(Bloomberg) -- The US will determine future sanctions on Venezuela based on whether President Nicolas Maduro’s government fully releases voting data from the country’s disputed election over the weekend, according to senior Biden administration officials.
The results of the vote don’t track with independent data the US has seen, including exit polls, which implies the official outcome may not reflect how people actually voted, according to the officials, who spoke to reporters on the condition they not be identified.
The international community has criticized Maduro for barring many opposition candidates from running, including former lawmaker and opposition leader Maria Corina Machado. A clean election is a condition for the US to remove sanctions on the Venezuelan oil industry. The officials said that the US isn’t currently considering retroactively revoking existing oil and gas licenses.
While the country’s electoral authority said Maduro defeated rival Edmundo González, an exit poll conducted by US firm Edison Research had González winning by more than 30 percentage points. Maduro has said polling totals were delayed because of a cyberattack, and on Monday accused Machado of election sabotage.
Secretary of State Antony Blinken and the National Security Council earlier flagged “serious concerns” over the results.
“There’s still some tabulation going on there, and we want to respect that process,” NSC spokesman John Kirby said Monday. “I won’t get ahead of a decision that hasn’t been made here in terms of consequences. We’re going to hold our judgment until we see the actual tabulation of the results.”
Sanctions on Venezuela, imposed under President Donald Trump, has kept the country blocked from international financial market and accelerated a drop in oil output, worsening a grim economic scenario that has pushed millions of citizens to flee.
“It’s difficult to contemplate a scenario where there would be a dramatic escalation because there’s just so little room to ratchet sanctions pressure upward at this stage,” said Jason Prince, a partner at Akin Gump Strauss Hauer & Feld LLP and former chief counsel for the US Treasury’s Office of Foreign Assets Control. “There’s going to be some difficult decisions to be made internally as to what steps can be taken, what messaging can be delivered” and how to work with partners also concerned about the validity of the elections, he said.
After easing sanctions last year, President Joe Biden’s administration announced in April that it would be reimposing oil sanctions on Venezuela, ending a six-month reprieve, after determining the Maduro regime failed to honor a deal to allow a fairer vote in Sunday’s election.
The Treasury Department allowed the license that permitted some oil and gas activities to expire, and the affected companies had until the end of May to wind down operations. The ruling didn’t apply to Chevron Corp., a significant producer in Venezuela through joint ventures with the state oil company, allowing it to continue operating.
US officials have repeatedly said that sanctions relief depended on Maduro meeting the terms of an agreement from last October to allow inclusive and competitive elections. They determined that while some Venezuelan authorities met aspects of the deal, Maduro did not fully comply with the its spirit, citing moves to exclude some opposition candidates from running.
“We believe the US administration will maintain the status quo unless presented with clear fraud evidence, and that as of now, we believe further sanctions are unlikely,” Donato Guarino, a strategist at Citigroup Inc., said in a research note. Sustaining oil supplies to keep pressure off prices “and mitigating immigration remain key in a potential relationship with the Venezuelan administration in the future,” he wrote.
--With assistance from Michelle Jamrisko.
(Updates with sanctions background, comments from seventh paragraph.)
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