Office of the Press Secretary
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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 |
Tuesday, February 18, 2020
Background Press Call on Venezuelan Policy
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