Restart of Venezuela, opposition talks could lead to US sanction relief

By Mayela Armas, Matt Spetalnick and Marianna Parraga

CARACAS/WASHINGTON/HOUSTON (Reuters) -Venezuela's government and opposition plan to resume long-suspended talks on Tuesday, and Washington is ready to ease sanctions if President Nicolas Maduro commits to an internationally monitored election next year, multiple sources said on Monday.

The U.S. has long said it would lift some sanctions in exchange for democratic concessions from Maduro, but the announcement offered the first concrete schedule in nearly a year for government-opposition talks.

President Joe Biden's administration has been shifting toward increasing U.S. engagement with Caracas on issues from energy to immigration to political reform, away from former President Donald Trump's "maximum pressure" campaign.

Initial steps would involve significant but limited sanctions relief for now, possibly removing some restrictions on Venezuela's banking sector, the U.S, sources said, adding that further relaxation would depend on whether Maduro organizes fair elections that meet international standards.

The negotiations, meant to provide a way out of Venezuela's long-running political and economic crisis, will take place in Barbados. Maduro, a socialist president since 2013, is expected to run for re-election but has not yet formalized his candidacy. His government has banned prominent opposition figures from running.

Maduro's representatives and the opposition are expected to sign an election agreement on Tuesday, and the U.S. would quickly follow with authorizations related to Venezuela's oil business, two people in Washington familiar with the matter said on condition of anonymity.

Any U.S. action would come only after an agreement under which Maduro commits to a presidential election date and lifting of the bans on opposition candidates, these two sources said.

One source in Washington said initial sanctions-easing steps could be announced within hours of the Barbados signing if the U.S. is satisfied Maduro has fulfilled his commitment at this stage. Among the steps under consideration is restoring Venezuelan banks' access to the global financial system, which could facilitate further oil-related transactions, the source said.

The U.S. State Department celebrated the announcement of the return to talks but did not mention sanctions relief.

"The United States will continue its efforts to unite the international community in support of the Venezuelan-led negotiation process," it said.

It was not immediately known whether U.S. officials would be present for the talks or announcement in Barbados.

The U.S. is mindful that Maduro has failed to meet previous commitments on holding free elections and is watching closely to ensure he complies with his latest promises, sources said.

The opposition is set to hold a primary on Sunday to choose its 2024 candidate. Front-runner Maria Corina Machado is currently banned from holding public office.

Some members of the opposition said on Monday that they doubted Maduro would follow through on his promises.

Two of those sources named France's Maurel & Prom, a joint venture partner with Venezuela state-run oil company PDVSA, as a possible recipient of a U.S. "comfort letter." At the time a Maurel & Prom spokesperson confirmed that the company "made a request to this effect to U.S. authorities" but declined to elaborate.

A U.S. comfort letter would allow a partner of PDVSA to take Venezuelan oil for exports as debt repayment or establish an oil swap deal to settle pending debts and dividends.

U.S. SANCTIONS

The U.S. imposed sanctions on Venezuela to punish Maduro's government following a 2018 election that Washington considered a sham, citing lack of democratic guarantees and human rights violations. Since 2019, U.S. sanctions ban PDVSA from exporting its oil to its chosen markets.

Trump's sanctions, combined with diplomatic pressure, were intended to force Maduro's ouster. Maduro and his government have survived with support from the military plus China, Russia and Cuba.

The Biden administration has been seeking ways to increase the flow of oil to world markets to alleviate high prices caused by sanctions on Russia over its war in Ukraine and OPEC+ decisions to cut output.

But with no substantial investment in Venezuela's oil sector for over a decade, any real oil output increase will take time, according to analysts.

Biden's administration has kept most sanctions in place in an effort to force Maduro to take concrete steps toward free elections, holding out sanctions relief as an enticement and drawing criticism from opponents.

Assailing Biden's energy policies, Republican U.S. Senator John Barrasso said in a statement: "America should never beg for oil from socialist dictators or terrorists."

The return to talks between Maduro's government and the opposition was announced in a statement published by Norway, an observer. They last met in November 2022.

Another source in Washington said a document that is expected to be signed on Tuesday in Barbados would include a date for the election in the latter half of next year and allow international observers.

It would also allow participation of opposition figures who are currently barred from holding office, the source added. It remained unclear whether all opposition candidates would have their bans lifted. The opposition considers the bans unlawful.

The government and opposition last year agreed to the use of $3 billion in frozen assets for humanitarian needs, via a United Nations-run fund that is not yet operational.