His country asphyxiated under the weight of US economic sanctions, Venezuelan President Nicolas Maduro wants to open the oil sector to his allies, such as China, thanks to a controversial law that facilitates investments under anonymity.
This so-called “anti-blocking” law was approved on October 8 by the Chavist Constituent Assembly which acts as legislative power.
In particular, it authorizes the government to “not apply” legal rules “whose application is impossible or counterproductive” because of the effects of international sanctions. All the acts resulting from its execution are, moreover, “secret”, without any duty of accountability.
Nicolas Maduro himself has recognized that the “anti-blocking law allows everything”, in particular to encourage foreign investment in an oil sector in full decline, to “counter” the battery of sanctions of the United States, including the oil embargo in in force since April 2019.
Thanks to this law and the extraordinary powers that it confers on him, Nicolas Maduro can now approve “privatizations” or the opening of capital, while preserving “the anonymity of the people or companies” who negotiate with the government, and that in defiance of US restrictions, oil expert and university professor Luis Oliveros told AFP.
For specialists, this law is the preamble to an uncontrolled privatization process and, therefore, fertile ground for corruption.
Ali Daniels, lawyer and director of the NGO Access to Justice, points out that the “secrecy” allowed by the anti-blocking law violates the 1976 law on the nationalization of the oil industry and the Constitution itself. By “hiding” the negotiations by anonymity, “it will be a perfect law for acts of corruption,” he adds.
Contracts for the petroleum sector must normally be approved by the National Assembly, the only institution controlled by the opposition and headed by its leader Juan Guaido.
The deputies thus warned that any person who concludes agreements within the framework of this law could be legally prosecuted for “association of criminals”.
But the decisions of the National Assembly, which must be renewed on the occasion of legislative elections on December 6, are systematically annulled by the Supreme Court. Juan Guaido and the main opposition parties have already announced a boycott of these elections, denouncing a fraudulent organization.
China, Russia, Iran
Venezuela’s crude oil production, which was 3.2 million barrels per day 12 years ago, has fallen to less than 400,000 barrels per day in recent months, returning to 1930s levels.
Nicolas Maduro blames Washington and its battery of sanctions for this collapse, denouncing “a criminal blockade”. Several experts as well as the opposition point the finger at the lack of investment and corruption.
With the largest oil reserves in the world, the country recently had to resort to tankers from Iran to alleviate an acute fuel shortage.
Among potential investors, Oliveros sees China and Russia, Venezuela’s main creditors, as well as other regime allies like Iran.
In a televised address, Nicolas Maduro recently said he was “open” to “increased investment” at “all levels of the Venezuelan energy industry” from China.
According to Oliveros, the Venezuelan leader “learned” from his allies to “move money without the OFAC (Office of Foreign Assets Control of the US Treasury) realizing”.
However, he considers it “difficult” for it to be possible to hide from OFAC transactions of several million dollars typical of the oil industry.