BACKGROUND PRESS CALL
BY SENIOR ADMINISTRATION OFFICIALS
ON VENEZUELAN POLICY
Via Teleconference
9:30 A.M. EST
SENIOR ADMINISTRATION OFFICIAL: Hi. Good morning, everybody.
Thanks for taking the time. As the moderator indicated, we’ll have
brief remarks by senior administration officials regarding the Treasury
action on Venezuela.
Following those remarks, we’ll do a short Q&A. On today’s call, we have [senior administration officials].
With that, I’ll turn it over to [senior administration official].
SENIOR ADMINISTRATION OFFICIALS: Hey. Thank you so much. Today’s
action is a demonstration of the President’s commitment to securing a
democratic transition in Venezuela.
In August of last year, after we initiated the full block of the
Venezuelan government, we warned countries and entities that were doing
business with the Maduro regime to cease those activities, because under
the block, they would be sanctionable.
At first, it seemed that a lot of entities believed that and had a
brief hiatus. Unfortunately, some entities have, in the past few
months, reinitiated their activities with the Maduro regime and have
began to skirt sanctions and help the Maduro regime skirt sanctions.
Today’s activity and today’s designation and sanction goes towards
the prime culprit of that, which is Rosneft Trading, which
(inaudible)-based subsidiary of Rosneft, of the Russian-controlled oil
company. In that regards, the overwhelming amount of the Maduro
regime’s oil that has been skirting sanctions and has been traded
throughout the world has been done through Rosneft Trading.
We are also sanctioning Didier Casimiro, who is a board member of
Rosneft and who is President of Rosneft trading, who has been the main
European intermediary to help Maduro skirt sanctions in this regards and
therefore sending a message that we will not stand idly by as foreign
extra-continental or other entities help the Maduro regime maintain and
sustain its repression.
Again, Rosneft trading has been the overwhelming provider of
trading in the Maduro regime (inaudible) and has provided the
overwhelming amount of financial resources and hard currency that has
been coming in through the Maduro regime.
Therefore, this action shall have a significant impact on the
Maduro regime. None of these resources have been going to the
Venezuelan people. This is what the Maduro regime has been using to
sustain its military forces, its repressive forces, to oppress the
people of Venezuela.
At the State of the Union, the President was unequivocal in his
support for the people of Venezuela, for a transition to democracy in
Venezuela. And all actors that sustain and (inaudible) the Maduro
regime -- namely, in this occasion, Rosneft Trading -- will face
consequences for doing so.
Again, whether it’s for Rosneft Trading in this regards, now, or
for companies that deal with Rosneft Trading throughout the world, they
are on notice that they are all susceptible to sanctions, that the
United States will take steps to end their activities with the Maduro
regime, and that this is the first of a series of actions that will take
place unless they cease their activities in support of the Maduro
regime.
Again, this has an easy and quick fix: Stop doing business with the
Maduro regime, allow a democratic transition to take place, and then it
will be a free and open playing field for all to be able to deal with
in commercial, normal terms. But right now, what is taking place is
unsustainable.
The President was clear in his message at the State of the Union
that we will continue to take measures. This is another step in our
maximum pressure campaign. As we have stated in the past, we are
probably at 50 or 60 percent of our maximum pressure campaign. This is
another major step forward towards achieving maximum pressure, but we
will continue moving in one direction only: towards maximum pressure
until there is a democratic transition.
The other thing the President stated, which I’ll repeat, and is his
Trump doctrine: for this to be the first fully democratic hemisphere in
human history. The President believes that. He believes that our
foreign policy begins in the Western Hemisphere, it begins with our
neighbors, it begins in our zone of influence. And we’ll continue to
take measures and we’ll continue to recalibrate the U.S. government and
all of our tools and all of our resources to ensure that we fulfill that
goal of a free and fully democratic Western Hemisphere, and definitely
not allow extra-continental actors or others to subvert democracy, to
instill insecurity, and to destabilize our neighbors in the region.
And with that, I’ll pass it over to Treasury for more details on the action.
SENIOR ADMINISTRATION OFFICIAL: Thanks. And thank you all today
for joining us. Today the Treasury Department is taking action against,
as my colleague noted, against the Russian-owned oil brokerage firm
Rosneft Trading S.A. and its president, Didier Casimiro, for brokering
the sale of Venezuelan crude oil globally on behalf of the illegitimate
Maduro regime.
While Venezuela’s state-owned oil company, PDVSA, and the Maduro
regime are sanctioned by the United States, Rosneft Trading S.A.
nevertheless propped up the Venezuelan oil sector and actively attempted
to evade U.S. sanctions, extending a lifeline to the regime.
Specifically, as recently as last month, Rosneft Trading S.A.
facilitated a shipment of 2 million barrels of Venezuelan crude oil to
West Africa. In addition, in the fall of 2019, PDVSA’s planned oil
shipments with Rosneft Trading S.A. involved 55 million barrels of crude
oil liftings.
Last summer, PDVSA supplied a shipment of 1 million barrels of
Venezuelan crude oil, which was lifted on a vessel in Venezuela and
destined for Asia.
And Casimiro, using Rosneft Trading S.A., was critical in
bolstering the Venezuelan oil sector. He arranged meetings with PDVSA
and Maduro regime officials to strengthen the partnership between
Rosneft Trading and PDVSA.
Now, the effects of today’s actions are that all property, and
interests in property, of Rosneft Trading S.A. and Didier Casimiro that
are in the United States or in the possession or control of U.S.
persons, and of any entities that are owned directly or indirectly, 50
percent or more, by them will be blocked and must be reported to OFAC.
OFAC is also issuing a short-term general license today that
authorizes U.S. persons to engage only in certain wind-down prohibited
activities that are necessary to disentangle transactions involved
Rosneft Trading S.A. Those details can be found on Treasury’s website.
The United States is determined to prevent the continued looting of
Venezuela’s oil assets by the corrupt Maduro regime. Those who
collaborate with the regime do so knowing the consequences. Our action
stands as a warning to all who continue to transact with the
illegitimate dictatorship in Caracas.
And with that, I’d like to pass it over to my colleagues at the State Department.
SENIOR ADMINISTRATION OFFICIAL: Thanks. I won’t take much time.
This is a reaction to the growing and increasingly central role of
Rosneft in the affairs of Venezuela, particularly in the course of the
last year, with Rosneft now handling -- Rosneft Trading now handling
very much over half the oil coming out of Venezuela and actively evading
sanctions, engaging in ruses, engaging in deception, engaging in
ship-to-ship oil transfers in a direct effort to change the identity of
the oil and hide it from purchasers.
Those are the kinds of activities that a major international oil
company should never engage in, and they are being sanctioned.
Just one further comment: In the course of last year, as Venezuela
underwent terrible humanitarian problems that it is suffering, what did
Rosneft do? It took a billion eight hundred million dollars in debt
relief out of Venezuela. That is, Rosneft’s debt, which was the debt of
Venezuela to Rosneft -- which was once in the area of $5- or $6 billion
-- is now down and closing in on zero.
Last year, a billion eight hundred million dollars was funneled
out, in addition to the extraordinary profits that we know Rosneft is
taking out day by day and week by week, at a time when Venezuela really
needs those funds for its own population. I’ll leave it at that.
SENIOR ADMINISTRATION OFFICIAL: Let me just make two points on the
Russia component of this, is that we continue to make clear to Russia
our concerns about their support to the former Maduro regime. We
encourage Russia to continue to work -- or that they should work
together with the international community towards a more prosperous and
democratic Venezuelan future.
And then, lastly, I think that the actions today indicate that we
will take steps, including sanctions, as required, to counter malign
activity and aggression.
SENIOR ADMINISTRATION OFFICIAL: Okay. With that, Moderator, we can take a few questions.
Q Hi there. It’s Josh Wingrove from Bloomberg. Thank you for
taking the time. Sorry, to clarify the action: It’s sanctioning
U.S.-held assets of Rosneft, the subsidiary, as well as the chair? And
can you speak to what impact you think this will have on oil markets?
Thank you.
SENIOR ADMINISTRATION OFFICIAL: [Senior administration official], do you want to clarify the sanctions?
SENIOR ADMINISTRATION OFFICIAL: Sure. So -- will do. The
sanction on Rosneft Trading S.A. and its chair, Didier Casimiro, not
only goes after the U.S.-based assets but also stands as a prohibition
worldwide. Anyone engaging in activity with Rosneft Trading S.A. or
with Didier Casimiro runs the risk of being sanctioned themselves. So
the impact is broader than just the U.S. person assets.
As for the impact on energy -- the energy sector -- I’d like to throw it over to our State Department colleagues.
SENIOR ADMINISTRATION OFFICIAL: We’re confident that energy
markets will remain stable. There are -- global oil markets are
adequately supplied, and so we think while this is a serious action,
global markets will remain stable.
Q Thank you. This is Jeff Schogol with Task & Purpose. In
addition to the sanctions, is the U.S. government planning any military
or covert action to overthrow the Maduro regime? If so, when?
SENIOR ADMINISTRATION OFFICIAL: This is [senior administration
official]. So, honestly, we do not discuss internal deliberations. The
President has made clear over and over again that all options are on the
table. We will continue to analyze all options. As I stated
previously, we are somewhere in 50 to 60 percent of our maximum pressure
strategy and campaign towards Venezuela. We hope to never have to get
to 100 percent of maximum pressure because we hope that together, with
countries throughout the world, Venezuela will have a democratic
transition.
But once again, we began a maximum pressure campaign with the full
intention that we are willing to achieve maximum pressure, hoping that
we never have to get to it.
In regards to the last question, the Energy Department obviously
was part of the interagency process in regards to the impact that this
may have and this actually may have on oil markets. And just to
reiterate what our colleagues from the State Department said: They
thought that the action, just based on global supply and other inputs,
would be stable.
Q Hello. Thanks for doing this. This is Shabtai Gold at the
German Press Agency. I just wanted to ask, at the more general level,
are you at all concerned that the repeated use of sanctions could
actually weaken the U.S. position globally? Thank you very much.
SENIOR ADMINISTRATION OFFICIAL: This is --
SENIOR ADMINISTRATION OFFICIAL: Go ahead, [senior administration official].
SENIOR ADMINISTRATION OFFICIAL: I’ll start off. You know, we use
sanctions, as the U.S. government, in a very deliberate fashion, always
cognizant that we want to maintain the strength of the U.S. dollar
globally.
And that is why, in rolling out this action, I will point out that
we also issued a 90-day wind-down general license and messaging to our
allies in countries such as Germany to note that, while we are
determined to stop benefits to the Maduro regime and to prevent all
persons from engaging in activity with Casimiro and Rosneft Trading
S.A., we’re also giving a short period of time, 90 days, to disentangle
arrangements with that entity.
And in that way, we will seek to calibrate the actions while
maintaining the strength of our sanctions actions to stop the -- stop
(inaudible) to the Maduro (inaudible).
Q Hi there. It’s Ali Rogin with PBS NewsHour. Thanks so much
for doing this call. This question is for [senior administration
official]. I wanted to know if you could expand on what you mentioned
as Russian actions to continue their activities and to change the
appearance to conceal the identity of the oil that they’ve been trading
in. Can you expand upon how they’ve been doing that?
SENIOR ADMINISTRATION OFFICIAL: Yeah, so there are a variety of
ways. One is ship-to-ship transfer. That is, a ship docks in
Venezuela, takes on a tanker, full cargo of Venezuelan oil. And then,
thousands of miles away, the oil is transferred to another (inaudible)
ship. And then that ship proceeds, generally speaking, to Asia and
sells the oil as if there had been no origin in Venezuela. In other
cases, ships have changed
their name. In other cases, there’s simply been misrepresentation as to the origin of the oil.
And all of this is done, you know, with a large network of people
whose purpose it is to help the regime evade sanctions. And the action
today is in part aimed putting everyone on notice that that kind of
evasion will not be tolerated.
Q Hi there. This is Dave Lawler from Axios. I have a question
about the maximum pressure campaign or the move toward a maximum
pressure campaign. I’m wondering what the -- obviously, the end goal is
the democratic elections in Venezuela. I’m wondering how the pressure
campaign gets you there. Is it basically the idea that you put pressure
on the inner circle, they abandon Maduro, and he goes? Or do you think
you can change behavior of the regime? I’m just wondering about the
mechanics of how you view this strategy working. Thanks.
SENIOR ADMINISTRATION OFFICIAL: I’ll start real quick. This is
[senior administration official]
. I think we’ve seen increased evidence
that as our pressure has increased from a variety of actors inside and
outside, there has been pressure on the Maduro regime to seek -- to find
a pathway either for his exit from the country, exit from the political
scene, or a presidential election. We’ve seen all sorts of variances.
So we are confident that this increase of pressure will continue to
lead in that direction. The only thing that has prevented that has
been entities like Rosneft Trading and the support of the Cuban regime
that has given him a false sense of confidence.
So we’re hoping as this continues and as the message is clear --
not only to Rosneft Trading, not only to Cuba, but to any other entity
in the world that would seek to help Maduro skirt sanctions or move in
any direction other than towards an exit politically, physically, or a
presidential election -- that there is no option that they too will be
susceptible to pressure from the United States.
Q Hi, this is Rafael Bernal from The Hill. Thank you for having
this. You’ve talked about the Cuban regime and Rosneft as supporters
of Maduro, but Rosneft’s actions would have been impossible without some
level of acquiescence from Moscow, from the Putin government, the
administration. Do you have any plans to increase pressure on Russia?
And what concerns you most about Russian support for Maduro at this
time?
SENIOR ADMINISTRATION OFFICIAL: Look, the Secretary has been
consistently clear: We’ve called out Russian presence -- that their
presence in Venezuela is unwelcome by the Venezuelan people -- and that
with this particular action we are putting them on notice and we will
continue to both engage with them to make clear our concerns about their
continued support for the failed regime, as well as to show them a
pathway forward if they want to engage constructively to bring about a
more democratic Venezuelan future.
Q Hi all. (Inaudible) with McClatchy . Thanks for doing this
call. I’m wondering if the President has spoken with Russian President
Vladimir Putin about this move; if he’s previewed the steps for the
Russian President, or if he plans to speak with him; and how involved he
was in the decision to proceed with this.
SENIOR ADMINISTRATION OFFICIAL: This is [senior administration
official]. The President has spoken in the past to Russian President
Putin about Venezuela, about the importance of a democratic transition
in Venezuela and essentially how it’s unacceptable for any actors to be
destabilizing not only Venezuela, but the rest of the region, through
their actions. This decision was cleared by the President himself.
SENIOR ADMINISTRATION OFFICIAL: I would just add that Secretary
Pompeo met with Russian Foreign Minister Lavrov on Saturday in Munich
and they did discuss this. And Ambassador Sullivan, in Moscow, met with
the Russian Finance Minister Siluanov to discuss this yesterday.
Q Thanks for doing this. This is Franco Ordoñez with NPR. In
the past, Rosneft has not been in breach of U.S. sanctions because it
takes part in debt servicing agreements after lending Caracas money.
Can you -- how is this different? And can you also explain what actual
impact will this have on Rosneft Trading -- like concrete? I mean, what
type of business (inaudible) U.S. entities -- I mean, just beyond this
symbolic measure? I mean, what kind of pain will this actually produce
on Rosneft Trading?
SENIOR ADMINISTRATION OFFICIAL: Well -- this is [senior
administration official]. I think the impact -- to the extent Rosneft
Trading S.A. is engaging in activity outside of the United States, most
banks, whether they are U.S.-based or not, look to the OFAC list to
guide their risk level, risk appetite. So we would expect to see the
financial sector backing away from Rosneft Trading S.A.
In addition, as stated before, the designation of Rosneft Trading
and of Didier Casimiro means that anyone outside the United States
engaging in any action, any activity with them, whether it involves
Venezuelan crude or non-Venezuelan activity, runs the risk of being
sanctioned themselves.
And so we’ve seen that the impact of such designations, of such
sanctions actions, go far beyond just the U.S.-based business of these
entities.
Q Hi. Thank you for doing this. This is a question for [senior
administration official]. This is (inaudible) from (inaudible),
Spanish newspaper. Does this mean that, in the future, you may actually
go ahead and sanction other companies that may be trading in Venezuela,
like (inaudible)? You’ve said many times they should be aware that
this is a possibility. So I wanted to know if maybe the next step would
be European companies, especially with (inaudible). Thank you.
SENIOR ADMINISTRATION OFFICIAL: Let me be absolutely clear: Any
entity throughout the world that conducts business with the Maduro
regime, pursuant to our August executive order, is subject to sanctions
by the United States. And as this action has shown towards probably the
gravest violator of that sanction, Rosneft Trading, that we will pursue
anyone else who does so.
So, therefore, it’s very simple. It’s very simple: Do not engage
in such transactions with the Maduro regime. Once there’s a democratic
transition, it'll be a whole new world in Venezuela where the Venezuelan
people will get to choose its partners in an open democracy with
transparency and normal commercial relationships.
But at this time, while Maduro continues to assert democracy in
Venezuela, if you conduct business with them, you will be subject to
United States sanctions.
SENIOR ADMINISTRATION OFFICIAL: Obviously, we are taking a further
step here. And as my colleague said, this is a campaign and there will
be additional steps (inaudible).
So we will be having conversations with third parties, with companies
that do business in Venezuela. And many of such companies have always
said to us that they will seek to avoid U.S. sanctions. So we'll be
discussing what these sanctions mean and urging them to conclude their
activities in Venezuela before they actually run into U.S. sanctions
directly.
SENIOR ADMINISTRATION OFFICIAL: And just one thing -- we've got
time for one more question and then the speakers have to adjourn.
Q Hi, my name is Kathleen Stubbs. I'm a reporter from the Asahi
Shimbun. Thank you for doing the call. I wanted to know: How will the
U.S. make sure it's not getting itself too deep by putting this kind of
sanction based on other countries that might be involved in Rosneft,
such as Russia?
SENIOR ADMINISTRATION OFFICIAL: Let me just -- let me be clear
about something in regards to Rosneft Trading here. So it's not only
the United States, but the region, the entire Western Hemisphere -- at
least the democracies of the Western Hemisphere, whether through the
Lima Group, which is the conglomerate of countries -- the large
conglomerate of countries in the Western Hemisphere in favor of
democracy in Venezuela -- our allies in the region have expressed
concern, statement after statement, about Rosneft's activities in
Venezuela, about Russia's general activities in Venezuela.
So, frankly, this isn’t even good -- the reputational risk that
Rosneft and Russia has taken by doubling down on the Maduro regime is
having a huge consequence for them throughout the hemisphere when they
are seen as culprits, as accessories to the repression to the death
squads, to the actions that are taken by the Maduro regime. We would
urge a reconsideration of those actions.
I'm sure the rest of the Western Hemisphere and our allies
throughout the region, the Lima Group and others, would also see a very
favorable (inaudible) for Russia, Rosneft, and others to change their
behavior, and rather than support the Maduro regime (inaudible), helping
it skirt sanctions, that push all for a democratic transition there.
SENIOR ADMINISTRATION OFFICIAL: Okay. With that, we will go ahead
and conclude today's call. I'd like to remind everyone this call is
embargoed until 10:30 a.m. and that all speakers named are -- it's for
attribution to a “senior administration official” for reporting
purposes. That is it from us. Thank you everyone for joining today.
END 9:59 A.M. EST
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