CUA Law professor Antonio Perez was quoted in a January 29, 2019, Law360 article entitled "New Sanctions Throw Wrench At Venezuela's Creditors"
New Sanctions Throw Wrench At Venezuela's Creditors Catholic News Agency
By: Caroline Simson
Date: January 29, 2019
The Trump administration expressed a clear desire on Monday to preserve assets for the Venezuelan opposition leadership as it unveiled sanctions against the country's state-owned oil company, further complicating efforts by the crisis-ridden nation's creditors to collect their debts.
The sanctions, issued as the U.S. throws its support behind Venezuela's interim president, Juan Guaidó, freeze all property and interests belonging to Petróleos de Venezuela SA - a primary source of income and foreign currency for Venezuela - that are subject to U.S. jurisdiction. Moreover, all transactions within the U.S. involving PDVSA are now prohibited unless they are otherwise licensed or authorized by U.S. authorities.
The sanctions come amid a closely watched appeal in the Third Circuit challenging an order issued last summer in Delaware allowing the Canadian mining company Crystallex International Corp. to seize shares in Citgo Petroleum Corp.'s parent company to enforce a $1.2 billion arbitral award against Venezuela. The parent company, PDV Holding Inc., is a subsidiary of PDVSA, and U.S. District Judge Leonard P. Stark's August decision has prompted other creditors to scramble to grab their piece of Citgo, Venezuela's most valuable commercial asset in the U.S.
While experts say it's unclear exactly how the sanctions will affect Venezuelan creditor rights, one thing that seems apparent is that ensuring Venezuela's creditors are repaid is not a priority for the Trump administration.
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While the U.S. Treasury Department could theoretically issue licenses for Venezuela's creditors authorizing certain transactions and activities related to PDVSA, such an action is unlikely to be a priority for the Trump administration, according to Antonio F. Perez, a law professor at the Catholic University of America's Columbus School of Law who previously spent several years working at the Office of the Legal Adviser of the U.S. Department of State.
"The point here from the foreign policy standpoint is to maximize resources available to the entity you're trying to support, so it's hard for me to imagine that creditors of the government are going to be first in line," he said. "[T]o the extent you're trying to smooth a transition and create political support for a new regime that replaces the Maduro regime, you're not going to want to squeeze the new Venezuelan government's capacity to provide basic services for its people."