U.S. Freezes Assets of Venezuelan President Nicolás Maduro

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Treasury Secretary Steven Mnuchin, left, national security adviser H.R. McMaster, right, speak at the beginning of the daily briefing at the White House in Washington, Monday, July 31, 2017, on the situation in Venezuela. (AP Photo/Susan Walsh)

The U.S. Treasury Department announced Monday it has frozen the assets of and sanctioned Venezuela President Nicolas Maduro for undermining democracy in going ahead with elections on Sunday for a new legislative assembly. “Yesterday’s illegitimate elections confirm that Maduro is a dictator who disregards the will of the Venezuelan people,” said Treasury Secretary Steven Mnuchin in a statement. Under the sanctions, U.S. banks are prohibited from dealing with Maduro.

http://www.marketwatch.com/story/us-freezes-assets-of-venezuelan-president-maduro-2017-07-31

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U.S. Freezes Assets of Venezuelan President Nicolás Maduro

The Treasury Department cites human rights violations

Venezuelan President Nicolas Maduro celebrating election results Monday in Caracas, Venezuela.
Venezuelan President Nicolas Maduro celebrating election results Monday in Caracas, Venezuela. PHOTO: NATHALIE SAYAGO/EUROPEAN PRESSPHOTO AGENCY
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Updated July 31, 2017 5:57 p.m. ET

The U.S. imposed sanctions against Venezuelan President Nicolás Maduro on Monday, saying his government abused human rights and organized an illegitimate vote designed to advance an authoritarian regime, as the leader threatened his domestic opponents with imprisonment.

The U.S. Treasury Department’s move freezes any assets Mr. Maduro has within American jurisdiction, putting him in a small club of leaders it targets including North Korea’s Kim Jong Un, Zimbabwe’s Robert Mugabe and Syria’s Bashar al-Assad.

It was unclear if Mr. Maduro had any U.S.-linked assets but the designation bans his access to the U.S. financial and commercial markets and prohibits any American entity from conducting business with him.

Caracas said 8.1 million people voted on Sunday to choose delegates to form an assemblyto write a new national charter. The results drew scorn from many Venezuelans and condemnation from governments in Europe and the Americas who say the assembly will give the government unchecked authority.

The results were a foregone conclusion, since voters had been asked to choose 545 delegates from 6,000 candidates handpicked by the ruling party. Critics of the vote said it also was plagued by a lack of independent observers and safeguards to prevent people from casting multiple ballots.

“Yesterday’s illegitimate elections confirm that Maduro is a dictator who disregards the will of the Venezuelan people,” U.S. Treasury Secretary Steven Mnuchin said, adding that Caracas used violence, repression and corruption to cow his opponents. The Treasury warned that any officials connected with the constituent assembly created in Sunday’s vote also risk U.S. sanctions.

The Treasury didn’t impose oil-related sanctions even though senior U.S. officials had warned they were considering a ban of the petroleum trade with Venezuela if Mr. Maduro moved ahead with the constituent assembly.

National Security Adviser Lt. Gen. H. R. McMaster signaled at a White House press conference that the U.S. administration showed restraint out of concern some U.S. penalties could hurt ordinary Venezuelans. Mr. Trump is “only considering those options that would benefit directly the Venezuelan people,” Mr. McMaster said.

Last week, the U.S. leveled sanctions on 13 high-ranking Venezuelan officials for alleged corruption, human-rights violations and undermining the country’s democracy, warning that any individuals who became members of the constituent assembly risked being added to the U.S. sanctions list.

Analysts and people familiar with the matter say the latest sanctions are part of a broader set of escalating actions that politically isolate the Maduro government and complicate any of its efforts to raise fresh funds or sign new deals through state-owned entities.

“It shows the seriousness of the administration’s concerns and sends a message that the constituent assembly is not going to be accepted,” said Mark Schneider, a senior adviser at the Center for Strategic and International Studies and former top State Department official.

Mr. Maduro, a 54year-old former bus driver and union leader, was handpicked by his mentor, the late strongman Hugo Chávez. A former lawmaker who helped rewrite the constitution in 1999 under Mr. Chávez, Mr. Maduro served several years as Venezuela’s foreign minister and vice president.

Since taking office in 2013, Mr. Maduro has presided over a nation in disarray. The country´s economic meltdown intensified due to years of mismanagement and a sharp drop in oil prices, the country’s sole source of hard currency. Soaring inflation and severe shortages of food and medicine have led to widespread turmoil and an exodus of Venezuelans from the country. On Monday, he threatened to imprison his adversaries with imprisonment.

“Some will end up in a jail cell,” Mr. Maduro said. “We are going to write a new history.”

Mr. Maduro also said he would look to force the opposition to sit down for negotiations through a so-called truth commission that he previously said would be created by the new constituent assembly. Though he made his comments in a threatening manner, Stalin González, an opposition member of congress, said that the two sides needed to embark on real negotiations.

“An accord has to be the way out,” he said. “Today we have to bet on an accord being a possibility.”

Rhetoric on both sides portended heightened instability in a nation racked by protests. Ten more people died in confrontations between protesters and security forces on Sunday.

Still, the government deemed the vote a resounding success that would allow it to calm unrest and improve the economy. Mr. Maduro has done little, though, to clarify how the government would make corrections, since economists say state controls of the economy, including stringent price controls, are to blame.

“Now is the time to keep fighting in Venezuela for peace, for free elections,” Julio Borges, head of the opposition-led National Assembly, said in a television interview on Monday. “Maduro is behaving like an emperor.”

While many in the opposition despaired at what they said was an increasingly autocratic tint to the Maduro administration, others worried that a government saddled with a collapsing economy and low popularity risks collapse.

Francisco Rodríguez, who has strong links with government and opposition officials here and is the chief economist at New York-based brokerage Torino, said that as support for the administration declines, it may not be able to maintain its hold power “even with the institutions of an authoritarian state.”

“In other words,” he said in a note to client, “even non-democratic governments require some level of political support for their grasp on power to be stable, and it is unclear whether the government’s current numbers are still above that threshold.”

Write to Ian Talley at ian.talley@wsj.com, Juan Forero at Juan.Forero@wsj.com and Anatoly Kurmanaev at Anatoly.kurmanaev@wsj.com

Appeared in the August 1, 2017, print edition as ‘U.S. Hits Maduro With New Curbs.’

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