Venezuela’s opposition is discussing how it might move frozen funds in foreign bank accounts into a proposed United Nations-administered humanitarian fund, including moving small amounts to protect the money from creditors, four sources said.
By Reuters – Vivian Sequera and Mayela Armas
Jan 20, 2023
Venezuela’s government and opposition in November asked the United Nations to manage more than $3 billion now held in foreign banks, gradually releasing the money to fund humanitarian efforts.
The fund is not yet operational and there is no timeline for its implementation. Adding to the uncertainty is the opposition’s recent replacement of its U.S.-backed interim government with new leadership, which Washington has said it will recognize.
The socialist government of President Nicolás Maduro and the opposition are in sporadic talks to end years of political stalemate. The opposition has refused to participate in elections they have called rigged, while Venezuela’s once oil-rich economy has collapsed.
Backed by many Western countries, the opposition controls some Venezuelan assets abroad, including refiner Citgo Petroleum, which had its creditor protection extended this week by the United States. On Thursday the opposition assembly appointed a committee to manage foreign assets.
Though at least one group of Venezuela’s bondholders supports the proposed U.N. fund, the opposition fears creditors might seek to collect the assets to begin recouping the more than $60 billion the country owes to creditors.
The Maduro government ramped up pressure this week, saying it sees no reason to return to the Mexico-based talks unless the assets are made available.
Members of an opposition delegation met with officials in Washington last week to discuss how to move money into the fund without exposing it to creditors, said four sources with knowledge of the matter.
One option is to move relatively small amounts, which would cost creditors too much in legal fees to be worth pursuing, they said.
The sources did not provide details about other strategies but said the process of moving money would “take time”.
The money that could feed the fund “is in different jurisdictions with distinct technical and judicial problems that need to be dealt with individually to be able to protect the resources,” Gerardo Blyde, the head of the opposition’s negotiating team, said on Friday.
Moving ahead with unfreezing the assets is the responsibility of both sides, he added, and the resources were never going to be transferred immediately to the proposed fund.
The U.S. State Department did not immediately respond to a request for comment on potential strategies for moving funds. A spokesman said it urged Maduro to follow through on holding negotiations while the fund is being put together.
The United Nations has expressed support for the potential fund, saying it could help millions of vulnerable Venezuelans, but has not provided details on how it could be administered.
“The UN continues to engage with the parties with a view to finding a solution,” spokesman Stephane Dujarric said last week.
Read More: Reuters – Venezuela opposition may move funds in small amounts to avoid creditors -sources