Biden removes Venezuela-related sanctions on Italian oil firm

The Biden administration has lifted restrictions on Italian oil companies that the former Trump administration blacklisted on its final day in office over ties to Venezuela’s sanction-hit oil sector.

A White House official said earlier in March that he administration of President Joe Biden is in “no rush” to remove US sanctions against Venezuela, signaling the continuation of predecessor Donald Trump’s unsuccessful goal of overthrowing the elected government of President Nicolas Maduro.

According to a report by the Hill on Thursday, the Treasury Department removed the special designation of four entities related to Alessandro Bazzoni, who is described as the head of te trading firms alleged to be part of an illicit network aimed at moving Venezuelan oil to circumvent the illegal sanctions. The entities include Serigraphiclab, AMG S.A.S. Di Alessandro Bazzoni & C.; AMG S.A.S. Di Alessandro Bazzoni E C.; and AMG S.A.S. Di Alessandro Bazzoni And C.

The Treasury Department did not return a request for comment on why the entities were deleted from the sanctions list of the Office of Foreign Assets Control (OFAC), whose designations block any assets of the identified person or entities in the US and American citizens are generally prohibited from dealing with the individuals or entities.

Bazzoni was accused by the department as being a “principal actor” and a “core facilitator” in the scheme, part of a network that bought blacklisted oil from Venezuela’s state oil company, PdVSA, and resold it to third-party customers.

“Bazzoni, an Italian citizen, has been instrumental in coordinating the purchase and sale of Venezuelan-origin crude oil from PdVSA,” the Treasury Department said in a statement at the time.

“This could be part of a bureaucratic process, or part of the new administration’s broader review process of Venezuela policy,” said Domingo Sadurni, assistant director at the Adrienne Arsht Latin America Center with the Atlantic Council. “Or it could be tied to more broader, private conversations between the opposition and the Maduro regime."

“Bazzoni was designated today for operating in the oil sector of the Venezuelan economy and because he has materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, PdVSA.”

The US blacklisted PdVSA in 2019, part of its sanctions regime against Venezuelan President Nicolás Maduro. 

The sanctions increased the roles of many other players in Venezuela's oil sector, inclusing Russia’s Rosneft, India’s Reliance Industries and Italy’s Eni, as well as Iran's oil companies. 

The consequences of the sanctions were also beneficial for Venezuela’s private firms. As PDVSA was seeking to weather the impact of sanctions, it gave more leeway to private sector partners in joint ventures to handle crude exports and to run operations, as it seeks to weather the impact of sanctions.

As a result, in December Venezuelan exports bounced back to 1.1 million barrels-per-day (bpd) – well below pre-sanctions levels but a steady improvement from August, when exports sank to below 800,000 bpd.

“Patriotic oil workers turned the imperial blockade into a challenge and an opportunity,” PDVSA said in a Jan. 16 statement touting the performance of some of its oil upgraders near the Jose terminal, which convert the sludgy crude from the Orinoco belt into exportable grades.

Venezuela descended into political turmoil after opposition figure Juan Guaidó, former president of the National Assembly, unilaterally declared himself “interim president” in January 2019, arguing that Maduro's reelection in 2018 was fraudulent.

With Washington’s greenlight and help from a small number of rogue soldiers, Guaidó later launched a botched putsch against the elected government.

The Trump administration recognized Guaidó as the legitimate leader of Venezuela and publicly pursued a “regime change” policy against Maduro. The Biden administration has reaffirmed US recognition of Guaido as Venezuela’s interim president and has ruled out negotiations with Maduro anytime soon.

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