EXCLUSIVE U.N. could administer over $3 bln in funds to aid Venezuela – sources

WASHINGTON/CARACAS, Oct 25 (Reuters) – Venezuelan politicians are debating proposals for a fund that could release more than $3 billion to provide humanitarian aid to Venezuela through the United Nations, in a process that also involves officials from the U.S. State and Treasury, according to nine people close to the talks.

The proposals offer a potential way to revive deadlocked political dialogue in Venezuela, and come as more Venezuelans try to reach, creating clashes among US politicians over immigration.

Migrants arriving at the US-Mexico border are prompting discussions about releasing Venezuelan funds held in foreign banks that would provide needed food and medicine, the sources told Reuters. The sources were not authorized to comment publicly on the matter.

According to the National Survey of Living Conditions (ENCOVI), conducted by Venezuelan universities, 94% of Venezuelans lived in poverty last year, while over half experienced moderate to severe food insecurity.

Some analysts and rights groups have said that US and Western sanctions have exacerbated the country’s deep economic crisis.

In 2019, the United States under former President Donald Trump and other Western countries imposed sanctions on Venezuela to block President Nicolas Maduro’s government from accessing oil revenues, freezing billions of dollars in Venezuelan government-owned accounts abroad.

Washington and some European allies see the move to release the funds as crucial to securing a “social agreement” between Venezuela’s government and its political opposition, the sources said.

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The US Departments of State and Treasury and Venezuela’s Ministry of Information did not respond to requests for comment.

The UN continues to call on Venezuela and the opposition to engage in “an inclusive and meaningful dialogue leading to negotiated solutions, with human rights as a central component,” spokesman Stephane Dujarric said. He did not comment on whether the UN has agreed to manage an aid program.

“Resource mobilization remains a key challenge,” he said, adding that the 2022-2023 aid plans are 16.5% funded and the UN is calling for support.

US National Security Council spokeswoman Adrienne Watson told Reuters that any discussion about providing humanitarian aid to Venezuelans is led by Venezuelans. “We are prepared, in accordance with US law, to calibrate our sanctions policy on the basis of a Venezuelan-led process.”

President Joe Biden’s administration has said any easing of sanctions against Venezuela will come only after Maduro makes concrete efforts to restore democracy.

HUNT FOR MONEY

A UN-administered fund was first proposed by Maduro in 2020, when he called for a “legally binding international instrument for development” to overcome poverty and inequality. Later, he unsuccessfully tried to release funds around the globe.

Maduro’s calls did not prompt action amid Trump’s “maximum pressure” strategy to oust him.

Washington has provided $1.94 billion in humanitarian aid to Venezuela and nations that have protected Venezuelans since 2017, but the money has done little to stem migration with more than 6 million Venezuelans fleeing the country.

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The new fund could face opposition from some hardliners in the US Congress who support continued pressure on Maduro. It also has some in Venezuela’s opposition parties worried about the political impact of releasing funds that Maduro can claim credit for ahead of a potential 2024 presidential election.

The Department of Homeland Security now only allows entry from Venezuela or a third country for applicants with family members who are legal residents of the United States.

U.S. officials have argued that the aid fund could keep Venezuelans from fleeing by improving living conditions through better access to food, medicine and health care and funding infrastructure projects to repair Venezuela’s unstable power grid, the sources said.

The United Nations drafted a first proposal to oversee the fund in mid-October, the sources told Reuters. US officials and opposition leaders have since turned to international development banks, think tanks and experts to study proposals.

The launch date and many details are still uncertain. But the fund could be made public as envoys from Maduro and the opposition make progress in Mexico toward the presidential election, two of the people said.

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Opposition envoys discussed the aid package with US officials during their meetings last week in Washington, four of the sources said. U.S. officials also approached Maduro’s government about the issue, according to two others.

The possibility of Venezuelan money once again flowing into imports and investments is attracting attention from creditors and holders of Venezuelan debt.

Organizations including the Inter-American Development Bank and the Development Bank of Latin America, which have helped manage funds or contributed to important aid projects in other nations, are among Venezuela’s creditors. There are billions of dollars in loans and lines of credit that have not been paid.

For the UN, it could become one of the largest funds ever handled, although the total amount that can legally be released is not clear.

By Marianna Parraga and Matt Spetalnick in Washington and Mayela Armas in Caracas; Additional reporting by Michelle Nichols, Daphne Psaledakis and Humeyra Pamuk; Editing by Gary McWilliams, Aurora Ellis and Lincoln Feast

Our standards: Thomson Reuters Trust Principles.

Marianna Parraga

Thomson Reuters

Focused on energy-related sanctions, corruption and money laundering with 20 years of experience in Latin America’s oil and gas industry. Born in Venezuela and based in Houston, she is the author of the book “Oro Rojo” about Venezuela’s troubled state-run company PDVSA and a mother of three boys.

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