Sanctions relief and political timeline in Venezuela: how close are democratic elections?

The decision announced by the Office of Foreign Assets Control (OFAC), which depends on Treasury Departmentindicates that United States companies will be able to carry out financial operations with the Central Bank of Venezuela, Banco de Venezuela, Banco Digital de los Trabajadores and Banco del Tesoro.

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The move comes less than two weeks after The US will remove the president in charge of Venezuela, Delcy Rodríguez, from its sanctions list.

The lifting of these sanctions was one of the main demands of Rodriguez to begin to show better economic results and thereby stabilize the country, since there are sectors of society that are already demanding increase in salaries and pensions.

Due to the sanctions, for years the BCV was practically isolated from the international financial system. The sanctions prevented foreign banks—especially those with ties to the United States—from carrying out operations with the Venezuelan entity.

In practice, this meant that Venezuela could not move money freely in dollarshad serious difficulties receive payments from abroad and had to resort to indirect or intermediary mechanisms to collect key revenues, such as those from oil.

The financial blockade also affected internal operations: Venezuela faced obstacles to pay importsmanage reserves or channel currencies within their own economy. Although the country generated income, a significant part was trapped or circulated through opaque channels, outside the traditional banking system.

What changes now for the Venezuelan economy?

Now, financial institutions are once again authorized to carry out transactions with the BCV and the other three bankswhich opens the door to a partial reconnection with the global financial system.

From now on, the BCV can send and receive international transfersoperate more fluidly in currencies and recover links with its global financial intermediaries.

In practical terms, The change allows Venezuela to directly receive income in dollarsincluding those derived from its oil exports, without depending on intermediaries. It also facilitates the payment of external commitments, the import of goods and greater circulation of currency within the country, which could have effects on the exchange market and economic activity in general.

However, the scope of the relief is limited. Other sanctions, especially those directed at officials, state companies and strategic sectors, are still validand the flexibility can be reversed if certain political conditions demanded by the United States are not met.

In summary, the change does not imply full normalization, but it does modify a key element: Venezuela goes from having severe difficulties in using its own money to recovering, at least partially, the ability to move it within the international financial system.

First the economy, then the elections

The political scientist Luis Nunes considered that the relief of sanctions for Venezuelan banks is part of a US gradual strategy and not a full reestablishment of relations with Caracas. In his opinion, it is a opening still conditionedregistered in a schedule promoted by Washington to progressively dismantle the political model inherited from Chavismo.

“They are lifting sanctions very slowly. It is part of a process that was already planned,” explained to The Commerce. According to Nunes, this movement corresponds to a “second stage”focused on economic stabilization of the country. The next phase, he added, would be the call for democratic elections.

In this context, the analyst maintained that financial relief seeks give oxygen to the Venezuelan economyalthough he acknowledged that it involves negotiating with the current government headed by Delcy Rodriguezwhich he described as a pragmatic decision by Washington. “It is a political game. The United States is interested in making this work, but it is handling everything with caution”, he stated.

Nunes warned, however, that Within the ruling party there would be no rush to move towards elections. He cited recent statements by Jorge Rodriguezpresident of the National Assembly, to point out that the government’s priority would be economic recovery before an electoral process. He even assured that there are internal movements regarding an eventual candidacy of Delcy Rodríguez, who—according to the versions he handles— He could leave power to campaign with a renewed image, distanced from traditional Chavismo.

In parallel, he maintained that the United States maintains a strong control over released resourcesespecially those linked to oil. “They know exactly what the money is being spent on,” he indicated, while underlining that the relaxation of sanctions could also help the government contain social unrest, reflected in recent protests over salaries and pensions.

Regarding the political times, the analyst estimated that the elections would not be immediate and they could only be finalized next year, since – as he said – the conditions are not yet in place. However, he highlighted that Independent surveys show growth in support for the opposition, particularly for María Corina Machado.

Regarding the economic reforms promoted by the government, Nunes considered that they respond to both internal interests and the demands of the United States, in sectors such as oil, mining and foreign investment.

Finally, he was critical of the call amnesty law for political prisoners approved by the ruling party, considering that it does not meet the demands of the opposition or the international community. “It is a disguised law. It is not to free political prisoners, but to favor the regime itself,” He maintained, by ensuring that There are still more than 400 detainees for political reasons in the country.