The sequence of events triggered by the imperialist aggression against Venezuela led to the Venezuelan National Assembly’s approval, on January 29, of a partial reform of the country’s Chávez-era hydrocarbons law. Immediately afterwards, the US Office of Foreign Assets Control (OFAC), which is responsible for sanctions, published General License 46, partially lifting sanctions on Venezuelan oil, albeit with very strict restrictions.

It is important to understand what this means. We publish here some initial observations, together with a previous comment on Marco Rubio’s appearance before the US Senate Foreign Relations Committee to discuss the aggression against Venezuela.

[Originally published on Marxist.com]

Latest news on US oil sanctions against Venezuela

On Thursday, two important and closely related steps were taken regarding US sanctions on Venezuelan oil. The Venezuelan National Assembly unanimously approved the “Partial Reform” of Chávez’s hydrocarbons law (full text here), and the US issued General License 46 on oil sanctions against Venezuela.

Let me explain.

The United States and the multinational oil companies demanded the reform of the hydrocarbons law. They wanted conditions favorable to them enshrined into law: international arbitration of contracts (as opposed to arbitration in Venezuelan courts), greater autonomy from state supervision, direct access to primary activity (exploration, extraction, production etc.) and reduction of taxes and royalties.

All these points, which contradict Chávez’s laws and decrees of 2001 (which triggered the 2002 coup), 2006, and 2007, were unanimously approved on January 29 in the Venezuelan National Assembly.

In fact, the law that they passed is even more favorable to multinationals than the draft presented a week before. It further reduces royalties and taxes, clarifies “independent” arbitration, and is clearer in repealing Chávez’s laws.

On Wednesday last week, Marco Rubio in the US Senate congratulated the Venezuelan authorities on the hydrocarbons law, although he noted that they may not have gone far enough. On Thursday, the Venezuelan authorities made additional concessions.

Just minutes after the (counter) reform was approved, the US sanctions agency, OFAC, issued General License 46, which allows US oil companies to return to Venezuela under a series of strict conditions (full text here).

What are the terms and conditions? Let’s take a look:

• The authorization is broad in scope and covers all aspects of the oil business.
• Direct payments to Venezuela are not allowed. Instead, they must be made to a bank account currently located in Qatar, controlled by the US government (!!).
• The contract will be governed by US law and any disputes will be resolved in the US.

License 46 specifically prohibits:

• Oil trade with China, Iran, Russia and Cuba;
• Trade at reduced prices (Cuba) or in exchange for debt (China);
• Direct payments to Venezuela in in gold or cryptocurrencies.

General License 46 also stipulates that any sale of Venezuelan oil to countries other than the United States must be reported to the US every 90 days in detail, including:

• The parties involved;
• The quantities, values and countries of final destination;
• The dates on which the transactions took place; and,
• Any taxes, fees or other payments provided to the government of Venezuela.

This has a double meaning:

• Chávez’s laws to defend Venezuelan oil sovereignty and end the “oil opening” to private companies have been severely weakened and, in some cases, repealed completely.
• The United States has (partially) lifted sanctions, but maintains strict oversight of any oil sales, including the buyers, the conditions and the methods of payment. Sales to China, Cuba, Russia, North Korea, and Iran are prohibited.

To add insult to injury, Chávez’s portrait was one of those presiding over the ceremony, and the Venezuelan government called on oil workers to mobilize at the door of the National Assembly to celebrate.

Marco Rubio’s appearance before the US Senate regarding Venezuela

Scandalous. In Marco Rubio’s appearance before the US Senate Foreign Relations Committee on January 28, the secretary of state explained the mechanism by which US imperialism will supervise the money from the sale of Venezuelan crude oil:

And so we’ve been able to create a short-term mechanism. This is not going to be the permanent mechanism, but this is a short-term mechanism in which the needs of the Venezuelan people can be met through a process that we’ve created where they will submit every month a budget of “this is what we need funded.” We will provide for them at the front end what that money cannot be used for. And they’ve been very cooperative in this regard.

In other words, the US now controls the sale of Venezuelan crude oil through multinationals designated by the US. The money is deposited in an account (in Qatar) controlled by the US. The Venezuelan government submits a monthly budget to explain to the US how they are going to spend the money, and then the US gives its approval. In addition, there are a number of expenses that are already vetoed in advance (!!).

That’s not all. In fact, the authorities in Caracas have committed to using that money to buy medicines and equipment from the US:

In fact, they have pledged to use a substantial amount of those funds to purchase medicine and equipment directly from the United States. As in fact, one of the things they need is diluent (…) And that basically is the light crude that you need to mix with their heavy crude in order for the oil to be able to be mixed and moved. They used to get 100 percent of that from Russia. They are now getting 100 percent of that from the United States.

As if that were not enough, Rubio goes on to congratulate the Venezuelan government for the counterreform of Chávez’s hydrocarbons law for the benefit of multinationals:

…the authorities there deserve some credit. They have passed the new hydrocarbon law that basically eradicates many of the Chávez-era restrictions on private investment in the oil industry.

Read carefully what this representative of Yankee imperialism and the Miami-based reactionaries has to say: “eradicates many of the Chávez-era restrictions on private investment”. It couldn’t be clearer.

Appetite comes with eating. Imperialism is not satisfied with all these legal concessions and demands more:

It probably doesn’t go far enough to attract sufficient investment, but it’s a big step from where they were three weeks ago. So that’s a major change.

Obviously, although Rubio said “we reached an agreement with them,” it is clear that this “agreement” took place after unprecedented military aggression and the kidnapping of President Maduro. In his written statement to the committee, submitted the day before, Rubio clearly stated:

Rodríguez is well aware of the fate of Maduro; it is our belief that her own self-interest aligns with advancing our key objectives.

We will closely monitor the performance of the interim authorities as they cooperate with our stage-based plan to restore stability to Venezuela. Make no mistake, as the President has stated, we are prepared to use force to ensure maximum cooperation if other methods fail. It is our hope that this will not prove necessary, but we will never shy away from our duty to the American people and our mission in this Hemisphere.

A full-blown threat, straight out of Tony Soprano’s playbook.

In that same written statement, Rubio specified the conditions to which Delcy had committed:

Delcy Rodríguez has assumed leadership of the interim authorities and has stated her intention to cooperate with the United States. She has committed to opening Venezuela’s energy sector to American companies, providing preferential access to production, and using revenues to purchase American goods. She has pledged to end Venezuela’s oil lifeline to the Cuban regime and to pursue national reconciliation with Venezuelans at home and abroad.

In short, what we have is a mechanism for the semi-colonial subjugation of Venezuela by Yankee imperialism. There is no need to beat around the bush. Anyone who says that this is a tactical victory or that it is a relationship of mutual respect within the framework of Venezuela’s sovereignty is deceiving themselves and others. There is no sovereignty when the aggressor power controls the flow of oil, and the attacked country has to submit a list of expenses for approval by the master in Washington before having access to the money from the sale of its oil.

The historical comparison is not with Brest-Litovsk (as Juan Carlos Monedero and others have suggested), nor with the Molotov-Ribbentrop Pact (as Manu Pineda of the Spanish Communist Party indicated), but rather with the Sèvres Treaty, a capitulation imposed by the victorious Allied powers on the Ottoman Empire after the end of World War I. This placed Turkish finances, including the budget and taxes, under an Allied financial commission.

The treaty was never implemented, due to its rejection by the national movement led by Mustafa Kemal Atatürk, who, in his fight against the capitulators, finally declared the Republic of Turkey and won sovereignty.

Lessons from history…