Venezuela - Maduro's relationship with Iran critical for sanctions evasion in 2020
I have a chapter in a new Wilson Center book that looks at Maduro's political and economic alliances that have helped keep him in power.
This morning I participated in a Wilson Center event about Venezuela’s international relations. The event launched a book on the same topic in which I have a chapter about Venezuela’s relationship with Iran.
Today’s newsletter has a quick summary of points I made in the chapter and at the event.
As countries including Russia and China took a half step back from Venezuela in 2019 and 2020 due to a variety of reasons (fear of sanctions, tired of throwing good money after bad, general distraction of covid), Iran increased its partnership. Iran provides technical assistance to Venezuela in terms of sanctions evasion, with Venezuela using many of the same techniques to evade tracking in the maritime environment. Venezuela has also set up similar financial facilitation networks to trade in gold with Turkey and other allies.
On top of technical support, Iran has also become a primary buyer of Venezuelan gold over the past two years.
Iran’s relationship with Venezuela is transactional. Iran receives financial benefits when it sells food or diesel to the Maduro regime in exchange for crude or gold. Venezuela receives supplies that it needs and has a difficult time obtaining due to its economic crisis and sanctions.
As a secondary benefit, Iran obtains some diplomatic leverage that it may consider using in its renewed nuclear negotiations process.
One issue that I highlight in the report and in the event is that the sanctions have had a negative unexpected result of pushing many sanctioned countries together that would otherwise have little reason to cooperate. In some ways, while sanctions are intended to economically and diplomatically isolate bad actors, by sanctioning so many countries for so many reasons, we’ve created an “Axis of the Sanctioned” that can cooperate with each other to conduct financial transactions and avoid the worst impacts of sanctions.
The role of super-facilitators is critical to the sanctions evasion process. We often treat the issue as a country-to-country issue, but individuals including Alex Saab play a critical role. Disrupting those nodes of corruption and financial transactions within the process can have an oversized impact.
The event and the book also contain great comments about Venezuela’s relationship with China, Russia, Cuba, India and Turkey. Three issues that came up in many of those contexts were
How Venezuela’s energy sector shapes its relationships
How countries may or may not play a positive role in a negotiated settlement in Venezuela and
How each country must consider how they will adapt their relationship with Venezuela in a hypothetical post-Maduro scenario.
Thanks for reading
Have a great afternoon.