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Venezuela opposition seeks to protect billions in humanitarian funds from creditors -sources

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2022-12-07T17:17:30Z

CARACAS (Reuters) – Venezuelan opposition parties are seeking to protect billions of dollars in UN administered humanitarian funds from foreign creditors by keeping the details of their release confidential, according to five people with knowledge of the efforts.

Delegations from the government of President Nicolas Maduro and the opposition returned to the negotiating table in Mexico at the end of November, after a year’s pause, and signed an agreement aimed at gradually releasing frozen funds worth an estimated $3 billion.

But opposition leaders worry that the OPEC nation’s creditors could take legal action to seize some of the funds to collect unpaid debts, the sources close to the matter, who asked to remain anonymous, told Reuters.

The Ministry of Communication did not immediately respond to a request for comment. Gerardo Blyde, head of the opposition delegation at the talks, declined to comment.

Held in Venezuelan-owned accounts overseas and mostly comprising the proceeds of oil sales, the money was frozen by U.S. and European banks after the United States ramped up sanctions under the administration of President Donald Trump. The sanctions were designed to pressure President Nicolas Maduro to take steps toward free elections.

The funds are to be used in the areas of health, education, food, infrastructure and electricity to help alleviate the economic and social crisis in the oil-rich nation, as stipulated in the agreement signed between the parties in Mexico on Nov. 26.

Maduro said last week that he expects the resources to be released “immediately” and no later than December.

The amounts deposited in the accounts, and the banks that hold them, have not been disclosed, the sources said, adding that they will do their best to keep them secret from creditors going forward.

Venezuela owes more than $60 billion to creditors for the nationalizations of companies carried out a decade ago under then-president Hugo Chavez, as well as for the defaulted bonds of the country and state oil company PDVSA.

Some U.S. creditors have been granted court rulings that would enable them to negotiate the sale of Venezuelan assets abroad, such as its Houston-based refiner Citgo, a subsidiary of state-owned PDVSA, to collect debts. But some of these assets are under Treasury Department protection.

Citgo, considered Venezuela’s most valuable asset, has a Treasury Department license that expires in January and which the opposition expects to be extended for another year to protect it from creditors. The refiner was used as collateral for the issuance of defaulted 2020 PDVSA bonds.

The “social agreement” governing release of the frozen funds included the creation of a verification committee that will supervise the distribution and execution of the humanitarian fund and the projects that will receive the money.


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