Posts Tagged ‘U.S. sanctions’

EU rejects Donald Trump’s attempt to dump Iran nuclear deal

October 14, 2017

The EU’s top diplomat says the US can’t terminate the Iran nuclear agreement because it’s not a “bilateral deal.” European leaders acknowledge Iran poses many problems, but insist they should be handled separately.

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European diplomats on both sides of the Atlantic, along with the Iran nuclear deal’s other signatories and many of the US president’s own advisers, have failed to convince Donald Trump not to pick apart the agreement.

In Brussels, European Union officials are clearly exasperated with the US leader’s insistence on mixing a myriad of complaints about Iranian behavior with the Joint Comprehensive Plan of Action (JCPOA), the six-party accord signed in 2015 which limits Tehran’s ability to enrich uranium to a weapons-grade level.

EU Foreign Policy Chief Federica Mogherini did not mince words Friday when lambasting Trump’s decision not to certify Iran’s compliance, which she says has been full, and to ask the US Congress to examine ways to add sanctions on Tehran. Mogherini was officially the deal’s mediator when it was concluded in 2015.

“This deal is not a bilateral agreement, this is not an international treaty,” but part of a UN Security Council Resolution, she said tersely after the announcement, “so it is clearly not in the hands of any president of any country in the world to terminate an agreement of this sort.”

“The president of the United States has many powers, but not this one,” she added.

Iran's President Hassan Rouhani Iran’s President Hassan Rouhani

Iranian President Hassan Rouhani later echoed Mogherini in a live televised address. “No president can revoke an international deal. … Iran will continue to honor its commitments under the deal,” Rouhani said. He also warned that “if one day our interests are not served, we will not hesitate even one moment and will respond.”

Germany, France and UK statement

Chancellor Angela Merkel, President Emmanuel Macron and Prime Minister Theresa May said in a joint statement: “We encourage the US Administration and Congress to consider the implications to the security of the US and its allies before taking any steps that might undermine the JCPOA, such as re-imposing sanctions on Iran lifted under the agreement.”

“We stand ready to take further appropriate measures to address these issues in close cooperation with the US and all relevant partners,” they said. ”We look to Iran to engage in constructive dialogue to stop de-stabilising actions and work towards negotiated solutions.”

No deal-breaker

Mogherini and other European officials insist they will continue to observe the agreement, reminding Iran it must do the same.

A high-level EU official speaking on background ahead of the announcement said the bloc agrees with Trump about the dangers of ballistic missiles, terrorism, Iranian-backed militias and what they see as other bad behavior, and believes they should be dealt with, but separately from the nuclear deal.

Iran's Foreign minister Mohammad Javad Zarif (R) and European Union High Representative for Foreign Affairs, Federica Mogherini give a joint press conference (Getty Images/AFP/A. Kenare)Mogherini (left) says Iran is fulfilling its obligations under the nuclear deal she helped broker

At least with the current nuclear agreement, Tehran wouldn’t have the warheads for those missiles, the official pointed out.

Now lobbying attention turns to Congress, where European outreach efforts continue, according to the EU official.

“All the other issues of concern that may come up will not be better served if we undo the agreement,” the official explained, “because the agreement takes away a very dangerous risk, not only the risk of a nuclear arms race in the region, but also of uncontrolled nuclear proliferation, which is something we are now unfortunately seeing in North Korea.”

Lack of accord between US and EU 

European Council on Foreign Relations analyst Ellie Geranmayeh says this move “has really been seen in Europe as a terrible betrayal of European allies.” While Europeans are also very concerned about missile proliferation and regional meddling, they want to keep open the channel of diplomatic initiatives. “If this deal starts to unravel,” she told DW, “it’s more likely than not to provoke activities from Iran inside the region that add to the fragility of that region.”

Erik Brattberg, who heads the Carnegie Endowment’s Europe program, says that although the EU’s reaction is obviously one of disappointment, the situation doesn’t need to be seen as “catastrophic.”

“While uncertainty about US intentions and its commitment to the JCPOA seem unavoidable in the short term,” Brattberg said, “it is at least preferable to a [complete] unilateral US withdrawal from the agreement from a European perspective.”

Sanctions aimed at Tehran may also sting EU

But things will get worse for European companies that have resumed doing business with Iran if Trump’s impulses are fulfilled. “I think there is a very good chance that US sanctions will be reapplied against Tehran,” predicts Nile Gardiner, Director of the Margaret Thatcher Center for Freedom at The Heritage Foundation, a conservative think tank in Washington. Republicans will strongly support renewing the sanctions, he said, and some Democrats may join them.

“European companies should be nervous,” Gardiner told DW. “They are playing with fire by investing in Iran, and could be hit hard by US sanctions. If they wish to do business with the US they would have to comply with American sanctions if they are imposed.”

Geranmayeh warns Gardiner may be right. “My message to the Europeans is, now that Trump has decertified, you better start planning on that contingency much more vigorously than before,” she said, “whether it’s because of a review process by Congress or because, come January, the president decides that he’s not going to renew these waivers.”

 just decertified  -here is what Europe should do:start planning contingency to salvage http://www.ecfr.eu/article/commentary_what_if_trump_decertifies_the_iran_deal 

Photo published for What if Trump decertifies the Iran deal?

What if Trump decertifies the Iran deal?

European countries must coordinate a vigorous response to prevent Trump from derailing the nuclear accord.

ecfr.eu

With EU foreign ministers meeting Monday to discuss their strategy, she says even if the EU is united behind a position of continuing the agreement, they’d better start coordinating on how far they are willing to go to salvage the deal and how to safeguard their companies from the White House if all else fails.

Shada Islam, director of policy at Friends of Europe, could only shake her head about the developments. “This was a hard-fought deal,” she told DW, adding that its abolishment would be dangerous for the world. “This will empower all those in Iran who don’t want the nuclear agreement – is that what we want?”

Includes videos:

http://www.dw.com/en/eu-rejects-donald-trumps-attempt-to-dump-iran-nuclear-deal-saying-it-works/a-40948190

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Trump strikes blow at Iran nuclear deal in major U.S. policy shift

October 14, 2017

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WASHINGTON (Reuters) – U.S. President Donald Trump struck a blow against the 2015 Iran nuclear agreement on Friday in defiance of other world powers, choosing not to certify that Tehran is complying with the deal and warning he might ultimately terminate it.

Trump announced the major shift in U.S. policy in a speech in which he detailed a more aggressive approach to Iran over its nuclear and ballistic missile programs and its support for extremist groups in the Middle East.

He accused Iran of “not living up to the spirit” of the nuclear agreement and said his goal is to ensure Tehran never obtains a nuclear weapon, in effect throwing the fate of the deal to Congress.

He singled out Iran’s Islamic Revolutionary Guard Corps for sanctions and delivered a blistering critique of Tehran, which he accused of destabilizing actions in Syria, Yemen and Iraq.

“We will not continue down a path whose predictable conclusion is more violence, more terror and the very real threat of Iran’s nuclear breakout,” Trump said.

Trump’s hardline remarks drew praise from Israel, Iran’s arch-foe, but was criticized by European allies.

The move by Trump was part of his “America First” approach to international agreements which has led him to withdraw the United States from the Paris climate accord and the Trans-Pacific Partnership trade talks and renegotiate the North American Free Trade Agreement with Canada and Mexico.

His Iran strategy angered Tehran and put Washington at odds with other signatories of the accord – Britain, France, Germany, Russia, China and the European Union – some of which have benefited economically from renewed trade with Iran.

Responding to Trump, Iranian President Hassan Rouhani said on Friday on television that Tehran was committed to the deal and accused Trump of making baseless accusations.

“The Iranian nation has not and will never bow to any foreign pressure,” he said. “Iran and the deal are stronger than ever.”

European allies have warned of a split with the United States over the nuclear agreement and say that putting it in limbo as Trump has done undermines U.S. credibility abroad, especially as international inspectors say Iran is in compliance with the accord.

The chief of the U.N. atomic watchdog reiterated that Iran was under the world’s “most robust nuclear verification regime.”

“The nuclear-related commitments undertaken by Iran under the JCPOA are being implemented,” Yukiya Amano, director general of the International Atomic Energy Agency said, referring to the deal by its formal name.

U.S. Democrats expressed skepticism at Trump’s decision. Senator Ben Cardin said: “At a moment when the United States and its allies face a nuclear crisis with North Korea, the president has manufactured a new crisis that will isolate us from our allies and partners.”

U.S. President Donald Trump speaks about the Iran nuclear deal in the Diplomatic Room of the White House in Washington, U.S., October 13, 2017. REUTERS/Kevin Lamarque

CONGRESS DECIDES

While Trump did not pull the United States out of the agreement, he gave the U.S. Congress 60 days to decide whether to reimpose economic sanctions on Tehran that were lifted under the pact.

If Congress reimposes the sanctions, the United States would in effect be in violation of the terms of the nuclear deal and it would likely fall apart. If lawmakers do nothing, the deal remains in place.

Senate Foreign Relations Committee Chairman Bob Corker was working on amending the Iran Nuclear Agreement Review Act law to include “trigger points” that if crossed by Iran would automatically reimpose U.S. sanctions.

Slideshow (10 Images)

The trigger points would address strengthening nuclear inspections, Iran’s ballistic missile program and eliminate the deal’s “sunset clauses” under which some of the restrictions on Iran’s nuclear program expire over time.

Trump directed U.S. intelligence agencies to probe whether Iran might be working with North Korea on its weapons programs.

The president, who took office in January, had reluctantly certified the agreement twice before but has repeatedly blasted it as “the worst deal ever.” It was negotiated under his predecessor, former President Barack Obama.

Trump warned that if “we are not able to reach a solution working with Congress and our allies, then the agreement will be terminated.”

“We’ll see what happens over the next short period of time and I can do that instantaneously,” he told reporters when asked why he did not choose to scrap the deal now.

The Trump administration designated the entire Islamic Revolutionary Guard Corps under an executive order targeting terrorists. The administration stopped short of labeling the group a Foreign Terrorist Organization, a list maintained by the State Department.

The Revolutionary Guard is the single most dominant player in Iran’s security, political, and economic systems and wields enormous influence in Iran’s domestic and foreign policies.

It had already previously been sanctioned by the United States under other authorities, and the immediate impact of Friday’s measure is likely to be symbolic.

The U.S. military said on Friday it was identifying new areas where it could work with allies to put pressure on Iran in support of Trump’s new strategy and was reviewing the positioning of U.S. forces.

But U.S. Defense Secretary Jim Mattis said no changes in force posture had been made yet, and Iran had not responded to Trump’s announcement with any provocative acts so far.

Reporting by Steve Holland in Washington; Additional reporting by James Oliphant, Phil Stewart, Makini Brice, Patricia Zengerle, Jonathan Landay, Justin Mitchell, Tim Ahmann and Arshad Mohammed in Washington, John Irish in Paris, Parisa Hafezi in Ankara, Dan Williams in Jerusalem and Shadia Nasrallah in Vienna; Editing by Yara Bayoumy, Alistair Bell and James Dalgleish

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President Trump Refuses to Certify Iran Nuclear Deal; Asks Congress For Action — Revolutionary Guard named as a terror ​organization

October 14, 2017

President says he won’t certify that ‘rogue regime’ in Tehran is complying with nuclear agreement

Iranians walk past medium-range ballistic missiles displayed next to a portrait of Iranian Supreme Leader Ayatollah Ali Khamenei in September.
Iranians walk past medium-range ballistic missiles displayed next to a portrait of Iranian Supreme Leader Ayatollah Ali Khamenei in September. PHOTO: ATTA KENARE/AFP/GETTY IMAGES

WASHINGTON—President Donald Trump took aim Friday at the 2015 Iran nuclear agreement, vowing to end U.S. participation in the landmark deal unless Congress and U.S. allies are able to deliver on punitive measures targeting Tehran’s missile program, its support for regional militant groups, and any future nuclear activities.

As a first step, Mr. Trump refused to certify to Congress under a U.S. law that Iran was complying with its obligations under the nuclear agreement, charging that the country had violated the terms of the deal. Going further, Mr. Trump said if efforts to address his concerns fall short, he would terminate the accord.

“It is under continuous review, and our participation can be canceled by me, as president, at any time,” he said.

As U.S. president, Mr. Trump has wide, long-term latitude over the fate of the agreement, but lacks the ability under the accord’s complicated terms to immediately abolish it.

Mr. Trump, reiterating his fierce opposition to the terms of the deal, announced his decision after issuing a lengthy denunciation of what he called a “rogue regime” run by radicals.

“Iran is under the control of a fanatical regime,” Mr. Trump said in a speech at the White House, adding it has “spread death, destruction and chaos all around the globe.”

Trump Denounces Iran as a ‘Rogue Regime’
President Donald Trump announced plans on Friday to decertify the Iran Nuclear Deal, reinforcing his commitment to cancel the agreement if congress doesn’t act on whether to reimpose sanctions on Iran. Photo: Getty Images

Detailing grievances against Iran going back to 1979, the year of the country’s Islamic revolution, Mr. Trump broadly condemned the country’s rulers.

“Iranian aggression continues to this day,” he said. “The regime remains the world’s leading state sponsor of terrorism.”

In his threat, the president applied a well-practiced tactic of pressing for changes in pre-existing arrangements and abandoning them if he doesn’t succeed. He has taken a similar approach to the Paris climate accord and the North American Free Trade Agreement, as well as to domestic programs such as the Deferred Action for Childhood Arrivals, or DACA, program.

Mr. Trump’s move on Friday touches off high-pressure negotiations in Washington and European capitals over the future of the accord, and his action drew intensive world-wide attention. Iran’s president Hassan Rouhani denounced Mr. Trump’s comments in a televised speech, saying: “The Iranian people will not bend down before a dictator.”

Israeli Prime Minister Benjamin Netanyahu called Mr. Trump’s move to deny Iran’s compliance with the deal courageous, saying the U.S. leader had “boldly confronted Iran’s terrorist regime.” ​

Saudi Arabia, a leading Sunni Muslim power and Shiite-majority Iran’s main rival in the Middle East, also threw its support behind Mr. Trump’s stance.

European officials pushed back, however, on his threat to scuttle the deal if his terms can’t be satisfied.

“It is not a bilateral agreement. It does not belong to any single country and it is not up to any single country to terminate,” the European Union’s Foreign Policy Chief Federica Mogherini told reporters. German Chancellor Angela Merkel, French President Emmanuel Macron, and British Prime Minister Theresa May, whose countries are parties to the accord, said in a joint statement they remained committed to the agreement “and its full implementation by all sides.”

China, another party to the deal, has also signaled its desire to keep it intact, with foreign ministry spokeswoman Hua Chunying saying Tuesday it was in the interest of all sides to continue its implementation.

A law passed in 2015 to give Congress oversight of the nuclear deal requires the president to tell Congress every 90 days whether Iran is complying. If the president doesn’t do so, it triggers a 60-day process for lawmakers to weigh whether to reimpose sanctions under expedited consideration.

However, Mr. Trump didn’t call on Congress to reimpose sanctions immediately, and instead said he supported efforts of Republicans in Congress to craft legislation that would amend the 2015 U.S. oversight bill to reimpose sanctions on Iran if it violates enhanced and existing restrictions on its nuclear program.

Sen. Bob Corker (R., Tenn.), the chairman of the Senate Foreign Relations Committee, has been working with Secretary of State Rex Tillerson on amending the oversight law, the Iran Nuclear Agreement Review Act, known in Washington as INARA. Sens. Tom Cotton (R., Ark.) and Marco Rubio (R., Fla.) have also been involved in crafting the amended legislation.

Mr. Corker, despite a public feud with Mr. Trump that has spilled into Twitter posts, said on Friday that he expects to introduce the legislation in the next week or two.

What Is the 2015 Iran Nuclear Deal?
Iran reached a historic agreement with major world powers over its nuclear program in 2015. Under the deal, what did Iran give up and how is it benefiting? WSJ’s Niki Blasina explains.

Mr. Trump highlighted concerns with “sunset clauses” in the nuclear deal that allow nuclear restrictions to expire. Mr. Tillerson, briefing reporters, said the U.S. envisions a “successor deal” to address those concerns.

A current draft of the bill also would change the frequency of presidential certification required from every quarter to twice a year.

The legislative process is likely to require time and painstaking negotiations. Mr. Tillerson said he hoped Congress would amend the legislation before Mr. Trump next faces another certification deadline in January, but admitted the process won’t be a “slam dunk.”

Mr. Rubio said he backed Mr. Trump’s move to withhold support for the deal and said he thought the U.S. should leave the accord and reimpose sanctions. “I have serious doubts about whether it is even possible to fix such a dangerously flawed agreement,” he said.

However, Sen. Ben Cardin (D., Md.), the top Democrat on the Senate Foreign Relations Committee, said he disagreed with Mr. Trump’s “reckless political decision and his subsequent threat to Congress.” Mr. Cardin voted against the deal in 2015 but said Friday he backed staying in it and rigorously enforcing it.

Mr. Corker’s measure would contain what Mr. Tillerson called “trigger points” that would reimpose sanctions, for example, if Iran violates restrictions spelled out in the legislation. The legislation would set stricter limits than those contained in the nuclear accord. Mr. Corker’s office said the bill would be “effectively ridding the JCPOA of its sunset provisions as they apply to U.S. sanctions.” It will also bolster the verification powers of the U.N.’s nuclear watchdog and limiting Iran’s centrifuge program.

As it works to toughen the U.S. law, the administration also will seek talks with European partners to address key concerns, Mr. Tillerson said.

Asked if the EU would be interested in negotiating a “successor” agreement, Ms. Mogherini, the EU foreign policy chief, said “the agreement is working, has been implemented, continues to be implemented…I would expect all sides to stick to it.”

European officials and former U.S. officials involved in negotiating the deal are concerned that by reimposing sanctions for reasons not covered by the original nuclear deal, the U.S. stands to be in breach of the international agreement, setting in motion a sequence of events that could lead to the deal’s collapse.

Mr. Trump has the power to unilaterally end U.S. participation in the deal by halting the U.S. sanctions relief that Iran was promised under the accord. Doing so, however, wouldn’t necessarily abolish the agreement, as other countries and Iran could choose to continue to follow it.

Reinstating U.S. sanctions also could lead Iran to halt its commitments under the deal if Tehran doesn’t receive the economic relief it expected. Iran’s withdrawal and return to now-banned nuclear activities would effectively nullify the agreement.

Mr. Trump has other options under the complex deal. He could say that Iran has committed a material breach of the terms and initiate a dispute resolution process ​that could lead to a vote in the U.N. Security Council. In such a vote, the U.S.’s veto could result in the resumption of broad, punitive international sanctions. However, the appearances of a U.S. move to force a vote that way would be challenging, former officials involved in the negotiations said.

Among other steps outlined by Mr. Trump, the U.S. will target the Islamic Revolutionary Guard Corps, Iran’s elite military branch, which Mr. Trump said has hijacked large portions of Iran’s economy.

The IRGC won’t be classified formally as a foreign terrorist organization under U.S. laws that would expose it to more punitive action, officials said. Instead, the Treasury Department announced on Friday that it is designating the group under as a terror ​organization under an executive order that was created after Sept. 11, 2001 to target terrorist financing.

Behnam Ben Taleblu, a senior Iran analyst at the Washington-based Foundation for the Defense of Democracies, said that even though large parts of the IRGC has already been sanctioned under past executive orders, the latest designation could inflict economic damage.

“This is a major course correction” by Washington, Mr. Ben Taleblu said. Besides expanding the sanctions to the entire IRGC, the administration is also issuing the order under a terrorism designation, which ratchets up the stigma for firms and individuals thinking about doing business with the group or any of its affiliates.

Write to Felicia Schwartz at Felicia.Schwartz@wsj.com

Appeared in the October 14, 2017, print edition as ‘Trump Threatens to End Iran Deal.’

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Venezuelan Bonds Fall as U.S. Trading Sanctions Loom

August 24, 2017

Some moves under consideration by Trump administration could have unpredictable consequences

Image result for venezuela, burning police vehicle, photos

Aug. 23, 2017 7:03 p.m. ET

Venezuelan bond prices tumbled Wednesday as traders grappled with the prospect that U.S. sanctions could restrict trading in the troubled South American nation’s securities.

The Trump administration is considering banning trading by U.S. banks of new debt issued by Venezuela or its state-owned entities, and possibly some existing debt, The Wall Street Journal reported on Wednesday. The move is aimed at weakening a government that Washington says has moved toward dictatorship, according to a senior administration official.

The U.S. Treasury has targeted foreign financial markets before. In 2014, it barred U.S. financial institutions from participating in new bond sales by Russia meant to raise money for the government, a move that had the effect of reducing the availability of dollar funding for the country.

But some moves under consideration are seen as extremely rare and could have unpredictable consequences. Investors couldn’t recall a time when the Treasury prevented financial firms from trading debt among themselves in the so-called secondary market, a move the Journal reported the administration is considering.

That move would aim to hurt the government of President Nicolás Maduro and his associates who hold these bonds, but could also harm U.S. and other private investors who own Venezuelan debt, analysts said — a factor officials have considered in the past when deciding which sanctions to implement.

“This would be a new step for Treasury and there would undoubtedly be collateral damage for U.S. institutional investors,” said Tim Ash, senior sovereign bond analyst at BlueBay Asset Management, a U.K. investment firm.

Prices for Venezuela’s government bonds due 2027 dropped as much as 4% to 39 cents on the dollar on Wednesday, while bonds from the state-owned oil company Petróleos de Venezuela SA due this November fell as much as 2.1% to 88.5 cents. Both bonds recovered slightly by the end of trading.

Venezuelan bond prices have been under pressure in recent weeks as investors began to worry that the cash-starved government was edging closer to default. Some worried that tough U.S. sanctions could push it over the edge.

When the Trump administration announced on July 31 sanctions on Mr. Maduro but not, as many feared, on Venezuela’s oil industry, many investors piled back into debt that offers double-digit yields.

News of another round of sanctions has raised the anxiety level around Venezuelan bonds again.

“I would not touch them with a 10-foot pole,” said Diego Ferro, co-chief investment officer at Greylock Capital Management, referring to any new bonds issued by the Maduro government and certain other existing debt.

Image result for Goldman Sachs, sign, photos

Goldman Sachs Group Inc. ran into criticism after its asset-management unit this year purchased $2.8 billion of debt held by the country’s central bank at a deep discount. Venezuelans accused Goldman of raising fresh cash for Mr. Maduro.

Goldman has said it purchased them through an intermediary and didn’t interact with the Venezuelan government directly.

The backlash from the trade has led some emerging-market bond analysts and traders to refer to such deals as “hunger bonds,” for their support of a regime that has restricted the flow of food and medicine so drastically to pay its debts that its people are starving.

U.S. investors are barred from holding debt of countries like Syria and North Korea, which are subject to comprehensive sanctions from the U.S. that bar all trade, said Judith Lee, head of the international trade practice of law firm Gibson, Dunn & Crutcher.

Such blanket sanctions could be problematic in Venezuela because the country sells much of its oil to the U.S. and owns Citgo Holding Inc., which has refineries and pipelines in the U.S. The U.S. has never applied a more tailored sanction on trading bonds of a country not already under a comprehensive ban, Ms. Lee said.

Treasury considered implementing a similar blockade on trading of Russian government bonds after Moscow intervened militarily in Ukraine but dropped the idea to avoid hurting U.S. bondholders, according to a person familiar with the matter.

Instead, Treasury barred U.S. banks from underwriting any new bond sales for Russia. Moscow circumvented the measure by issuing new debt through Russian banks that ultimately sold the debt to international investors in secondary trades.

Freezing trade of Venezuelan bonds would hit many emerging-market investors, since the country comprises 1.55% of the benchmark emerging market bond index operated by J.P. Morgan Chase & Co. The index includes securities that meet minimum liquidity criteria. A spokeswoman for J.P. Morgan declined to comment on how a ban might affect Venezuela’s role in the index.

Write to Matt Wirz at matthieu.wirz@wsj.com and Julie Wernau at Julie.Wernau@wsj.com

https://www.wsj.com/articles/venezuelan-bonds-fall-as-u-s-trading-sanctions-loom-1503529436

Washington Will Impose Greater Sanctions On Venezuela

August 22, 2017

By 

I cover business and investing in emerging markets.  Opinions expressed by Forbes Contributors are their own.
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Pro-government activists hold Long Live Chavez signs in Caracas on August 14, 2017. The ruling Socialists United Party will have no problem convincing loyal Chavistas (adherence to the political philosophy of Venezuelan God, er um, former president, Hugo Chavez) that the U.S. is out to overthrow their government again. (Photo by RONALDO SCHEMIDT/AFP/Getty Images)

Wait for it: Washington will impose greater sanctions on the embattled government of Venezuela.  President Trump has already announced more names to Treasury’s individual sanctions list, including Venezuelan president Nicolas Maduro. But more sanctions are right around the corner, especially if October elections look rigged.

In the war of words battle, Washington has been much more explosive of late.

On Aug. 14, vice president Mike Pence called Venezuela a “failed state” and that its downfall “threatened the security of the hemisphere and the people of the United States of America.” Pence was doing what all VEEPs do in this case, reiterate what the Commander-in-Chief said just days prior. On Aug. 12, Trump played his usual strongman hand and said, “by the way, I’m not going to rule out a military option.” While this is highly unlikely unless Maduro’s military begins overtly cracking heads in the streets of Caracas, or the government breaks down completely and needed some for of foreign military support to maintain order, the foreign policy press were quick to point out the poison in the president’s words. U.S. military intervention into Latin America is toxic history. If Latin Americans had statues of American statesmen dotting their landscape, they’d probably call for them to be removed. Memories of CIA-backed coup d’etats are not conspiracy theories, and so threats of sending the Marines into Venezuela would drive a wedge between Washington and its allies in South America, as everyone has now pointed out.

But on the other hand, Trump’s belligerence, coupled with some rank and file military members in Venezuela growing tired of civil strife, may have calmed Maduro down.

That said, what’s the latest stress in Venezuela and what is the likelihood of Maduro and his Socialists United Party (PSUV) rearranging the deck chairs to allow for majority rule, and get the country moving forward again

For starters, local elections won’t tip the power scales in Caracas. And PSUV is about as likely to give the majority opposition in the National Assembly a voice as Trump is likely to stop tweeting.

There is some good news worth noting: daily protests have become less violent. Venezuela has not retaliated against U.S. sanctions, and Maduro has signaled a willingness to talk with Trump (even though this Latin American crisis is not the fault of Washington). He also remains open to the normal presidential election cycle in 2018. All positives.

The president of Venezuela’s Constituent Assembly, Delcy Rodriguez, offers a press conference after holding a meeting with the new Truth Commission at the Foreign Ministry in Caracas on August 19, 2017.Venezuela’s president Nicolas Maduro accuses the United States of wanting to overthrow him. The Truth Commission will get to the bottom of this…  AFP PHOTO / Federico PARRA

There is still no clarity on the agenda from the new PSUV-centric Constituent Assembly (which replaces the legislative powers of the National Assembly, or congress) and there are mixed signals now as to whether this new political body represents an outright power grab by PSUV or was just a distraction designed to give them a breather from the opposition in congress. The opposition parties have all boycotted the Constituent Assembly, and they agreed to participate in the local elections in October 2017. They mostly stood down and did not vote for the Constituent Assembly because they felt their vote would not matter. As a result, pro PSUV voters, which represent a little under a third of the population, voted to give Maduro the rights to avoid congress completely.

The upcoming mayoral races won’t tip the scales of power and some see it as another rigged deal.

“We assume it’s a rigged process again,” says Siobhan Morden, a managing director at Nomura in New York, with regards to the upcoming local elections. “The opposition needs to defend whatever is possible in terms of representation across the institutions,” she says. “It’s also curious that President Maduro didn’t rule out the prospect for presidential elections in 2018. There has been a more conciliatory tone perhaps to discourage retaliation from the U.S. or breakaway dissidents from the military ranks.”

The market is watching Venezuela as closely as Latin America political junkies. Goldman Sachs recently forked over a billion dollars to buy the bonds of Venezuelan oil company PDVSA. Numerous hedge funds who love distressed assets have taken a buy and hold strategy on PDVSA’s long dated bonds, maturing beyond 2018, in hopes that Venezuela’s long democratic tradition trumps Maduro’s ideological push towards Havana-style politics. In such a free and open election, Maduro is expected to lose hands-down, sending bond prices soaring. PSUV ‘s base would continue to shrink, or barely hold water, following years of economic misery. The party is dependent on three types of voters: government employees (namely PDVSA workers), the poor (increasingly dependent on government hand-outs for survival and easily convinced an ant-PSUV party will take it all away) and communist ideologues fighting the good fight against Yankee imperialists from the bygone Cold War era.

A Citgo oil refinery stands in Corpus Christi, Texas. The company is owned by the Venezuelan government, with major equity stakes owned by Russian oil firm Rosneft. (Photo by Eddie Seal/Bloomberg)

Nomura Securities has been watching these developments closely. Morden thinks that the sanctions program will intensify next year.

“The Maduro administration has already crossed the line with an illegitimate Constituent Assembly that further consolidates power and undermines the opposition-controlled legislature,” she says. So much for majority rule in Venezuela. “The rigged local elections and consistent persecution of the opposition politicians should further motivate retaliation from the U.S. on their sanctions policy with the latent threat of sector sanctions next year the main constraint against a sustainable recovery in PDVSA bond prices.”

https://www.forbes.com/sites/kenrapoza/2017/08/21/washington-will-impose-greater-sanctions-on-venezuela/#2fe957e36ac8

Iran’s Parliament increases funding for missiles after U.S. sanctions — Lawmakers shouted: “Death to America.”

August 13, 2017

AFP

© Atta Kenare, AFP | Members of Iran’s Armed Forces attend President Hassan Rouhani’s swearing-in ceremony in Tehran on August 5, 2017. Rouhani warned the US against tearing up the nuclear deal as he was inaugurated for a second term.

Text by NEWS WIRES

Latest update : 2017-08-13

Iran’s parliament voted Sunday to allocate $520 million to develop its missile programme to fight Washington’s “adventurism” and sanctions, and to boost the foreign operations of the country’s Revolutionary Guards.

“The Americans should know that this was our first action,” said speaker Ali Larijani, after announcing an overwhelming majority vote for a package “to confront terrorist and adventurist actions by the United States in the region”.

A total of 240 lawmakers voted for the bill, out of the 244 parliamentarians present.

The vote came after fresh US sanctions in July against Iran, targeting Tehran’s missile programme.

“The bill is backed by the foreign ministry and the government and is part of measures by the JCPOA supervision committee to confront the recent US Congress law,” deputy foreign minister Abbas Araghchi.

He was referring to a 2015 nuclear deal with world powers, known officially as the JCPOA, under which Iran agreed to strict limits on its nuclear programme in exchange for an easing of sanctions.

The bill mandates the government to allocate an additional $260 million for the “development of the missile programme” and the same amount to the Revolutionary Guards’s foreign operations wing, the Quds Force, state news agency IRNA said.

After Larijani announced the vote results, lawmakers shouted: “Death to America.”

Venezuelans Watch the Military for Signs of Fraying Loyalty

August 7, 2017

CARACAS, Venezuela — As Venezuela’s political crisis spins further out of control, many are looking to the military to see if its once-unflinching loyalty to the socialist revolution might be fraying.

On Sunday morning, Venezuelans awoke to news that a small group of armed men tried to take over a major military base in the central city of Valencia after a long-mutinous national guard captain appeared in a video calling for rebellion.

Military chiefs said the rebels were trying to steal weapons [AFP]Military chiefs said the rebels were trying to steal weapons [AFP]

The government said what it described as a “terrorist attack” led mostly by civilians dressed in fatigues and deserted officers, not active troops, was quickly put down and seven people were arrested. It wasn’t clear how much support existed for the so-called “Operation David,” but dozens of civilians startled by the sound of gunfire poured into the streets singing Venezuela’s national anthem to back the rebels.

Many people wonder whether the tension-filled incident could foreshadow a bigger uprising to come from a military with a long history of rebellion and whose troops — like many Venezuelans — are increasingly caught up in the nation’s economic and political crisis.

Analysts say that such a scenario is unlikely for now.

While signs of disgruntlement are growing as security forces come under a barrage of rocks and Molotov cocktails during almost-daily anti-Maduro protests, soldiers also fear persecution under an opposition government. In addition, they face risks that any plans for a secret uprising would be found out.

Image result for former army Gen. Hebert Garcia Plaza, photos

Former army Gen. Hebert Garcia Plaza

“They feel trapped,” said former army Gen. Hebert Garcia Plaza, a former Maduro minister. Since seeking exile in Washington in 2015 following accusations of corruption by Maduro, he has emerged as a sought-after filter of information for journalists, the opposition and, increasingly he says, distraught soldiers.

“There’s lots of unease, but they can’t provoke a political change without a clear horizon of what comes after Maduro,” Garcia Plaza said.

Venezuela’s military accumulated unmatched power and privilege in the past two decades of socialist rule, and Maduro has been increasingly relying on the armed forces as his own grip on power weakens. Last week, with the support of top generals, he plowed forward with a plan to seat an all-powerful assembly mandated with rewriting the constitution. Political opponents and dozens of foreign governments consider it an illegitimate power grab that will strip Venezuela of its last vestiges of democracy.

The opposition is urging the military to switch loyalties and pressure Maduro to cede to its demands, including freeing hundreds of political prisoners and setting a timetable for presidential elections. But many in the military, especially higher-ranking officers, have already hitched their fate to the revolution.

Following a 2002 coup, then-President Hugo Chavez, himself a former tank commander, carried out a deep purge of the military and promoted loyal officers to top positions in the government.

Maduro has expanded the military’s political power even further, giving them control of key sectors of the economy, such as food importation. He also rewarded soldiers with pay raises and bonuses that are the envy of civilians struggling amid triple-digit inflation and widespread shortages.

Even before the ballots were counted in the July 30 election for the constitutional assembly, Defense Minister Gen. Vladimir Padrino Lopez went in front of the cameras accompanied by the top military brass to celebrate the results as a defeat for imperialism.

Despite the outward loyalty, some cracks began to appear even before Sunday’s attack. At least 106 members of the armed forces, some of them junior officers, have been jailed for alleged crimes such as rebellion and treason since protests began in April, according to the lists provided by an army official on the condition of anonymity for fear of reprisal. There also have been a few high-profile defections from lower-ranked soldiers that have become social media sensations.

One is Giomar Flores, a low-ranking naval intelligence officer who in June released a video calling for the armed forces to uphold the constitution. Before fleeing to Colombia, where the video was recorded, he was assigned to policing food lines in Falcon state, a job that in theory afforded access to hard-to-find staples but which ended up turning him against the institution he loved.

“I decided my future was worth more than a bag of food,” the 25-year-old Flores said in an interview with The Associated Press from Bogota.

He said the top military command was corrupted by the government and divisions within the institution more apparent than ever.

“The armed forces today are like a snake, whose head is the top command that sadly is subordinated to the regime,” Flores said. “If you cut off the head, you’ll find us the troops.”

But a full-grown rebellion such as the one led by then-Lt. Col. Chavez in 1992 faces enormous obstacles, not the least of which is a dedicated counterespionage effort by Maduro.

“It’s very hard to create critical mass without being found out,” said Ivan Briscoe, head Latin American analyst for the International Crisis Group. “In an era of instant digital communications, authorities can be alerted to the risk of destabilization very quickly.”

Far from resolving Venezuela’s problems, a coup would trigger a full-blown international crisis and likely split the military, leading to even higher levels of violence approaching a civil war, Briscoe said. Opposition leaders, wary of awakening ghosts in a region that has turned its back on a century of military takeovers, are instead calling for behind-the-scenes pressure and restraint on using force against protesters.

A failure of the socialist system also could expose many senior officers to prosecution for human rights abuses and corruption. Several have already been targeted by U.S. sanctions, including the head of the army and national guard.

The opposition has gone to great lengths to say it will avoid a witch hunt if it gains power. But many in the military are unconvinced that any promises from the traditionally fragmented opposition can be taken seriously, given the huge challenges it would face governing, Garcia Plaza said.

“Many would rather trust the devil they know then the one they don’t,” he said.

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Associated Press writer Jorge Rueda reported this story in Caracas and AP writer Joshua Goodman reported from Bogota, Colombia.

Venezuela’s Ex-Foreign Minister Sworn In to Head New Assembly

August 4, 2017

CARACAS — Venezuela’s former foreign minister Delcy Rodriguez was on Friday sworn in as president of a new Constituent Assembly, which was installed by the government and authorized to expand the powers of leftist President Nicolas Maduro.

Governments from Spain to Canada to Argentina have spoken out against the assembly and the United States imposed sanctions on OPEC member Venezuela, which is grappling with a political and economic crisis.

(Reporting by Caracas newsroom; editing by Grant McCool)

The Latest: Kremlin Say US Political Will Needed to Fix Ties

July 31, 2017

MOSCOW — The Latest on U.S-Russian tensions (all times local):

1:10 p.m.

The Kremlin says Washington needs to show “political will” for Russia-U.S. relations to recover.

President Vladimir Putin’s spokesman, Dmitry Peskov, said Monday that it will take time for the U.S. to rid itself of what he called “political schizophrenia.” He added that Russia remains interested in constructive cooperation with the U.S.

On Sunday, Putin said the U.S. would have to cut 755 of its embassy and consulate staff in Russia — a sweeping reduction which he described as a response to new U.S. sanctions. The Russian Foreign Ministry also announced closing down a U.S. recreational retreat on the outskirts of Moscow as well as warehouse facilities.

Moscow’s move showed that its earlier hopes for an improvement in Russia-U.S. ties after Donald Trump’s victory in the U.S. presidential election have withered.

____

12 noon

Russian President Vladimir Putin has demanded that United States cut its embassy and consulate staff in Russia by 755 people, heightening tensions between Washington and Moscow three days after the U.S. Congress approved sanctions against Russia.

The U.S. State Department called Putin’s move “a regrettable and uncalled-for act.”

The announcement Sunday also came hours after U.S. Vice President Mike Pence landed in Estonia, which borders Russia, for talks with the country that holds the rotating European Union presidency.

Russian’s Foreign Ministry on Friday first ordered a reduction by Sept. 1 in U.S. diplomatic personnel in Russia to 455 people in response to a new package of American sanctions.

The sanctions seek to punish Moscow for meddling in the 2016 U.S. election and for its aggression in Ukraine and Syria.

Venezuela Crisis Enters New Phase With Sunday Vote — “The last chance for political resolution of Venezuela’s problems is gone.”

July 29, 2017

CARACAS, Venezuela — Despite four months of deadly protests and the threat of U.S. sanctions, Venezuela on Saturday found itself 24 hours away from a consolidation of government power that appeared certain to drag the OPEC nation deeper into a crisis that has entire neighborhoods battling police and paramilitaries while the poor root for scraps in piles of trash.

In the opposition strongholds of relatively wealthy eastern Caracas, skinny teenagers manned barricades of tree branches, garbage and barbed wire torn from nearby buildings. Clashes with police began late Friday afternoon and lasted into the night. The months of violence has left at least 113 dead and nearly 2,000 wounded.

Image may contain: 1 person, sky, crowd and outdoor

An opposition activist holds a flag reading “No more dictatorship” during a blockade to protest against Venezuelan President Nicolas Maduro in Caracas, July 18, 2017.
Juan Barretp/AFP/Getty Images
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An opposition activist holds a flag reading “No more dictatorship” during a blockade to protest against Venezuelan President Nicolas Maduro in Caracas, July 18, 2017.

The rest of the capital was calm. Across the city, residents said they wanted President Nicolas Maduro out of power but didn’t want to risk their lives or livelihoods taking on his socialist government and its backers.

“I have a young daughter, I can’t risk anything happening to me,” said Maria Llanes, a 55-year-old flower-store worker who lives in a south Caracas neighborhood dominated by armed pro-government motorcycle gangs. “What do I do, protest in this neighborhood, so that they kill me? This area’s run by a mafia loyal to the money the government pays them.”

Maduro called for a massive turnout Sunday for a vote to elect members of an assembly tasked with rewriting the 18-year-old constitution created under President Hugo Chavez. The opposition is boycotting because, it says, the vote called by Maduro was structured to ensure that his ruling socialist party dominates.

The opposition says the government is so afraid of low turnout that it’s threatening to fire state workers who don’t vote, and take away social benefits like subsidized food from recipients who stay away from the polls.

Image result for venezuela, holding flag

By Wednesday, the resulting National Constituent Assembly will become one of the most powerful organs in the country, able to root out the last vestiges of democratic checks and balances in favor of what many fear will be a single-party authoritarian system.

First Lady Cilia Flores, a candidate for the assembly, said it would create a commission to ensure those responsible for the current political upheaval “pay and learn their lesson.” Diosdado Cabello, first vice president of Venezuela’s socialist party, says the assembly will strip legislators in the opposition-controlled National Assembly of their immunity from prosecution. He said the office of Venezuela’s chief prosecutor, who recently became one of Maduro’s most outspoken critics, would be “turned upside down.”

“On July 30, the constitutional assembly will happen,” Maduro said Friday at a ceremony marking the completion of subsidized housing. “I’ve been loyal to Chavez’s legacy. Now it’s your turn.”

The United States has imposed successive rounds of sanctions on members of Maduro’s administration and Vice President Mike Pence on Friday promised “strong and swift economic actions” after Sunday’s vote. He didn’t say whether the U.S. would sanction Venezuelan oil imports, a measure with the potential to undermine Maduro but cause an even deeper humanitarian crisis here.

Opinion polls show that more than 70 percent of the country is opposed to Sunday’s vote. But as many as half of all Venezuelans support neither the government nor the opposition — a phenomenon evident in the glum paralysis that has gripped much of the country as protesters and police wage nightly battles. While Venezuelans bitterly complain about shortages of food and medicine, few still respond to opposition calls for protests, a far cry from early protests that saw hundreds of thousands pouring into the streets.

“Many strange things have taken place this week that makes you wonder what is going on with the opposition. I don’t know. The opposition is at home, the opposition is hiding,” Caracas resident Abed Mondabed said.

The opposition has organized a series of work stoppages and a July 16 protest vote that it says drew more than 7.5 million symbolic votes against the constitutional assembly. It called late Friday for massive marches on the day of the assembly vote.

In the eastern neighborhood of Bello Monte, the site of fierce battles with police in recent days, a 54-year-old shop owner named Ricardo watched masked adolescents block a road with dumpsters as a soot-smeared, emaciated man picked through their contents for bits of food.

Ricardo, who declined to provide his last name for fear of government retaliation, said he felt the Sunday vote meant the last chance for political resolution of Venezuela’s problems was gone, ushering in an even more violent phase.

“Negotiations have come to an end,” he said. “The fight will continue and all of a sudden it could be a lot tougher.”

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