Trump Orders Sanctions on Venezuela Gold to Pressure Maduro

(Bloomberg) -- President Donald Trump signed an executive order authorizing new sanctions on Venezuela’s gold sector, in a bid to disrupt trade with Turkey that U.S. officials fear is undermining efforts to pressure the South American nation’s president, Nicolas Maduro.

The order, signed Wednesday by Trump and announced at a speech Thursday by National Security Adviser John Bolton, targets people operating corruptly within Venezuela’s gold sector. It’s expected to significantly impact the country’s economy, according to a senior administration official who requested anonymity to discuss the announcement before it was made.

Bolton’s speech at Freedom Tower in Miami, the building where the federal government received many refugees fleeing Fidel Castro’s Cuba, framed the sanctions as part of a broader effort by the U.S. to promote democracy in the Americas. He also announced plans to sanction officials in Cuba and Nicaragua, branding the three countries a “Troika of Tyranny.”

“This triangle of terror stretching from Havana to Caracas to Managua is the cause of immense human suffering, the impetus of enormous regional instability, and the genesis of a sordid cradle of communism in the Western Hemisphere,” Bolton said. “Under President Trump, the United States is taking direct action against all three regimes to defend the rule of law, liberty, and basic human decency in our region.”

Trump has sought to scale back his predecessor Barack Obama’s diplomatic opening to Havana. In addition to the gold sanctions, Bolton announced that the State Department sanctioned more than two dozen additional entities owned or controlled by the Cuban military and intelligence services, prohibiting financial transactions between them and U.S. citizens or businesses.

“The Cuban military and intelligence agencies must not disproportionately profit from the United States, its people, its travelers, or its businesses,” Bolton said.

American officials say the sanctions are a consequence of Cuban efforts to aid the Maduro government, and separate from the U.S. response to the unexplained ailment detected among American diplomats on the island.

The Treasury Department is expected to outline implementation of the new Venezuela sanctions authority later Thursday. While the initial effort will focus on the country’s gold sector, Trump’s order gives the State and Treasury departments authority to target additional industries in the future.

“The new sanctions will target networks operating within corrupt Venezuelan economic sectors and deny them access to stolen wealth,” Bolton said. “Most immediately, the new sanctions will prevent U.S. persons from engaging with actors and networks complicit in corrupt or deceptive transactions in the Venezuelan gold.”

Nicaragua is in the Trump administration’s crosshairs because of a violent political crisis sparked earlier this year after President Daniel Ortega announced changes to the country’s social security program. The U.S. wants free and fair elections in the country, the Trump administration official said.

Venezuela’s gold industry has been under scrutiny by U.S. officials in recent weeks, with the Treasury Department noting that many mines are run by criminal gangs, a situation that is environmentally disastrous. The sanctions are likely to have a particular effect on trade with Turkey, with tons of gold sent there annually for refinement and processing. Officials have also voiced concern that some of the gold may find its way to Iran in violation of sanctions on the Islamic Republic.

Trump Orders Sanctions on Venezuela Gold to Pressure Maduro

Venezuela’s economy collapsed as revenues from oil production plunged, leading to widespread food and medicine shortages and hyperinflation. Yet Maduro and his socialist government remain in power, many opponents have been arrested or fled the country and demonstrations have been violently suppressed. Trump has suggested a “military option” for ending Venezuela’s misery.

Bolton’s speech Thursday in Miami didn’t address Central American countries that have recently drawn Trump’s ire after thousands of their citizens formed so-called caravans in an attempt to migrate to the U.S. and seek refugee status.

Trump has repeatedly threatened to cut aid to countries from which the caravans emerged --- Guatemala, Honduras, and El Salvador. But the official said the U.S. has had a productive dialogue with those governments since the formation of the migrant groups.

Leaders in those countries have blamed leftist political opponents and the government of Venezuela for organizing the caravans. The Trump administration has considered those explanations as well as assistance offered by the countries as it has evaluated the aid programs, according to the official.

Bolton also praised the election of Jair Bolsonaro, the fiery populist elected on Sunday as the leader of Brazil. Bolsonaro has said he approves of torture, promises to curtail environmental conservation efforts, and has a history of insulting statements about women, sexual assault, and gay people. Bolton called Bolsonaro a “like-minded” leader.

The U.S. does not have concerns about Brazil’s democratic institutions and sees Bolsonaro as a partner on many shared regional, security and economic challenges, the administration official added.

©2018 Bloomberg L.P.