On August 8, El Informal sanctions (ELS) announced the first formal sanctions imposed by the Venezuelan government.
While the announcement came just days after the United States imposed its first formal financial embargo on the country, the announcement did not come as a shock to Venezuelan investors and investors from other countries, including the United Kingdom, who have been trying to help the country.
In addition, Venezuelan officials announced a new program to give the government new options to restrict the access to capital and impose sanctions on its oil and gas industries.
“The government has taken steps to limit the access of investors to the country,” said Luis Carlos Castaneda, a spokesperson for the Venezuelan Financial Market Commission (VECC), the central agency tasked with monitoring the country’s capital controls.
“This has been done to protect the economy and the people from the consequences of the sanctions.”
VECC has also taken steps in an attempt to ensure that foreign investors can’t access the country to conduct business, according to the statement.
These steps include making it more difficult for companies to access foreign banks and limiting the number of people that can be in the country at a given time, Castanida added.
These measures are designed to prevent foreign investors from investing in Venezuela, according the statement, which did not mention the sanctions specifically.
“While it’s not a new policy, this is the first time we have seen a government go so far as to restrict foreign investment and assets,” Carlos Mendez, the vice president of the Association of American Businesses (AAB), told Ars.
“It’s going to be interesting to see how this works out.
The Venezuelan government has been doing things for a long time, and we’ve seen these things in the past.”
Castanada said that the first steps taken by the VECF in the last few days include suspending the export of all oil products from Venezuela, cutting off the sale of petroleum products from the country for six months, and closing all oil production facilities.
VECE also banned the import of all products from oil-rich nations Venezuela and Bolivia, including goods from companies that import Venezuelan crude.
These restrictions have made it difficult for foreign companies to get access to Venezuela, and the restrictions have also made it harder for companies from other nations to invest in Venezuela.
In order to continue investing in the Venezuelan economy, Castinada said, the government has had to make other changes.
For example, he said, it’s been restricting the number and type of companies that can apply for foreign capital.
The government has also stopped foreign investments in the private sector and has closed all state-owned enterprises.
In a statement issued on August 9, the VEECC stated that it will continue to monitor the situation closely, but that the new measures have led to a reduction in the number companies that have applications for foreign financing.
It also said that it plans to extend the moratorium on foreign investment until the end of the year.
“We continue to evaluate the measures taken and have to make decisions on the next steps to be taken by this month,” said Castanade, referring to the new sanctions.
Castanades statement did not address whether the government would extend the embargo to foreign companies, or if it would simply continue to restrict access to the capital.