_conflict -reponse_conflits/crisis-crises/venezuela.aspx?lang=eng. Congressional Research Service 19 Venezuela: Background and U.S. Relations imposed targeted sanctions and travel bans on Maduro officials.89 OAS member states general y oppose military intervention in Venezuela. Russia, China, Cuba, Turkey, Iran, and a few other countries support Maduro. Russia and China have blocked U.S.-led efforts at the U.N. Security Council to recognize the Guaidó government. Russia has supported Venezuela’s struggling oil industry, helped Venezuela skirt U.S. oil sanctions, and sent military personnel and equipment, moves that have prompted U.S. condemnation.90 Russia has both economic and geostrategic interests in Venezuela; it has used Venezuela as a platform from which to spread propaganda and Russia-related media.91 Some observers maintain that China’s interest in Venezuela is primarily economic. Others argue that the Chinese have exported technology to help the Maduro government surveil its citizens, block its critics on social media and elsewhere, and deny food and services to those who do not vote in its favor.92 Cuba has provided military and intel igence support to the Maduro government in exchange for subsidized oil. Secretary of State Mike Pompeo maintained in 2019 there were some 2,300 Cuban security personnel in Venezuela, involved in providing security for Maduro and training for Venezuela’s security forces in “torture tactics, domestic spying techniques, and mechanisms of repression.”93 The Maduro government’s main international financial backers, China and Russia, continue to work with it, though they have not recently provided new financing.94 Both countries have sent humanitarian aid during the COVID-19 pandemic and sold food, medicines, and other goods in exchange for oil. China recently agreed to permit the Maduro government postpone its repayment of $19 bil ion in past loans with oil shipments through the end of 2020. Among the other countries that support the Maduro regime, Turkey has purchased large quantities of Venezuelan gold despite U.S. sanctions. Iran has sent tankers of gasoline in exchange for gold despite U.S. sanctions on both countries, provided humanitarian aid, helped rebuild a refinery, and established a supermarket conglomerate in Venezuela. As U.S. sanctions have restricted the Maduro 89 Within the Western Hemisphere, the United States has supported efforts by the OAS to hasten a return to democracy in Venezuela and worked with OAS allies to invoke the Rio T reaty , enabling signatory countries to ban travel and freeze assets of certain individuals and entities associated with the Maduro government. CRS Insight IN11116, The Inter-Am erican Treaty of Reciprocal Assistance and the Crisis in Venezuela , by Peter J. Meyer. 90 See Vladimir Rouvinski, Russian-Venezuelan Relations at a Crossroads, Woodrow Wilson Center, February 5, 2019; V. Rouvinski, Russia’s Continuing Engagem ent with Venezuela in 2019 and Beyond-An Update, Woodrow Wilson Center, February 18, 2020. A February 2019 Defense Intelligence Agency report to Congress stated that Russia’s defense cooperation with Venezuela focuses on equipment sales, on political parties and candidates.

The ICG backed the dialogue process facilitated by Norway (discussed below) and has increasingly coordinated its efforts with the Lima Group. The ICG (and the EU) support free and fair combined presidential/legislative elections "without exclusions."⁸⁰ Their representatives have not said they would reject the results of legislative elections held in 2020, as long as they are held under the right conditions.

Lima Group

The Lima group has denounced human rights violations, efforts to undermine the National Assembly, and other abuses by the Maduro government, but opposed military intervention in the crisis. Representatives from the Lima Group and the ICG met at the ministerial level in June and in September 2019. On January 6, 2020, 12 members of the Lima Group issued a statement welcoming Guaidó's reelection as President of the National Assembly, condemning actions taken by Maduro against him, and calling for free and fair general (legislative and presidential) elections in Venezuela.⁸³ On February 20, 2020, the Canadian government announced that the Lima Group supported convening constitutionally mandated parliamentary elections in Venezuela in 2020 and "free, fair and credible presidential elections." The statement called for immediate international action to "to stop the human tragedy in Venezuela." Some Lima Group members have subsequently pursued diplomatic efforts to involve Cuba in resolving the Venezuela crisis.

Cuba, Russia, and China

Russia has remained a strong political ally, defense partner, and investor in the Maduro government.⁸⁷ Venezuela was a major market for Russian arms between 2006 and 2013, with an estimated $4 billion in sales (mostly on credit).⁸⁸ Venezuela reportedly had more than 5,000 Russian-made surface-to-air missiles as of 2017, raising concern about the potential for them being stolen or sold to criminal or terrorist groups.⁸⁹ In December 2018, Russia deployed two nuclear capable bombers to Venezuela (the third such deployment since 2008). A February 2019 Defense Intelligence Agency (DIA) report to Congress stated that Russia's defense cooperation with Venezuela focuses on equipment sales, maintenance support, training, naval and air deployments, and probably intelligence cooperation. Russia'’s March 2019 deployment of military personnel to Venezuela drew person nel to Venezuela drew strong criticism from President TrumpT rump. However, Russia has maintained that its military specialists have traveled to Venezuela to service Russian-made military equipment, most recently in September 2019. “ Russian Military Specialists Arrive in Venezuela to Service Equipment,” Reuters, September 25, 2019. 91 U.S. Department of State, Report to Congress on Threat Assessment of Russian-Venezuelan Security Cooperation as required by Section 165(b)(2) of the VERDAD Act of 2019, contained wit hin Div. J of P.L. 116-94, February 24, 2020. 92 Stephen Kaplan and Michael Penfold, “ China-Venezuela Economic Relations: Hedging Venezuelan Bets with Chinese Characteristics,” Woodrow Wilson Center, February 20, 2019; Angus Berwick, “ How ZT E Helps Venezuela Create China-Style Social Control,” Reuters, Nov. 14, 2018; “ Freedom on the Net 2019: Venezuela,” Freedom House; Senate Foreign Relations Committee, The New Big Brother: China and Digital Authoritarianism , July 21, 2020. 93 U.S. Department of State, Secretary of State Michael R. Pompeo, “Interview with Margaret Brennan of CBS Face the Nation,” May 5, 2019; and U.S. Department of State, Secretary of State Michael R. Pompeo, “ Remarks to the Press,” March 11, 2019. 94 Sources for this paragraph include Kristen Martinez-Gugerli, “ T aking Stock of Chinese and Russian Relations with Venezuela,” WOLA, August 10, 2020; Mayela Armas, Corina Pons, “Exclusive: Venezuela Wins Grace Period on China Oil-for-Loan Deals, Sources say,” Reuters, August 12, 2020; Armas and Pons, “ Exclusive: Venezuela Removed Six T onnes of Central Bank Gold at T urn of Year—Sources,” Reuters, March 12, 2020; Ian T alley and Benoit Falcon, “Iranian Military-Owned Conglomerate Sets Up Shop in Venezuela,” Wall Street Journal, July 5, 2020. Congressional Research Service 20 link to page 31 link to page 31 link to page 37 Venezuela: Background and U.S. Relations government’s access to licit revenue, the il icit linkages between Venezuela and actors in some of those countries have become more apparent (see also “Venezuela Petroleum Trade with Non-U.S. Entities” and “U.S. Efforts to Combat Il icit Revenue Sources,” below). U.S. Policy The United States historical ymilitary equipment, most recently in September 2019.⁹⁰ Some sources maintain that Russian military specialists also have been used to assist training Venezuela's Bolivarian National Militia, while others state they have largely been used to protect Russian business interests.⁹¹

Dialogue Facilitated by Norway

U.S. Policy

The United States has historically had close relations with Venezuela, a major U.S. foreign oil supplier, but friction in relations increased under the Chávez government and has intensified under the Maduro government. For more than a decade, U.S. policymakers have had concerns about the deterioration of human rights and democratic conditions in Venezuela and the lack of bilateral cooperation on counternarcotics and counterterrorism efforts. During this time, Congress has provided funding to support democratic civil society in Venezuela. As Madurothe Maduro government has become increasingly authoritarian, the Obama and Trump Administrations have increasingly turned to sanctions, first targeted on specific officials and then aimed at broader portionssectors of the Venezuelan economy, the Maduro government, and most recently, companiesentities supporting that government.

U.S. policy has toughened since the U.S. government ceased to recognize Maduro as Venezuela’s legitimate president in January 2019 after his fraudulent May 2018 reelection. Since recognizing the Guaidó government in January 2019, the Trump Administration has coordinated its efforts with Interim President Guaidó and the nearly 60 countries who recognize his government. U.S. strategy has emphasized diplomatic efforts to bolster support for Guaidó and isolate Maduro; targeted sanctions and visa revocations on Maduro government officials and their families along with broader sanctions on the economy and government; assistance for the Venezuelan people and the interim government; and actions to cut off the Maduro government’s sources of il icit revenue.95 In early 2019, President Trump and other top officials suggested that U.S. military intervention in Venezuela was a possibility.96 After U.S. al ies (the EU and the Lima Group) and Members of Congress expressed opposition to that prospect (see H.R. 1004 and S.J.Res. 11), such statements became much less frequent.97 In March 2020, the Administration issued a “democratic transition framework” backed by Guaidó. The framework would lift certain sanctions in exchange for Maduro releasing political prisoners, having foreign security forces leave the country, and al owing the creation of a Council of State to carry out presidential duties until elections can be held. Even as Maduro-aligned actors in Venezuela are pushing forward with election preparations, the United States and members of the Lima Group, the EU, and the International Contact Group issued a statement on August 14, 2020, endorsing the formation of a transition government to organize presidential elections.98 The 116thwith broader sanctions on the economy and government; and humanitarian and development assistance.⁹⁶ A year later, Maduro remains in power despite U.S. and international pressure, protests led by Guaidó, and an ongoing economic crisis. The United States is now encouraging Venezuela to convene legislative and presidential elections overseen by a "negotiated transitional government," conditions that Maduro is unlikely to accept.⁹⁷ Guaidó received a warm welcome from President Trump and congressional leaders in a February 2020 visit to Washington, DC, but it is yet unclear how he and his supporters will be able to hasten a democratic transition in 2020.

The 116^th Congress has enacted legislation to guide U.S. policy on Venezuela, appropriated foreign assistance to support the people of Venezuela and to address the Venezuela regional migration crisis, and conducted numerous oversight hearings on U.S. policy towards Venezuela. In December 2019, Congress enacted P.L. 116-94, , which appropriates $30 millionmil ion in FY2020 95 U.S. Department of State, “U.S. Government Support for the Democratic Aspirations of the Venezuelan Pe ople,” accessed August 17; 2020; T estimony of Elliott A. Abrams, Special Representative for Venezuela, U.S. Department of State, in U.S. Congress, Senate Committee on Foreign Relations, August 4, 2020. Hereinafter: Abrams testimony, August 4, 2020. 96 T he White House, “ Remarks by President T rump to the Venezuelan American Community ,” February 18, 2019 97 Secretary of State Michael Pompeo denied any U.S. involvement in the botched raid against Maduro in May 2020. See Karen DeYoung, Anthony Faiola, and Alex Horton. “U.S. Denies Involvement in Alleged Venezuela Invasion Attempt as Details Remain Murky,” Washington Post, May 6, 2020. 98 U.S. Department of State, “ Joint Declaration of Support for Democratic Change in Venezuela,” August 14, 2020. Congressional Research Service 21 link to page 43 link to page 34 Venezuela: Background and U.S. Relations in FY2020 assistance for democracy programs in Venezuela and incorporates the Senate-reported VERDAD Act (S. 1025) as Division J, Title 1 (seesee Appendix A). The VERDAD Act incorporated House-passed measures authorizing FY2020 humanitarian aid to Venezuela (H.R. 854), restricting the export of defense articles to Venezuela (H.R. 920), and requiring a U.S. strategy to counter Russian influence in Venezuela (H.R. 1477) Appendix A). Among other provisions, the measure authorizes $400 mil ion $400 million in FY2020 humanitarian aid for the Venezuela crisis, authorizes $17.5 millionmil ion to to support the convening of elections with international observers, and extends sanctions for corruption and human rights violations through 2023.⁹⁸99 In July 2019, the House passed H.R. 549, , which would allowal ow Venezuelan nationals in the United States to apply for Temporary Protected Status.⁹⁹100 On July 30, 2019, a Senate effort to pass H.R. 549 by unanimous consent failed. Congress is considering the Administration'’s FY2021 request for $205 million in assistance to Venezuela.

U.S. Sanctions on Venezuela

Venezuela. (For a discussion of congressional action, see “U.S. Assistance” section below.) U.S. Sanctions on Venezuela101 The United States has increasingly employed sanctions as a policy tool in response to activities of the Venezuelan government and Venezuelan individuals. As the political and economic crisis in Venezuela Venezuela has deepened, the Trump Administration has significantly expanded sanctions on Venezuela, relying on both existing authorities and new executive orders. Beginning in August 2017, those executive orders established financial sanctions on the Maduro government (including PdVSA), created economic sanctions on sectors of the economy, and prohibited unlicensed transactions with the Maduro government. The Administration has cited the Maduro government'government’s human rights abuses, usurpation of power from the National Assembly, and rampant public rampant corruption as reasons for expanding U.S. sanctions. (For a discussion of the impact of U.S. oil sanctions on Venezuela's oil industry and U.S.-Venezuelan petroleum trade, see "Petroleum Sector Concerns and U.S. Economic Sanctions" below.)

Targeted Sanctions on Venezuelan Officials

Sanctions Restricting Venezuela's Access to U.S. Financial Markets

Sanctions on Sectors of the Venezuela Economy

Sanctions on the Maduro Government and Persons Transacting with or Assisting That Government

Debate over the Efficacy of U.S. Sanctions on Venezuela

In terms of the sanctions' political effects, the imposition of targeted sanctions on individuals in the Maduro government has not encouraged many of those who were not yet sanctioned to abandon Maduro or changed the behavior of the sanctioned individuals. While some have praised the Administration for removing the sanctions on General Figuera, others have questioned how willing or able the U.S. government will be to lift sanctions on others, particularly in cases involving the Kingpin Act or for those who face U.S. criminal indictments. Observers have urged the Administration to coordinate the imposition or removal of future sanctions, including travel restrictions, with allies such as the EU and Canada, which have enacted similar sanctions.¹¹⁰ Broader U.S. sanctions adopted since 2017 have yet to compel Maduro to leave office despite the country's increasingly dire economic situation. They have also provided a scapegoat on which Maduro has blamed the country's economic problems.

Petroleum Sector Concerns and U.S. Economic Sanctions¹¹¹

Oil production in Venezuela has been generally declining since the beginning of 2011, according to one source (see Figure 4). This downward production trend has been attributed to inadequate investment in and mismanagement of the country's oil production assets. Sanctions imposed by the United States since 2017 that target Venezuela's oil sector and PdVSA—the state-controlled oil company—have arguably accelerated Venezuela's oil production decline (see Figure 4). However, quantifying actual production volumes affected by U.S. sanctions is difficult due to the downward production trend observed prior to sanctions being imposed.¹¹³

Economic sanctions that target Venezuela's oil sector are the  Visa Revocations and Sanctions on Individuals. Since January 2019, the State Department has revoked more than 1,000 visas, including those of current and former Venezuelan officials and their families.102 The Treasury Department has imposed financial sanctions on a total of nearly 150 Venezuela-linked individuals for terrorism (E.O. 13224); drug trafficking (Foreign Narcotics Kingpin Designation Act, P.L. 106-120, Title VIII; 21 U.S.C. 1901 et seq.); and/or committing antidemocratic actions, human rights violations, or corruption (see E.O. 13692 in 2014 as codified in P.L. 113-278 and extended in P.L. 114-194 and, most recently, in P.L. 116-94). 99 P.L. 116-94 required several reports from the State Department to Congress on Venezuela, including a report on accountability for human rights abuses committed by the Maduro government. U.S. Department of State, Report on the Former Maduro Regime’s Accountability for Crimes Against Humanity. 100 Congress created T emporary Protected Status (T PS) in 1990 (P.L. 101-649) to provide relief from removal and work authorization for foreign nationals in the United States from countries experiencing armed conflict, natural disaster, or other extraordinary conditions that prevent their safe return. H.R. 549 would add Venezuela to the list of countries designated for T PS. T his designation would last for 18 months and could be extended by the Secretary of Homeland Security. Venezuelans who have been continuo usly present in the United States since the date of enactment and who meet certain other requirements would be eligible to apply for T PS. See CRS Report RS20844, Tem porary Protected Status: Overview and Current Issues, by Jill H. Wilson. T he Administration has not supported T PS for Venezuelans, though U.S. officials assert that Venezuelans are not being subject to removal. U.S. Congress, Senate Committee on Foreign Relations, Venezuela, 116th Cong., 2nd sess., August 4, 2020. 101 For more detailed information, see CRS In Focus IF10715, Venezuela: Overview of U.S. Sanctions, by Clare Ribando Seelke. 102 U.S. Congress, Senate Committee on Foreign Relations, Venezuela, 116th Cong., 2nd sess., August 4, 2020. Congressional Research Service 22 Venezuela: Background and U.S. Relations  Financial sanctions restricting Maduro government and state oil company, PdVSA, access to U.S. financial markets, with certain exceptions to minimize the impact on the Venezuelan people and U.S. economic interests (E.O. 13808 in August 2017);103 prohibiting transactions using cryptocurrency (E.O. 13827 in March 2018);104 and barring the purchase of Venezuelan debt or accounts receivable with the Venezuelan government, including PdVSA (E.O. 13835 in May 2018).105  Sectoral sanctions blocking assets and prohibiting unlicensed transactions with PdVSA, Venezuela’s central bank, and the state gold mining company, among other entities (E.O. 13850 in November 2018).106  Sanctions on the Maduro government blocking assets in the United States and prohibiting transactions with that government unless authorized as part of efforts to aid the Venezuelan people. E.O. 13884 also authorized financial sanctions and visa restrictions on non-U.S. persons who assist or support the Maduro government To al ow continued humanitarian assistance, OFAC issued licenses authorizing transactions involving the delivery of food, agricultural commodities, and medicine; personal remittances; the work of international organizations; and communications services (E.O. 13884 in August 2019).107 The U.S. government has coordinated its targeted sanctions policies with the EU and Canada. The Rio Treaty has become the means for U.S. efforts to build capacity and wil in Latin America and the Caribbean to sanction Maduro officials.108 The Trump Administration demonstrated some flexibility in its sanctions policy with the lifting of sanctions against the former head of Venezuela’s intel igence service, General Manuel Cristopher Figuera, in May 2019 after he broke ranks with Maduro. Although some have praised the Administration for removing the sanctions on General Figuera, others have questioned how wil ing or able the U.S. government would be to lift sanctions on others, particularly for those who face U.S. criminal indictments. Since 2017, the Trump Administration has significantly ratcheted up economic pressure on Venezuela and on Cuba for its support of Venezuela.109 It is difficult to attribute precisely the extent of Venezuela’s economic collapse that is due to U.S. sanctions versus broad economic mismanagement. Between 2017 and 2019, Venezuela’s economy contracted by an average of 23.4% each year, oil production fel by about 60%, inflation grew to 17,000%, and annual 103 E.O. 13808, “Imposing Additional Sanctions with Respect to the Situation in Venezuela,” 82 Federal Register 41155-41156, August 24, 2017. 104 E.O. 13827, “T aking Additional Steps to Address the Situation in Venezuela,” 83 Federal Register 12469-12470, March 19, 2018. 105 E.O. 13835, “Prohibiting Certain Additional T ransactions with Respect to Venezuela,” 83 Federal Register 24001-24002, May 21, 2018. 106 E.O. 13850, “Blocking Property of Additional Persons Contributing to the Situation in Venezuela,” 83 Federal Register 55243-55245, November 1, 2018. 107 Executive Order 13884, “Blocking Property of the Government of Venezuela,” 84 Federal Register 38843- August 5, 2020. 108 U.S. Department of State, Report on Developing and Implementing a Coordinated Sanctions Strategy with Partners in the Western Hem isphere and the European Union, February 24, 2020. 109 See CRS Report R45657, Cuba: U.S. Policy in the 116th Congress, by Mark P. Sullivan. Congressional Research Service 23 link to page 30 Venezuela: Background and U.S. Relations government budget deficits exceeded 20% of GDP.110 The Maduro government has defaulted on al its bonds, and U.S. sanctions prohibit debt restructuring with creditors. In terms of the sanctions’ political effects, the imposition of targeted sanctions on individuals in the Maduro government has not encouraged many of those who were not yet sanctioned to abandon Maduro or changed the behavior of the sanctioned individuals. Broader U.S. sanctions adopted since 2017 have yet to compel Maduro to leave office, despite the country’s increasingly dire economic situation. They also have provided a scapegoat on which Maduro has blamed the country’s economic problems, including recent gasoline shortages and COVID-19. U.N. officials, some experts, and some Members of Congress have urged the Administration to ease financial and sectoral sanctions on Venezuela, even if Maduro remains in office, so the country can address COVID-19.111 The Administration, which has continued to impose sanctions during the pandemic, has maintained that U.S. sanctions on Venezuela include broad exemptions and authorizations to al ow the provision of humanitarian assistance and the export of food, medicine, and medical devices, even as the sanctions are designed to limit the Maduro government’s access to sources of revenue.112 Petroleum Sector Concerns and U.S. Economic Sanctions113 Venezuela’s petroleum sector is a critical element of the country’s economy. Estimates for calendar year 2018 indicate that oil revenues provided approximately 99% of Venezuela’s export earnings.114 The importance of oil to Venezuela’s economy has resulted in this sector being a target of U.S. economic sanctions. Oil production in Venezuela has been general y declining on an annual basis since 2006, when production averaged over 3.3 mil ion barrels per day.115 This downward production trend has been largely attributed to inadequate investment in and mismanagement of the country’s oil production assets, such as subsidizing the domestic market and some exports, as wel as changes to oil production fiscal and regulatory frameworks.116 Sanctions imposed by the United States since 2017 targeting Venezuela’s oil sector and PdVSA arguably have accelerated Venezuela’s oil production decline (see Figure 4). However, quantifying actual production volumes affected by U.S. sanctions is difficult due to the downward production trend observed prior to sanctions being imposed.117 110 Economist Intelligence Unit, Country Report: Venezuela, August 5, 2020; U.S. Energy Information Administration. 111 “Ease Sanctions Against Countries Fighting COVID-19: UN Human Rights Chief,” UN News, March 24, 2020; Cynthia Arnson and Oriana van Praag, “ Venezuela and the Coronavirus: Another Path Is Possible,” Americas Quarterly, March 30, 2020; Jack Dietch, “ Democrats Push Back on Sanctions, Citing Coronavirus Fears,” Foreign Policy, March 27, 2020. 112 “Fact Sheet: Provision of Humanitarian Assistance and T rade to Combat COVID-19,” Office of Foreign Assets Control (OFAC), U.S. Department of T reasury, April 16, 2020; “ Guidance Related to the Provision of Humanitarian Assistance and Support to the Venezuelan People,” OFAC, U.S. Department of T reasury, August 6, 2017. 113 T his section was authored by Phillip Brown, Specialist in Energy Policy, and summarizes information contained in CRS Report R46213, Oil Market Effects from U.S. Econom ic Sanctions: Iran, Russia, Venezuela , by Phillip Brown. 114 Organization of the Petroleum Exporting Countries (OPEC), Venezuela Facts and Figures, at https://www.opec.org/opec_web/en/about_us/171.htm, accessed February 24, 2020. 115 BP, Statistical Review of World Energy 2020: 69th edition, June 2020. 116 Igor Hernandez and Francisco Monaldi, “Weathering Collapse: An Assessment of the Financial and Operational Situation of the Venezuelan Oil Industry,” Center for International Development at Harvard University, Nov. 2016. 117 For an analysis of the impact of U.S. sanctions on the Venezuelan economy, including an approach to quantifying Congressional Research Service 24 Venezuela: Background and U.S. Relations Figure 4. Venezuela Crude Oil Production and U.S. Imports (January 2014-June 2020) Sources: Venezuela’s crude oil production from Energy Intel igence Group’s Oil Market Intel igence publication, accessed from the Bloomberg Terminal (subscription required). U.S. imports of Venezuelan crude oil from the Energy Information Administration. Notes: PdVSA = Petroleos de Venezuela S.A.; E.O. = executive order; bpd = barrels per day. E.O. 13808 imposed additional sanctions based on a national emergency declared in March 2015 (E.O. 13692), including limits imposed on PdVSA access to U.S. debt finance and a provision preventing PdVSA from receiving cash dividends from its U.S.-based Citgo refining and marketing subsidiary. E.O. 13850 authorized prohibiting persons from engaging in transactions with any person determined to have supported “deceptive practices or corruption” involving the government of Venezuela (to include PdVSA). Economic sanctions that target Venezuela’s oil sector are the result of executive orders and administrative actions based on national emergency authorities.118 result of executive orders and administrative actions based on national emergency authorities.¹¹⁴ Since 2017, Venezuela oil-related sanctions to date have generally beengeneral y have focused on three activities: (1) access to short-term debt finance and cash distributions; (2) petroleum trade between the United States and Venezuela; and (3) Venezuela oil sales to transactions with non-U.S. buyers.

Limitations on Financial Access

Since August 2017 (E.O. 13808), PdVSA has been prohibited from engaging in transactions with U.S. persons/entities for new debt with a maturity of greater than 90 days. This limitation has resulted in difficulties for PdVSA paying for oil-related services and the acquisition of oil production equipment. Such difficulties have likely contributed to Venezuela'’s accelerated oil production decline observed since E.O. 13808 was issued. Additionally, . Additional y, the E.O. includes a provision that preventedprevent PdVSA from receiving cash distributions from its U.S.-based Citgo refining and marketing subsidiary. (For the amount of Venezuelan oil production that has been affected by U.S. financial and oil trade sanctions, see Francisco Rodríguez, “Sanctions and the Venezuelan Economy: What t he Data Say,” Torino Economics, June 2019. 118 For additional information about the U.S. economic sanctions framework that affects Venezuela’s oil trade, see CRS Report R46213, Oil Market Effects from U.S. Econom ic Sanctions: Iran, Russia, Venezuela , by Phillip Brown. Congressional Research Service 25 Venezuela: Background and U.S. Relations additional Citgo information, see the text box Citgo’s Uncertain Future: Multiple Creditors, Legal Claims, and New Management, above.) receiving cash distributions from its U.S.-based Citgo refining and marketing subsidiary.

Figure 4. Venezuela Crude Oil Production and U.S. Imports January 2011 – September 2019

Source: Venezuela's crude oil production from Energy Intelligence Group's Oil Market Intelligence publication, accessed from the Bloomberg Terminal (subscription required). U.S. imports of Venezuelan crude oil from the Energy Information Administration. Notes: PdVSA = Petroleos de Venezuela S.A.; E.O. = executive order; bpd = barrels per day. E.O. 13808: additional sanctions based on a national emergency declared in March 2015 (E.O. 13692) including limits imposed on PdVSA access to U.S. debt finance as well as preventing PdVSA from receiving cash dividends from its U.S.-based Citgo refining and marketing subsidiary. E.O. 13850: authorized prohibiting persons from engaging in transactions with any person determined to have supported "deceptive practices or corruption" involving the Government of Venezuela (to include PdVSA).

U.S.-Venezuela Petroleum Trade

U.S.-Venezuela Petroleum Trade Petroleum trade between the United States and Venezuela was effectively terminated as of January 2019, when PdVSA was added to the U.S. Treasury's Specifically’s Specifical y Designated Nationals (SDN) list.¹¹⁵119 The result of this action was the creation of a petroleum supply constraint for which PdVSA and U.S. oil buyers have had to adjust. HistoricallyHistorical y, U.S.-Venezuela petroleum trade was bilateral and generallygeneral y consisted of Venezuela exports of crude oil and U.S. exports of crude oil and petroleum products.¹¹⁶ Recently, this trade relationship has been dominated by Venezuela crude oil exports with certain quality characteristics that are ideallyideal y suited for the configuration of several U.S. refineries. The January 2019 action required U.S. refiners to either source similar crude oil types and other intermediate petroleum products from other suppliers and/or adjust refinery operations to process different crude oil blends. Temporary price dislocations resulted and were reflected in price differentials for benchmarks used to price oil in the U.S. Gulf Coast region.¹¹⁷

120 Economic sanctions imposed on Venezuela also prohibit PdVSA from purchasing diluents—light crude oil and certain petroleum products—from U.S. suppliers. Diluents are used by PdVSA to facilitate transportation and processing of Venezuelan crude oil with high viscosity characteristics. As a result, PdVSA has sourced diluents from other suppliers and modified operations to produce and transport crude oil with reduced access to diluent materials.

Venezuela Petroleum Trade with Non-U.S. Entities

Prohibiting Venezuela petroleum trade with the United States has resulted in Venezuela seeking alternative buyers for oil volumes that were previously destined for the United States and alternative suppliers for diluent and other petroleum products. Venezuela crude oil has continued to be delivered to buyers in China, India, Cuba, and other countries. PdVSA has acquired diluents and other petroleum products from non-U.S. suppliers such as Russia. Treasury' Treasury’s OFAC indicated in January 2019 that petroleum transactions with PdVSA involving any "nexus" any “nexus” of the U.S. financial system were prohibited.¹¹⁸ Additionally, an121 An August 2019 executive order (E.O. 13884) authorizes the blocking of property located in the United States for persons/entities determined to have assisted PdVSA. These elements of the Venezuela oil sanctions frameworkFurthermore, E.O. 13850 provides the framework to designate any person or entity that provides support to the government of Venezuela; such a designation prevents access to the U.S. financial system. These are designed to discourage non- are designed to discourage non-U.S. firms from engaging in petroleum transactions with PdVSA.

On February 18, 2020, Rosneft Trading S.A.—a Swiss-incorporated oil trading firm controlled by Russia's Rosneft Oil Company—was added to the Specifically Designated Nationals list for its Venezuela crude oil brokerage activities.¹¹⁹ Industry estimates indicate that Rosneft Trading S.A. managed approximately 66% of Venezuela crude oil export trade in January 2020.¹²⁰ Treasury's designation of Rosneft Trading S.A. will likely increase financial pressure on PdVSA and the Maduro government. Other brokerage firmsU.S. firms from engaging in petroleum transactions with PdVSA. Efforts to further reduce PdVSA oil transactions with non-U.S. entities have included OFAC actions to sanction oil shipping vessels and trading companies, as wel as to prohibit barter transactions that have provided PdVSA with alternative outlets for oil exports and alternative sources of petroleum imports. Some of these actions include (1) prohibiting transactions with 119 U.S. Department of the T reasury, “Issuance of a New Venezuela-related Executive Order and General Licenses: Venezuela-related Designation,” January 28, 2019. 120 For additional information about price differentials related to sanctions imposed on Venezuela, see CRS Report R46213, Oil Market Effects from U.S. Econom ic Sanctions: Iran, Russia, Venezuela , by Phillip Brown. 121 For additional information, see OFAC’s FAQs, available at https://www.treasury.gov/resource-center/faqs/Sanctions/Pages/faq_other.aspx#650. Congressional Research Service 26 link to page 33 Venezuela: Background and U.S. Relations PdVSA-owned shipping vessels; 122 (2) targeting vessels that transport Venezuelan oil to Cuba;123 (3) sanctioning two Swiss-incorporated oil trading firms—Rosneft Trading S.A. and TNK Trading International S.A.124—controlled by Russia’s Rosneft Oil Company;125 (4) designating other maritime companies and vessels;126 and (5) sanctioning individuals and companies for sanctions evasion related to an al eged “oil-for-food” program.127 These incremental sanction efforts have made it more difficult for Venezuela to sel and export crude oil and likely wil increase financial pressure on PdVSA and the Maduro government. Venezuela’s monthly crude oil exports declined by approximately 90% from January 2017 to June 2020 (see Figure 5). Other entities can trade Venezuela crude oil—reports indicate this is happening—but some of this trade is reportedly in the form of “swap” transactions where, for example, Venezuelan crude oil is exchanged for petroleum products.128 However, happening—but these firms may have to consider the risk of alsoand manage the risks and related consequences of being designated by Treasury.¹²¹ Venezuela Venezuela crude oil exports could continue, although future export volumes are uncertain, and PdVSA may have to incur costs—likely in the form of oil price discounts—in order to compensate traders and buyers to continue oil transactions.

Future Venezuela Oil Production and Trade

Venezuela' Venezuela’s oil production and trade outlook is uncertain. Economic sanctions directed toward PdVSA have impacted Venezuela'’s crude oil trade, and the. The state-owned company has taken, and will likely wil likely continue to take, actions that could enable crude oil sales outside of the sanctions-related trade constraints. In the near term, VenezuelaVenezuelan crude oil trade will likely production and trade likely wil be a function of current sanctions and any additional sanctions that might be imposed by the Administration to discourage non-U.S. oil traders and buyers from transacting with PdVSA.

On February 19, In February 2020, President Maduro declared an "“energy emergency"” and created a commission to focus on increasing PdVSA oil production.¹²²129 The Maduro government has previously indicated that PdVSA aims to produce 2 million an average of 2 mil ion barrels per day annuallyannual y. However, crude oil production in the country has been on a declining trajectory since 2011for many years and has been below 1 million mil ion barrels per day since the beginning of 2019 (see Figure 4).. Since the February 2020 declaration, the Maduro government has placed new leadership at PdVSA and the oil ministry and reportedly has considered restructuring parts of the oil sector to al ow for more foreign investment and participation.130 Exactly what the new PdVSA commission might do and the potential effectiveness of its actions isare unknown. 122 U.S. Department of the T reasury, “Treasury Sanctions Companies Operating in the Oil Sector of the Venezuelan Economy and T ransporting Oil to Cuba,” press release, April 5, 2019. 123 Ibid. 124 U.S. Department of the T reasury, “ Treasury T argets Russian Oil Brokerage Firm for Supporting Illegitimate Maduro Regime,” press release, February 18, 2020; U.S. Department of the T reasury, “ Treasury T argets Additional Russian Oil Brokerage Firm for Continued Support of Maduro Regime,” press release, March 12, 2020. 125 Rosneft subsequently sold its Venezuela assets and trading companies dealing with PdVSA to a company owned by the Russian Government. See Rosneft, “Rosneft Sells It Venezuelan Assets and Becomes an Owner of 9.6% of its Share Capital,” press release, March 28, 2020, 126 U.S. Department of the T reasury, “ Treasury T argets Maritime Entities for Supporting Illegitimate Maduro Regime in the Venezuela Oil T rade,” press release, June 2, 2020. 127 U.S. Department of the T reasury, “ Treasury T argets Sanctions Evasion Network Supporting Corrupt Venezuelan Actors,” press release, June 18, 2020. 128 Lucia Kassai, “Venezuela T anker T racker: July Oil Exports Rebound With India,” Bloomberg News, July 31, 2020. 129 Fabiola Zerpa, “Maduro Declares ‘Energy Emergency,’ Shakes up PDVSA Leadership,” Bloomberg News, February 20, 2020. 130 Fabiola Zerpa, “PDVSA’s New Head Has Been Planning a Drastic Reorganization,” Bloomberg News, April 29, 2020. Congressional Research Service 27 Venezuela: Background and U.S. Relations Figure 5. Venezuela Crude Oil Exports (January 2017-June 2020) Source: Bloomberg L.P. (subscription required), “Future Venezuela Oil Production and Trade.” Some U.S. companies had been al owed to continue operating in Venezuela unknown.

Some U.S. companies continue to operate in Venezuela under a General License (GL) issued and renewed periodicallyperiodical y by OFAC.¹²³131 Chevron, HalliburtonHal iburton, Schlumberger, Baker Hughes, and Weatherford International are currentlypreviously were authorized to continue working with PdVSA to maintain their oil production operations in Venezuela. However, in April 2020, OFAC modified the GL to al ow only for activities limited to essential operations “for the safety or the preservation” of Venezuelan assets.132 This action could result in less oil production in Venezuela from facilities operated by these companies. Increased sanctions pressure on Venezuela’s oil sector has resulted in petroleum trade and industry relationships that general y had not existed in recent history. Venezuela and Iran—two countries subject to stringent U.S. economic sanctions—have been trading with each other. In May 2020, five vessels delivered Iranian gasoline and other petroleum products to Venezuela.133 Further, Iran has provided Venezuela with equipment, supplies, and technical expertise to support PdVSA refinery operations. The U.S. Department of Justice (DOJ) increased pressure on Iranian petroleum shipments to Venezuela by filing a complaint and obtaining a warrant to seize petroleum products aboard four oil tankers.134 U.S. officials announced the seizure of those tankers, which contained more than 1 mil ion barrels of petroleum products, on August 14, 2020.135 131 General License 8 (GL 8), as periodically renewed and revised, had authorized Chevron, Halliburton, Schlumberger, Baker Hughes, and Weatherford International to continue their normal operations in Venezuela. GL 8 is available at https://www.treasury.gov/resource-center/sanctions/programs/pages/venezuela.aspx. 132 Department of the Treasury Office of Foreign Assets Control, General License No. 8F, “Authorizing T ransactions Involving Petroleos de Venezuela, S.A. (PdVSA) Necessary for the Limited Maintenance of Essential Oper ations in Venezuela for the Wind Down of Operations in Venezuela for Certain Entitites,” April 21, 2020. 133 Patricia Laya, Ben Bartenstein, and Fabiola Zerpa. “Venezuela’s Maduro Defends Right to ‘Freely T rade’ with Iran,” Bloomberg News, May 25, 2020. 134 U.S. Department of Justice (DOJ), “Warrant and Complaint Seek Seizure of All Iranian Gasoil Aboard Four T ankers Headed to Venezuelan Based on Connection to IRGC,” press release, July 2, 2020. 135 U.S. Department of State, “ On U.S. Seizure of Iranian Gasoline Intended for the Illegitimate Maduro Regime,” August 14, 2020. Congressional Research Service 28 Venezuela: Background and U.S. Relations At this time, the future of Venezuela’s oil sector is highly uncertain. Production and trade data indicate an economic sector that is in continuous decline, and reports suggest the condition of production, transportation, and refining assets is eroding. Current oil market conditions (i.e., relatively low prices, large global inventories, and an uncertain supply/demand balance) enable the United States to continue tightening Venezuela sanctions with limited risk of price escalation and negative impacts on consumers. Market conditions could change (e.g., supply shortage, low inventories, and relatively high prices) in the future, at which point Venezuelan crude oil production and trade could provide a source of supply that might contribute to a balanced market and price moderation. A decision to ease sanctions on Venezuela’s oil sector in response to high global oil prices—should such a market condition be realized—could conflict with U.S. foreign policy objectives. However, the ability of Venezuela’s oil sector to quickly return to even pre- sanction levels is questionable and may require large amounts of investment and human capital. Chal enging operating conditions in Venezuela may require expert-level management, engineering, and other technical competencies for the oil sector to begin the recovery process. Investment likely would be required to mobilize needed personnel and acquire the technology, equipment, and supplies needed to revitalize oil production, transportation, and refining assets. Sources for such investments and the time frame for completing projects deemed necessary are unknown. Furthermore, even when considering the possibility of political leadership change in the country, the outlook for oil production in Venezuela is uncertain. Regulatory and fiscal frameworks may need to be modified, oil market fundamentals (i.e., supply and demand) may be evaluated, and global environmental policies may need to be considered before investment capital is committed to Venezuela’s oil sector. U.S. Assistance Humanitarian Assistance (Including COVID-19 Assistance)136 with PdVSA in order to maintain their operations in Venezuela. The current license expires on April 22, 2020.

U.S. Assistance

Humanitarian and Related Assistance¹²⁴

The U.S. government is providing humanitarian and emergency food assistance to Venezuela and helping to coordinate and support regional response efforts. As of February 12, 2020, the United States has provided $472.4 million for the Venezuelan crisis since FY2017, of which more than $416.4 million was forMay 2020, since FY2017, the Administration had provided more than $610.6 mil ion in humanitarian funding for the Venezuela regional crisis, including $534.4 mil ion to support Venezuelan refugees and migrants who fled to other countries or for the communities hosting them, and $56 million was for emergency needs in Venezuela in FY2018-FY2019.¹²⁵ and $76.2 mil ion for humanitarian relief activities inside Venezuela (since FY2018).137 As of July 29, 2020, the State Department announced $13.7 mil ion in COVID-related humanitarian assistance to the Venezuelan people.138 (Humanitarian funding is drawn primarily from the global humanitarian accounts in annual Department of State-Foreign Operations appropriations.139) The U.S. military has also twice deployed a naval hospital ship on medical support deployments.¹²⁶

Democracy and Developmenttwice deployed 136 Written by Rhoda Margesson, Specialist in International Humanitarian Policy. 137 USAID, “Venezuela Regional Crisis,” Fact Sheet #2, FY2020, May 20, 2020. T hese amounts do not include all COVID-19 supplemental funding to the region. 138 State Department, “State Department Update: T he United States Continues to Lead the Global Response to COVID-19,” July 29, 2020. COVID-19 supplemental funding included $9 million provided through USAID/Bureau of Humanitarian Assistance (International Disaster Assistance/IDA account) and $4.7 million through the State Department/Bureau of Population, Refugees and Migration/PRM (Migration Refugee Assistance/MRA account). 139 U.S. humanitarian assistance for the Venezuela Regional Crisis is drawn primarily from three global humanitarian accounts, including Migration Refugee Assistance (MRA) administered through the State Department, and International Disaster Assistance (IDA) and T itle II, PL 480 (Emergency Food Assistance), which are both administered through USAID. Congressional Research Service 29 link to page 36 Venezuela: Background and U.S. Relations a naval hospital ship on medical support deployments.140 In keeping with international humanitarian standards, U.S. humanitarian assistance is general y provided on the basis of need and according to principles of universality, impartiality, and independence.141 Democracy, Development, and Global Health-Related Assistance -Related Assistance

For more almost two decades, the United States has provided democracy-related assistance to Venezuelan Venezuelan civil society through the U.S. Agency for International Development (USAID) and the National Endowment for Democracy (NED).

From FY2002- From FY2002 to FY2010, USAID supported smallsmal -grant and technical assistance activities through its Office of Transition Initiatives (OTI) to provide assistance monitoring democratic stability and strengthening the county'’s democratic institutions. USAID'’s Latin America and Caribbean Bureau assumed control over those programs in FY2010. Since FY2010, USAID democracy programs in Venezuela have been funded primarily through the Economic Support Fund (ESF) account. In recent years, U.S. democracy and human rights assistance appropriated to Venezuela Venezuela amounted to $17.5 millionmil ion in FY2019 (P.L. 116-6) and $30 millionmil ion in FY2020 (P.L. 116-94).

In addition to the democracy-related ESF assistance appropriated by Congress, the Administration reprogrammed FY2018 foreign assistance, some previously appropriated for Central America, to help the interim government and civil society prepare for a political transition (see Table 1).¹²⁸ ). USAID signed a new bilateral bilateral agreement with the Guaidó government in October 2019 to expand its democracy and human rights-related programs in Venezuela and start new health and agriculture programs. This expansion in programming supports the goals of the interim government to facilitate a transition to democracy and start to rebuild key sectors damaged by the economic crisis. Although most of the assistance supports programs in Venezuela, some is also funding work-related travel, salaries, and secure communications systems for interim government officials and staff.¹²⁹142 In addition to the democracy-related ESF assistance appropriated by Congress, the Administration has reprogrammed additional Development Assistance (DA), Global Health Program (GHP), and Democracy Fund (DF) assistance (See Table 1).143 The funding is being administered primarily through third -party contractors. Should a political transition occur, the State Department and USAID have developed plans to support the interim government's ’s transition plan, Plan País.144 140 In December 2018, the U.S. Navy hospital ship USNS Comfort completed an 11-week medical support deployment to work with government partners in Ecuador, Peru, Colombia, and Honduras, in par t to assist with arrivals from Venezuela. T he USNS Com fort completed another five-month deployment that began in June 2019 and included missions in South American, Central American, and Caribbean countries that are hosting Venezuelan migrants. 141 USAID, Office of Foreign Disaster Assistance, Policy for Humanitarian Action, October 2015. In February 2019, at the request of Interim President Guiadó, the U.S. government pre-positioned assistance (food, health, hygiene, and nutrition commodities) for the Venezuelan people on the Colombia- and Brazil-Venezuela borders. Security forces loyal to Maduro prevented the delivery of the h umanitarian assistance. A broad range of humanitarian organizations, including U.N. entities, the ICRC, and NGOs, expressed concern not just about the many logistical and security problems in delivering assistance to Venezuela but also about the prospect of humanitarian aid being used as a tool in a political contest. 142 USAID, Congressional Notification (CN) #157, July 11, 2019. 143 USAID, “USAID Administrator Mark Green with Venezuelan Ambassador to the U.S. Carlos Vecchio on Milestone Bilateral Development Agreement ,” October 8, 2019; U.S. Department of State, Report to Congress on a Com prehensive Strategy Base on Various Political Scenarios in Venezuela, February 24, 2020. 144 U.S. Department of State, Report to Congress on a Comprehensive Strategy Base on Various Political Scenarios in Venezuela, February 24, 2020. Congressional Research Service 30 link to page 36 link to page 36 link to page 36 link to page 36 link to page 36 link to page 36 link to page 36 Venezuela: Background and U.S. Relations Table 1. U.S. Foreign Assistance to Venezuela by Account: FY2017transition plan, Plan País.¹³⁰

b. This total includes $450,000 in ESF notified on August 6, 2020, to combat il egal y armed groups in Venezuela. For FY2021, the Administration requested $5 mil ion in global health assistance for Venezuela and $200 mil ion in Economic Support and Development Fund funds to support a democratic transition in Venezuela, as wel as humanitarian assistance for Venezuelans who have fled and the communities hosting them. According to the request, the budget includes “programming flexibility” to “support a democratic transition and related needs in Venezuela should circumstances warrant.” The Administration had requested the authority to transfer up to $500 mil ion between foreign aid accounts to support a democratic transition or respond to a crisis in Venezuela in FY2020; Congress did not approve that request in P.L. 116-94. The House-passed version of the FY2021 Department of State, Foreign Operations, and Related Programs appropriations bil , Division A of H.R. 7608 (H.Rept. 116-444), approved July 24, 2020, would provide not less than $30 mil ion for programs in Venezuela. H.Rept. 116-444 expresses support for the provision of additional assistance in the event that there is a democratic transition. The report also urges the administrator of USAID to provide International Disaster Assistance and Migration and Refugee Assistance help to respond to humanitarian needs resulting from the Venezuelan migration, both inside Venezuela and in the region. H.Rept. 116-444 directs Voice of America to continue to focus programming in Venezuela and urges the Open Technology Fund to focus on preserving internet freedom in Venezuela. The National Endowment for Democracy (NED) has funded democracy projects in Venezuela since 1992. U.S. funding for NED is provided in the annual State Department and Foreign Operations appropriations measure, but country allocationsal ocations for NED are not specified in the legislation. In 2019, NED funded 41 projects in Venezuela totaling more than $2.5 mil ion. Congressional Research Service 31 link to page 41 link to page 41 Venezuela: Background and U.S. Relations U.S. Efforts to Combat Illicit Revenue Sources While financial sanctions have sought to limit Maduro’s licit revenue sources and punish those who have stolen bil ions from PdVSA and government programs, criminal investigations and antidrug operations have targeted il icit revenue earned by the Maduro government. Venezuela is ranked among the most corrupt countries in the world. In 2019, Venezuela ranked 173 out of 180 countries covered in Transparency International’s Corruption Perceptions Index.145 High-level officials, many from the military, reportedly formed a drug trafficking organization (the Cartel of the Suns) in the early 2000s and have engaged in crimes such as il egal gold mining, weapons trafficking, and money laundering.146 These criminal networks have linkages to foreign terrorist organizations such as the Revolutionary Armed Forces of Colombia (FARC) and the National Liberation Army (ELN).147 The Maduro government al egedly also has ties to terrorist groups such as Hezbollah through various intermediaries (see “U.S. Concerns About Terrorism”).148 Venezuela’s instability, weak institutions, extensive 1,370-mile border with Colombia, and general lawlessness have attracted the attention of il egal y armed groups. The ELN, which is stil engaged in armed conflict in Colombia, and its rival, the Popular Liberation Army, reportedly recruit Venezuelans to cultivate coca, the plant component of cocaine.149 The Rastrojos, a criminal group of former Colombian paramilitaries, reportedly controls important gasoline smuggling routes between Venezuela and Colombia. A February 2020 International Crisis Group study maintains that both FARC dissidents and ELN fighters are heavily involved in il egal gold mining.150 Violence among these and other criminal groups has escalated. 145 U.S. Department of the T reasury, “Treasury Disrupts Corruption Network Stealing From Venezuela’s Food Distribution Program, CLAP,” July 25, 2019. 146 A May 2018 report by Insight Crime identified more than 120 high -level Venezuelan officials who have engaged in criminal activity. Insight Crime, Venezuela: A Mafia State? May 2018. 147“Cartel of the Suns,” Insight Crime, October 31, 2016, at https://www.insightcrime.org/venezuela-organized-crime-news/cartel-de-los-soles-profile/. 148 “Cape Verde Court Approves US Extradition of Maduro Financier for Money Laundering,” Jurist, August 6, 2020. 149 Helen Murphy and Luis Jaime Acosta, “Exclusive: Colombian Armed Groups Recruiting Desperate Venezuelans, Army Says,” Reuters, June 20, 2019. 150 International Crisis Group, A Glut of Arms: Curbing the Threat to Venezuela from Violent Groups, February 2020. Congressional Research Service 32 Venezuela: Background and U.S. Relations Counternarcotics and U.S. Antidrug Prosecutions and Operations Venezuela is a major transit route for cocaine destined for the United States. In 2005, Venezuela suspended its counternarcotics cooperation with the U.S. Drug Enforcement Administration.151 Since 2005, Venezuela has been designated annual ytotaling more than $2.5 million as compared to $2.0 million in 2018.

Organized Crime-Related Issues

Counternarcotics

Since 2005, Venezuela has been designated annually as a country that has failed to adhere to its as a country that has failed to adhere to its international antidrug obligations, pursuant to international drug-control certification procedures in the Foreign Relations Authorization Act, FY2003 (P.L. 107-228). Most recently, in U.S. Indictment of Top Venezuelan August 2019, President Trump again Officials designated Venezuela as a country not On March 26, 2020, Attorney General Wil iam Barr adhering to its antidrug obligations.¹⁴⁰ At the same time, President Trump waived economic sanctions that would have curtailed U.S. assistance for democracy programs.

• Cocaine is trafficked via aerial, terrestrial, and maritime routes. Most drug flights depart from Venezuelan states bordering Colombia. Maritime trafficking includes the use of large cargo containers, fishing vessels, and "go-fast" boats.
• The vast majority of drugs transiting Venezuela in 2019 were destined for the Caribbean, Central America, the United States, West Africa, and Europe. Colombian drug-trafficking organizations—including multiple criminal bands, the Revolutionary Armed Forces of Colombia (FARC), and the National Liberation Army (ELN)—facilitate drug transshipment through Venezuela.
• 152 At the announced the indictment of Venezuela’s leader, Nicolás same time, President Trump waived Maduro, and 14 other current and former high-ranking Venezuelan officials. As charged, Maduro al egedly economic sanctions that would have curtailed participated in the Cartel of the Suns drug trafficking U.S. assistance for democracy programs. organization in conspiracy with the Colombian terrorist organization the Revolutionary Armed Forces of The State Department reported in its 2020 Colombia (FARC) to produce and traffic il icit drugs to International Narcotics Control Strategy the United States. Some 12 of the 18 individuals also are Report (INCSR) that Venezuela was one of subject to U.S. sanctions (related to the situation in the preferred trafficking routes for the transit Venezuela, narcotics trafficking, or both). In addition to of il icit drugs out of South America, narcoterrorism conspiracy, the charges include drug trafficking, money laundering, and weapons charges. The especial y cocaine, because of the country’s State Department is offering a total of up to $55 mil ion porous border with Colombia, economic for information leading to the arrest, conviction, or both crisis, weak judicial system, lacking of five of these individuals (including Maduro). international counternarcotics cooperation, See CRS Insight IN11306, U.S. Indictment of Top and permissive and corrupt environment. Venezuelan Officials. According to the INCSR, Venezuelan authorities "“failed to make demonstrable efforts to combat illegalil egal drug activity and prosecute corrupt officials or suspected drug traffickers, including those sanctioned by the United States government.”153 U.S. authorities have taken action against Maduro officials and their relatives involved in drug trafficking and related crimes.154 On March 2, 2020, the Spanish government approved the extradition of Venezuela’s former intel igence chief, Hugo Carvajal, to the United States to stand trial for drug and weapons trafficking. In March 2019, a U.S. court charged former Vice President Tareck el Aissami with violating the Foreign Narcotics Kingpin Act. In December 2017, two nephews of First Lady Cilia Flores were sentenced to 18 years in a U.S. federal prison for conspiring to transport cocaine into the United States. 151 T he Venezuelan government ended cooperation after alleging that U.S. Drug Enforcement Administration agents were spying on the government, charges U.S. officials dismissed as baseless. Prior to that time, the governments had negotiated an antidrug cooperation agreement (an addendum to a 1978 Bilateral Counternarcotics agreement) that would have enhanced information-sharing and antidrug cooperation. Venezuela never approved that agreement. 152 T he White House, “Presidential Determination—Major Drug T ransit or Major Illicit Drug Producing Countries for Fiscal Year 2020,” August 8, 2019. 153 U.S. Department of State, Bureau of International Narcotics and Law Enforcement Affairs, 2019 INCSR, vol. 1. 154 Sources for this paragraph include the following: “Spain Approves Extradition of Venezuela’s ex -spy Chief to the United States,” Reuters, March 3, 2020; DOJ, U.S. Attorney’s Office, Southern District of New York, “ Venezuelan Minister And Former Vice President T areck Zaidan El Aissami Maddah Charged With Violations Of T he Foreign Narcotics Kingpin Designation Act ,” March 8, 2019. Congressional Research Service 33 Venezuela: Background and U.S. Relations On April 1, 2020, President Trump announced the deployment of additional U.S. naval counterdrug assets to the Caribbean. With cooperation from partner governments, the operation has aimed to curb drug trafficking emanating from Venezuela. U.S. officials have reported that as of August 2020, the operation has seized more than 100 metric tons of cocaine and denied the Maduro government $3 bil ion in il icit revenue.155 corrupt officials or suspected drug traffickers, including those sanctioned by the United States government."¹⁴¹

Money Laundering

Money Laundering and Asset Forfeiture In addition to drug trafficking, the 2020 INCSR discusses Venezuela'’s high level of vulnerability to money laundering and other financial crimes.¹⁴⁴ According to the report, money laundering is widespread in the country and worsened in 2019 as the Maduro government relaxed its controls over foreign exchange, prices, and imports. These policiesThis move resulted in a rapid dollarization of the economy and created opportunities for corruption for those with access to dollars.

dollars. Venezuela revised its laws against organized crime and terrorist financing in 2014 but excluded the government and state-owned industries from the scope of any investigations. The unit charged with investigating financial crimes has limited capabilities, and there is a lack of political will wil in the judicial system to combat money laundering and corruption. Revenue from il icit Venezuela-linked activities has been laundered into accounts, real estate, and other industries around the world. U.S. prosecutors estimate that some $300 bil ion il -gotten Venezuelan wealth is held in south Florida alone, primarily in real estate.156 The March 2020 indictments against senior Venezuelan officials continue DOJ’s decade-long effort to uncover corruption involving Maduro and his associates. Since 2010, DOJ has charged several dozen current or former officials, including a former national treasurer, senior state economic development bank official, military officer, judge, and officials from PdVSA and its subsidiaries. According to the State Department, the U.S. government has coordinated its efforts to identify, confiscate, forfeit, and repatriate il icit Venezuelan assets, including through the U.S. Departments of the Treasury, Justice, and Homeland Security.157 The Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) is the U.S. financial intel igence unit and administrator of U.S. anti-money laundering laws pursuant to the Bank Secrecy Act. FinCEN collaborates with financial intel igence units around the world. The Department of the Treasury’s Executive Office for Asset Forfeiture administers the Treasury Forfeiture Fund, a federal fund for forfeitures that are the result of actions by selected participating agencies, and DOJ administers a separate assets forfeiture fund.158 Some observers have expressed concern that U.S. seizures of Venezuelan assets may be used for U.S. law enforcement entities and have advocated that they instead be redistributed to the Guaidó administration or toward a charitable cause that would benefit the Venezuelan people.159 According to press reporting, the Administration intends to permit the Guaidó government to use $20 mil ion in forfeited assets to 155 For initial results of that effort, see T he White House, “ Remarks by President T rump in Briefing on SOUT HCOM Enhanced Counternarcotics Operations,” July 10, 2020; Abrams testimony, August 4, 2020; 156 Joshua Goodman, “U.S. Prosecutor in Miami T argeting Venezuela Graft Is Leaving,” AP, August 14, 2020. 157 U.S. Department of State, Report on Recovering Assets Stolen from the Venezuelan People, Section 151 (b) of the Further Consolidated Appropriations Act, 2020 (Division J). 2020. 158 T he T reasury Forfeiture Fund participating agencies are the Internal Revenue Service Criminal Investigations Division, U.S. Immigration and Customs Enforcement, U.S. Customs and Border Protection, U.S. Secret Service, and U.S. Coast Guard. For information on DOJ’s asset forfeiture fund, see https://www.justice.gov/afp/fund/. 159 Michael J. Camilleri and Fen Osler Hampson, “Seize the Money of Venezuelan Kleptocrats to Help the Country and Its People,” Washington Post, January 29, 2019. Congressional Research Service 34 Venezuela: Background and U.S. Relations address the COVID-19 crisis, including the provision of a monthly bonus to health care workers.160 The Treasury Department has helped countries develop the legal and technical capacity to block transactions and seize assets.161 Analysts and U.S. officials have urged European countries and banks to intensify their efforts to detect and seize il icit assets tied to Maduro government.162 Illegal Mining Gold mining, both licit and il icit, has accelerated as the Venezuelan economy has collapsed in the face of low global oil prices and an ongoing political crisis. Over the past few years, a boom in il egal mining in Venezuela to combat money laundering and corruption. In June 2018, a U.S. district judge sentenced the Florida owners of a construction equipment export company who laundered $100 million from Venezuela to bank accounts in the United States and elsewhere.¹⁴⁵ Federal prosecutors are investigating another multi-billion dollar money laundering case involving two former oil sector officials and several others.¹⁴⁶

Illegal Mining

Although more than 95% of Venezuela's export revenue comes from oil and gas exports, gold mining, both licit and illicit, has accelerated as the country's economy has collapsed in the face of low global oil prices and an ongoing political crisis. According to the Global Initiative against Transnational Organized Crime, 91% of gold produced in Venezuela was mined illegally—the highest rate in Latin America, even prior to the current crisis.¹⁴⁷ Over the past few years, a boom in illegal mining in Venezuela has reportedly contributed to deforestation and environmental degradation in indigenous areas, clashes between rival criminal gangs and violence committed by those gangs against miners whom they extort, and an outbreak of malaria (a disease that had been eradicated).¹⁴⁸163 FARC dissidents and the ELN reportedly earn a majority of their income from illegal gold mining.¹⁴⁹il egal gold mining; the Maduro government also has increased its involvement in the sector as licit gold supplies have run out.164 According to numerous reports, the illegalil egal mining industry also commits various human rights violations, including the forcible recruitment of child labor and abuses of indigenous groups, including the Yanomami tribe. The U.S. government has created an interagency gold working group, imposed sanctions on individuals for their involvement in the il icit gold industry, and stepped up border security efforts to detect il icit gold shipments out of Venezuela.165 Human Trafficking Criminal groups, sometimes in collaboration with corrupt officials, have subjected men, women, and children to human trafficking both within Venezuela and abroad, particularly in border regions and the Caribbean coast.166 Within the country, victims are trafficked from rural to urban areas to serve as prostitutes or domestic servants. Venezuelan women and girls are often trafficked abroad for sexual exploitation, and children are trafficked for forced labor and/or are forcibly recruited by FARC dissidents and the ELN. In 2019, researchers documented increasing sex and labor trafficking by il egal y armed groups in mining regions. Venezuelan migrants who have fled abroad lacking identity documents are particularly vulnerable to human trafficking. 160 Karen DeYoung and Anthony Faiola, “Venezuela: T rump Administration T aps Frozen Funds in Effort to Oust Venezuelan Leader,” Washington Post, August 21, 2020. 161 Karen DeYoung and Anthony Faiola, “Venezuela: T rump Administration T aps Frozen Funds in Effort to Oust Venezuelan Leader,” Washington Post, August 21, 2020. 162 Douglas Farah, The Maduro Regime’s Illicit Activities: A Threat to Democracy in Venezuela and Security in Latin Am erica, Atlantic Council, August 13, 2020; Atlantic Council, Transcript: Countering the Maduro Regim e’s Global web of Illicit Activities, August 14, 2020, at https://www.atlanticcouncil.org/commentary/transcript/transcript-countering-the-maduro-regimes-global-web-of-illicit-activities/. 163 Bram Ebus, “Militarization and Mining a Dangerous Mix in Venezuelan Amazon,” Mongabay, December 7, 2017; Maria Isabel Sanchez, “Inside the Deadly World of Venezuela’s Illegal Mines,” AFP, March 19, 2017; Stephanie Nebehay, “Malaria on Rise in Crisis-Hit Venezuela, WHO Says,” Reuters, April 24, 2018. 164 International Crisis Group, Gold and Grief in Venezuela’s Violent South, February 2019. 165 Atlantic Council, “T ranscript: Countering the Maduro Regime’s Global Web of Illicit Activities,” August 14, 2020. 166 U.S. Department of State, 2020 Trafficking in Persons Report: Venezuela, June 25, 2020. See also Devon Cone and Melanie T eff, Searching for Safety: Confronting Sexual Exploitation and Trafficking of Venezuelan Wom en and Girls, Refugees International, August 2019. Congressional Research Service 35 Venezuela: Background and U.S. Relations The U.S. Department of State ranked Venezuela as Tier 3 for the seventhcommits various human rights violations, including the forcible recruitment of child labor from the indigenous Yanomami tribe.

Colombian Illegally Armed Groups Operating in Venezuela

The U.S. Department of State ranked Venezuela as Tier 3 for the sixth consecutive year in its June 2019 Trafficking in Persons (TIP) report. Although the Maduro government reported that it had conducted a training on how to serve victims of human trafficking, it did not report any data on TIP victims assisted, cases investigated or prosecuted, or any convictions for human trafficking. The State Department therefore determined that Venezuela did not meet the minimum standards for the elimination of human trafficking and was not making any effort to do so2020 Trafficking in Persons (TIP) report. This ranking indicates that the country does not meet minimum standards for preventing human trafficking, nor is it making significant efforts to do so. The Maduro government reported that it had created a special prosecutor’s office for TIP cases and initiated proceedings against three officials complicit in a case that ended with a shipwreck at sea of a vessel reportedly carrying 90 people. The government did not provide any data on TIP victims assisted, prosecutions, or convictions for human trafficking. In September 2019, the Trump Administration waived TIP-related sanctions on assistance to Venezuela that would have been triggered by that Tier 3 ranking, determining that the continuation of U.S. assistance to civil society for democracy and human rights assistance was in the U.S. national interest. The State Department has alsoalso has notified Congress of its intention to provide $3 million mil ion in FY2018 INCLE funds to help strengthen human trafficking efforts in countries affected by the Venezuela regional migration crisis.¹⁵³

Terrorism

bordering Venezuela.167 U.S. Concerns About Terrorism Since 2006, the Secretary of State has determined annuallyannual y that Venezuela has not been "“cooperating fully with United States antiterrorism efforts"” pursuant to Section 40A of the Arms Export Control Act (AECA). Per the AECA, such a designation subjects Venezuela to a U.S. arms embargo, which prohibits all al U.S. commercial arms sales and retransfers to Venezuela. The most recent determination was made in May 2019.¹⁵⁴

2020 and published on June 2, 2020.168 In 2008, the Department of the Treasury imposed sanctions (asset freezing and prohibitions on transactions) on two individuals and two travel agencies in Venezuela for providing financial support to HezbollahHezbol ah, which the Department of State has designated a Foreign Terrorist Organization. The action was taken pursuant to E.O. 13224, aimed at impeding terrorist funding.

The According to the State Department's most recent annual terrorism report, issued on November 1, 2019, stated that "country's porous borders offered a permissive environment to known terrorist groups."¹⁵⁵ The report mentioned FARC dissidents, ELN, and Hezbollah supporters as present in the country. Some Members of Congress have called’s Country Reports on Terrorism 2019, Venezuela has a permissive environment for known terrorist groups, including FARC dissidents, the Colombian-origin ELN, and sympathizers of Lebanese Hezbollah. In particular, the report maintained that financial ties with FARC dissidents and the ELN facilitated the Maduro government’s corruption and graft schemes. The State Department noted reports of sporadic cooperation between FARC dissidents and the ELN in the areas of road and border checkpoints, forced displacement of vulnerable indigenous communities, and trafficking of il egal narcotics and gold.169 According to several DOJ indictments, there are al eged links between the Maduro government and Hezbollah through a few key intermediaries. One of them, Alex Saab, a Colombian subject to U.S. sanctions, is in the process of being extradited from Cape Verde to face U.S. money laundering charges.170 The DOJ also has charged a former Venezuelan legislator, Adel el Zabayar, with involvement in weapons for cocaine negotiations between the FARC and Hezbollah and Hamas.171 Analysts have criticized the indictment for failing to provide conclusive evidence.172 167 U.S. Department of State, CN #218, August 15, 2019. 168 U.S. Department of State. Public Notice 11131, “Determination and Certification of Countries Not Cooperating Fully with United States Antiterrorism Efforts,” Federal Register 2020-11858, June 2, 2020. 169 U.S. Department of State, Country Reports on Terrorism 2019, June 24, 2020. 170 A Cape Verdean court has approved Saab’s extradition to the United States to stand trial for laundering money for Nicolás Maduro. DOJ, “United States v. Alex Nain Saab Moran, Docket No. 19-CR-20450-RNS,” July 25, 2019; “Cape Verde Court Approves US Extradition of Maduro Financier for Money Laundering,” Jurist, August 6, 2020. 171 DOJ, “Former Member Of Venezuelan National Assembly Charged With Narco -T errorism, Drug T rafficking, And Weapons Offenses,” May 27, 2020. 172 “US Indictment Claims Venezuelan Politician Linked to Hezbollah, Hamas,” Insight Crime, May 29, 2020. Congressional Research Service 36 link to page 43 Venezuela: Background and U.S. Relations Some Members of Congress have cal ed for Venezuela to be designated as a state sponsor of terror. This designation would trigger an array of sanctions, including aid restrictions, requirement for validated export licenses for dual-use items, and other financial restrictions. Critics caution there is a lack of evidence to conclude that the Venezuelan government has " “repeatedly provided support for acts of international terrorism,"” as required by law.

Outlook

Outlook Since 2017, analysts have debated how long Maduro can retain his grip on power and how best to helpwhat measures might hasten a return to democracy in Venezuela. With his second term widely regarded as il egitimate as illegitimate within Venezuela and by much of the international community, Maduro has faced tough sanctions and a reenergized opposition under the leadership of Interim President Juan Guaidó. Despite two bold efforts in 2019 by Guaidó and his supporters to encourage the Venezuelan military Venezuelan military to abandon Maduro and sustained international pressure against him, Maduro remains the de facto leader of Venezuela. Given the rapidly deteriorating economic and humanitarian conditions in the country that are affecting the entire region, resolving the political crisis in Venezuela remains a top U.S. foreign policy priority. At the same time, although the prospect of a U.S. military intervention in Venezuela was discussed by top Administration officials in early 2019, it has not been publicly mentioned over the past year or so. In 2020, political attention in Venezuela and among those following the crisis international y has been focused on the December 6, 2020, legislative elections. With the Guaidó-led opposition boycotting and the United States, the EU, and most Western Hemisphere countries refusing to recognize the elections’ validity, the path forward to a democratic transition has become decidedly less clearremains a top U.S. foreign policy priority.

This year, political attention in Venezuela and among those following the crisis internationally is focused on elections. Unclear, however, is whether and under what circumstances the opposition led by Juan Guaidó will agree to compete in elections. Also unclear is whether those elections will be strictly parliamentary, as Maduro likely favors (and are constitutionally required to occur by December 2020), or presidential as well (as Guaidó and his international supporters have proposed). Outside of elections or renewed negotiations, U.S. options to hasten a transition to democracy in Venezuela appear limited. Some observers have urged the Trump Administration to take even more aggressive measures to bring about a political resolution, such as increased secondary sanctions. Others argue that such actions could increase unrest or worsen the humanitarian situation, maintaining that support for a negotiated solution is the best course of action. In the absence of a political transition, the deteriorating humanitarian situation could increase pressure on U.S. alliesal ies throughout Latin America and the Caribbean that are hosting the majority of Venezuelans who have fled.

The 116^th The 116th Congress has closely followed developments in Venezuela, held oversight hearings to review the Trump Administration'’s policy responses, and developed and passed comprehensive legislation legislation that aims to advance a negotiated solution to Venezuela'’s crisis. For example, Congress enacted the VERDAD Act of 2019 (S. 1025),) as part of Division J, Title 1, of the Further Continuing Appropriations Act, 2020 (P.L. 116-94). It remains unclear whether the Senate will wil take up House-passed legislation (H.R. 549) that would give Venezuelans Temporary Protected Status (TPS). In the meantime, Congress is considering the Administration'’s FY2021 budget request for Venezuela Venezuela and for humanitarian support for countries sheltering Venezuelans and overseeing U.S. funding and sanctions related to the Venezuela crisis. For more information on legislative initiatives initiatives on Venezuela in the 116^th116th Congress, seesee Appendix A.

Appendix A. Congressional Research Service 37 Venezuela: Background and U.S. Relations Appendix A. Legislative Initiatives in the 116^th Congress

116th Congress Enacted Legislation

P.L. 116-6 ( (H.J.Res. 31),), Consolidated Appropriations Act, 2019. The measure provided $17.5 million mil ion for democracy and rule of law programs for civil society groups in Venezuela. The conference report (H.Rept. 116-9) required a strategy of how U.S. agencies are supporting communities that are sheltering Venezuelans throughout Latin America and the Caribbean. Introduced January 22, 2019. Signed into law February 15, 2019.

P.L. 116-92 ( (S. 1790) National Defense Authorization Act, 2020. Similar to H.R. 2204 and S. 1151, Section 880 of the measure prohibits federal contracting with persons who do business with the Maduro government. Introduced June 11, 2019. Signed into law December 20, 2019.

P.L. 116-94 ( (H.R. 1865),), Further Consolidated Appropriations Act, 2020. Introduced March 25, 2019, and subsequently became the legislative vehicle for eight FY2020 appropriations bills. bil s. Signed into law on December 20, 2019. The measure provides $30 millionmil ion in FY2020 assistance for democracy programs in Venezuela. It also incorporated provisions described below from the Senate-reported version of the VERDAD Act (S. 1025), including authorizing $400 million in mil ion in FY2020 humanitarian aid to Venezuela and $17.5 millionmil ion in FY2020 funds to help the OAS and civil society organizations prepare for future elections in Venezuela. The act required, among others, a short-term U.S. humanitarian assistance strategy to address the needs of the Venezuelan people; a report within a year on the coordination and distribution of humanitarian assistance, including future efforts; a U.S. strategy to counter Russian influence in Venezuela; a coordinated sanctions strategy on Venezuela with partners in the Western Hemisphere and the European Union; a strategy to support a democratic transition in Venezuela under different scenarios (similar to S. 2583); and a report on accountability for human rights abuses committed by the Maduro government.

Legislative Initiatives Incorporated into Bills Passed Into Law

The following billsbil s were incorporated into other billsbil s passed into law.

H.R. 854 (Mucarsel-Powell), the the Humanitarian Assistance to the Venezuelan People Act of 2019, 2019, would require a strategy within 180 days of its enactment from the Department of State and USAID on the delivery of humanitarian assistance within Venezuela and for Venezuelans throughout Latin America and the Caribbean. Introduced January 29, 2019; amended and reported out of the House Foreign Affairs Committee March 14, 2019; House approved, as amended, March 25, 2019. (Incorporated into P.L. 116-94 above.)

H.R. 920 (Shalala), the the Venezuela Arms Restriction Act, would restrict the transfer of defense articles, defense services, and crime control articles to any element of the security forces of Venezuela Venezuela under the authority of a government of Venezuela that is not recognized as the legitimate government of Venezuela by the government of the United States (i.e., the Maduro government). It would require a report within 180 days of the enactment of the act on the transfer of covered articles or services to the Maduro government since July 2017. Introduced January 30, 2019; reported out of the House Foreign Affairs Committee March 14, 2019; House approved March 25, 2019. (Incorporated into P.L. 116-94 above.)

Congressional Research Service 38 Venezuela: Background and U.S. Relations H.R. 1477 (Wasserman (Wasserman Schultz), the the Russian-Venezuelan Threat Mitigation Act,, would require the Secretary of State to submit an assessment within 120 days of its enactment on Russian-Venezuelan security cooperation and the potential threat such cooperation poses to the United States and countries in the Western Hemisphere. Introduced February 28, 2019; reported out of the House Foreign Affairs Committee March 14, 2019; approved by the House March 25, 2019. (Incorporated into P.L. 116-94 above.)

S. 1025 (Menendez), thethe VERDAD Act of 2019,, would establish as U.S. policy the pursuit of a peaceful, diplomatic solution to the Venezuelan crisis; authorize $400 million mil ion in new humanitarian assistance; prohibit visas for the family members of sanctioned individuals but establish a waiver with conditions to lift visa restrictions; remove sanctions on designated individuals individuals not involved in human rights abuses if they recognize Venezuela'’s interim president; require the State Department to work with Latin American and European governments to implement their own sanctions; require the Departments of State, Treasury, and Justice to lead international efforts to freeze, recover, and repurpose the corrupt financial holdings of Venezuelan officials; and accelerate planning with international financial institutions on the economic reconstruction of Venezuela contingent upon the restoration of democratic governance. Introduced April 22, 2019; reported with an amendment in the nature of a substitute to include three House measures (H.R. 854, H.R. 920, and H.R. 1477) out of the Senate Foreign Relations Committee May 22, 2019. (Incorporated into P.L. 116-94 above.)

H.R. 2204 (Waltz)/S. 1151 (Scott), thethe Venezuelan Contracting Restriction Act, would prohibit an executive agency from entering into a contract for the procurement of goods or services with any person that has business relations with an authority of the Maduro government. Introduced in the House April 10, 2019; referred to the House Committee on Government Reform. Introduced in the Senate April 11, 2019; reported with an amendment in the nature of a substitute by the Senate Homeland Security and Government Affairs Committee September 19, 2019 (S.Rept. 116-85). (Incorporated into P.L. 116-92 above.)

H.R. 2500 (Smith), thethe National Defense Authorization Act, FY2020, would incorporate language similar to that of (H.R. 2204, S. 1151, and S. 1790) that would prohibit federal contracting with persons thatwho do business with the Maduro government. Introduced May 2, 2019; amended by the House Committee on Armed Services (H.Rept. 116-120), House approved July 12, 2019. (For further action, see P.L. 116-92 above.)

H.R. 2740 (DeLauro), Labor, Health and Human Services, Education, Defense, State, Foreign Operations, and Energy and Water DevelopmentDevelopment Appropriations Act, FY2020,, incorporates the language of H.R. 2839 as Division D and references the report (H.Rept. 116-78) to H.R. 2839. It would provide $17.5 millionmil ion for democracy and rule of law programs in Venezuela. Introduced and reported out of the Appropriations Committee May 15, 2019 (H.Rept. 116-62), House approved as amended June 19, 2019. (Incorporated into P.L. 116-94 above.)

H.R. 2839 (Lowey), thethe Department of State, Foreign Operations, and Related Programs AppropriationsAppropriations Act, FY2020, would provide $17.5 millionmil ion in democracy and human rights aid to Venezuela. The report (H.Rept. 116-78) would direct Migration and Refugee Assistance and International Disaster Assistance to addressing the Venezuela migration crisis. Introduced and reported out of the Appropriations Committee May 20, 2019 (H.Rept. 116-78). (For further action, see H.R. 2470 and P.L. 116-94 above.)

S. 2583 (Graham), thethe Department of State, Foreign Operations, and Related Programs Programs Appropriations Act, FY2020,, would require a strategy for U.S. assistance under various scenarios for U.S. assistance in Venezuela. Introduced September 26, 2019; referred to the Committee on Appropriations. (See P.L. 116-94 above.)

Congressional Research Service 39 Venezuela: Background and U.S. Relations Selected Legislative Initiatives

H.R. 1004 (Cicilline),the Prohibiting Unauthorized Military Action in Venezuela Act, would prohibit funds made available to federal departments or agencies from being used to introduce the armed forces of the United States into hostilities with Venezuela, except pursuant to (1) a declaration of war, (2) a specific statutory authorization that meets the requirements of the War Powers Resolution and is enacted after the enactment of this billbil , or (3) a national emergency created by attack upon the United States or the armed forces. Introduced February 6, 2019; referred to the House Foreign Affairs Committee and the House Armed Services Committee; House Foreign Affairs Committee reported, as amended, April 9, 2019.

H.R. 549 (Soto), the Venezuela TPS Act of 2019, would allowal ow certain Venezuelan nationals residing in the United States to qualify for temporary protected status, which prevents their removal from the United States and allowsal ows them to obtain employment and travel authorization. Introduced January 15, 2019; amended and reported (H.Rept. 116-168) out of the House Judiciary Committee May 22, 2019; House approved July 25, 2019.

S. 636 (Menendez), H.R. 6395 (Smith), the National Defense Authorization Act, FY2021, would require a report within 120 days of the act’s enactment on the political, economic, health, and humanitarian crisis in Venezuela and its implications for United States national security and regional security. Introduced March 26, 2020, reported as amended July 9, 2020 (H.Rept. 116-442), House approved July 21, 2020. H.R. 7608 (Lowey), the State, Foreign Operations, Agriculture, Rural Development, Interior, Environment, Military Construction, and Veterans Affairs Appropriations Act, FY2021, would provide at least $30 mil ion in democracy assistance to Venezuela. H.Rept. 116-444 expresses support for the provision of additional assistance in the event that there is a democratic transition. The report also urges the Administrator of USAID to provide International Disaster Assistance and Migration and Refugee Assistance help respond to humanitarian needs resulting from the Venezuelan migration, both inside Venezuela and in the region. H.Rept. 116- 444 directs Voice of America to continue to focus programming in Venezuela and urges the Open Technology Fund to focus on preserving internet freedom in Venezuela. S. 636 (Menendez), the Venezuela Temporary Protected Status Act of 2019, would designate Venezuela under Section 244 of the Immigration and Nationality Act to permit nationals of Venezuela to be eligible for Temporary Protected Status under such section. Introduced February 28, 2019; referred to the Judiciary Committee. S.J.Res. 11 (Merkley), the Prohibiting Unauthorized Military Action in Venezuela Resolution of 2019, would prohibit U.S. department or agency funding from being used to introduce armed forces into hostilities with Venezuela, except pursuant to a specific statutory authorization by Congress enacted after this joint resolution. Introduced February 28, 2019. Congressional Research Service 40 Venezuela: Background and U.S. Relations Appendix B. Online Human Rights Reporting on Venezuela Table B-1. Online Human Rights Reporting on Venezuela Organization Document/Link Amnesty International The State of the World’s Human Rights, https://www.amnesty.org/en/countries/americas/venezuela/report-venezuela/ Committee to Protect Journalists http://www.cpj.org/americas/venezuela/ Foro Penal Venezolano http://foropenal.com/ Human Rights Watch http://www.hrw.org/en/americas/venezuela Inter-American Commission on Human Rights http://www.cidh.oas.org/DefaultE.htm; (IACHR) Annual Report of the IACHR 2018, 2019, chapter IV includes a special report on Venezuela, http://www.oas.org/en/iachr/docs/annual/2018/TOC.asp Programa Venezolano de Educación-Acción en http://www.derechos.org.ve/ Derechos Humanos (PROVEA) Reporters Without Borders https://rsf.org/en/venezuela U.S. State Department Country Report on Human Rights Practices 2018, March 13, 2019, https://www.state.gov/reports/2018-country-reports-on-human-rights-practices/ Venezuelan Politics and Human Rights Blog hosted by the Washington Office on Latin America, http://venezuelablog.tumblr.com Source: Congressional Research Service. Author Information Clare Ribando Seelke, Coordinator Phillip Brown Specialist in Latin American Affairs Specialist in Energy Policy Rebecca M. Nelson Rhoda Margesson Specialist in International Trade and Finance Acting Section Research Manager Acknowledgments Carla Davis-Castro, Research Librarian, contributed charts and background information for this report. Congressional Research Service 41 Venezuela: Background and U.S. Relations Disclaimer This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress. Information in a CRS Report should n ot be relied upon for purposes other than public understanding of information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you wish to copy or otherwise use copyrighted material. Congressional Research Service R44841 · VERSION 25 · UPDATED 42 the Venezuela Temporary Protected Status Act of 2019, would designate Venezuela under Section 244 of the Immigration and Nationality Act to permit nationals of Venezuela to be eligible for Temporary Protected Status under such section. Introduced February 28, 2019; referred to the Judiciary Committee.

Appendix B. Online Human Rights Reporting on Venezuela