(Bloomberg) -- President Donald Trump imposed further sanctions on Venezuela, freezing the government’s assets in the U.S. and adding immigration restrictions in a move aimed at stepping up pressure on the regime of Nicolas Maduro.
Property belonging to the Venezuelan government “may not be transferred, paid, exported, withdrawn, or otherwise dealt in,” Trump said in an executive order released late Monday by the White House. The U.S. will also block entry into the U.S. by any Venezuelan citizen determined to have assisted or acted on Maduro’s behalf.
Together, the moves put Venezuela on the same footing as countries like North Korea and Iran that the U.S. has sought to isolate from the rest of the world, and threaten nearly any company or person who deals with the country with exile from the international financial system.
While the new order is sweeping in scope, it’s unclear whether the new measures will have a significant impact since the vast majority of the Venezuelan government’s income derives from oil and gold -- two areas where Maduro’s regime already faces heavy sanctions.
A spokesman for the White House National Security Council didn’t respond to a request for comment about whether companies like Chevron Corp. (NYSE:CVX) -- which was just granted a three-month waiver allowing it to continue producing oil and gas in the country -- would be impacted by Trump’s latest move.
The order follows months of unsuccessful efforts to pressure Maduro into leaving office. Those include the U.S. recognition of Juan Guaido, the leader of Venezuela’s national assembly, as the country’s legitimate leader, and the imposition of sanctions on more than 100 Venezuelan individuals and entities including the state-run oil company, Petroleos de Venezuela SA.
Last week, Trump told reporters he was considering a blockade or quarantine of Venezuela. And White House officials have warned that Maduro had only a short window to voluntarily leave power or face stricter measures.
Trump’s move comes as his national security adviser, John Bolton, is set to appear at a conference Tuesday in Lima of nations that have recognized Guido as Venezuela’s rightful leader. U.S. Commerce Secretary Wilbur Ross, who’s also expected to attend the conference in Peru, last week outlined plans to rebuild Venezuela’s financial institutions and infrastructure.
“Venezuela will continue to deteriorate until the internationally recognized government of Juan Guaido implements needed economic, political and social reforms,” Ross said in a speech to Latin American business executives in Brasilia.
More than 50 countries including the U.S. have recognized Guaido as Venezuela’s interim president following Maduro’s 2018 re-election, which was tainted by high voter abstention and claims of fraud.
The threat of sanctions from the U.S. will likely deter many individuals and companies from doing business with the Venezuelan government going forward. Yet it’s unclear whether countries with closer relations with Caracas -- including China and Russia -- will follow suit, potentially dulling the full impact of the new measures on the Venezuelan government.
Francisco Rodriguez, Torino Capital chief economist, said the order essentially formalized a “a de facto ban on transactions between U.S. persons and the Venezuelan government.” Most Venezuelan assets outside the country, he said, had already been seized by Guaido’s allies.
Still, he said, the order could make financial institutions even more wary of doing business in Venezuela and stir concerns about secondary sections with implications for the energy market.
“If the U.S. effectively levies the threat of secondary sanctions on oil sales to India, that could lead Venezuela to lose one of its two most important remaining oil markets,” Rodriguez said.
The new restrictions announced Monday contain some humanitarian exemptions. The measures will permit transactions that provide the Venezuelan people with “articles such as food, clothing, and medicine intended to be used to relieve human suffering,” according to the executive order.
Earlier Monday, Bolton said Maduro’s government is feeling the pressure of U.S. sanctions, and expressed optimism about prospects for a change in government that will make way for new elections. The U.S. is opposed to elections while Maduro remains in power, he said.