From blockade to tutelage: Sovereign funds, financial hegemony and economic subordination in Venezuela

By Ana Gabriela Salazar
Published
venezuela oil statute

“With ones’ eyes to the ground, the march resumes
until the next stumble, just a few steps away.
And history repeats itself…”

Subcomandante Marcos, Instructions for falling down and getting up

Six days after the United States military aggression against the Bolivarian Republic of Venezuela that occurred in the early morning of January 3, 2026, the White House published a presidential decree entitled Protecting Venezuela's oil revenues for the good of the American and Venezuelan people.1 The new executive order seeks to ensure that revenue derived from the sale of Venezuelan oil and diluents, which are being deposited in US Treasury Department accounts or funds on behalf of the Venezuelan government and its institutions, such as the Central Bank of Venezuela and PDVSA, cannot be seized or be subject to external legal proceedings by private creditors. The arguments used to justify this has focused on three points: first, any legal action would interfere with efforts to stabilise the country; second, to curb migration and drug trafficking; and finally, to minimise potential risks associated with the use of these funds by a number of foreign actors that the US labels as malign.

While the executive order states that the so-called Foreign Government Deposit Funds are the property of the Venezuelan government, they will be guarded and managed by a board of US establishment officials. The framework established by this decree envisions the special designation of these funds by the US Secretary of the Treasury, who must comply with the disbursement or transfer instructions issued by the US Secretary of State, who in turn must consult the US Attorney General and the US Secretary of Energy. In the real terms, Trump’s board of trustees is made up of Scott Bessent, Marco Rubio, Pam Bondi, and Chris Wright; who, paradoxically, must enforce sovereign immunity against any embargo, judgment, decree, lien, execution, withholding, or other legal process concerning the funds. The novel aspect of this executive order is that it is based on international comity as “deference to foreign government actors that is not required by international law but is incorporated in domestic law,”2 It is this deference that now marks the direction of this new stage in the relationship between the US and Venezuela’s national government.

One of the most problematic elements precisely concerns the illusion of sovereignty over these funds, as it ends up having merely declarative character while the actual exercise of sovereignty over Venezuela’s resources is subrogated. While prioritising the custodial nature of possession, the retention and administration of funds shall be held pending “sovereign disposition for public, governmental, or diplomatic purposes determined by the Secretary of State, on behalf of the Government of Venezuela.”3 This leaves Venezuela’s ability to use our resources subservient to the approval of a foreign power. By establishing that the US will maintain governmental authority, the Venezuelan state sees its power to regulate and exercise economic and financial administration of the income generated by the exploitation of its subsoil wealth and minerals diminished. This income contributes to real productive investment and social investment, as stipulated in Article 311 of the Constitution of the Bolivarian Republic of Venezuela.

The mechanism

Trump’s new executive order does not establish with precision the route that funds will take within the financial system; most of the details were provided by Marco Rubio during his testimony before the Senate. The mechanism consists of submitting a monthly budget that adheres to US-established parameters, which in turn would facilitate the issuance of licences by the Office of Foreign Assets Control (OFAC) for oil and blocked entities.4 This mechanism includes an auditing process paid for by the Venezuelan state, through which the US government can verify the proper use and destination of funds through several options, such as the Export-Import Bank (the official US export credit agency). Although only about $300 million had been disimbursed by the date of the hearing, via a temporary account in Qatar, Rubio assured that the funds would remain in Treasury-blocked accounts.5

The prohibition of any legal or judicial action against Venezuelan assets and property could be considered a positive development. Before this order, companies or creditors with judgments or claims against the Venezuelan state for past expropriations could seek to seize those funds through embargoes or lawsuits in US courts. The lifting of sanctions through OFAC-issued licences can also be viewed positively and as a sign of a possible “end of the blockade,” as general licences have recently been granted to Venezuelan oil companies and the government to purchase diluents from the US.6 But the situation is much more complex.

The US’ financial hegemony is not limited to its currency dominance in international trade; it is expressed as a coercive mechanism through the application of monetary policy, secondary sanctions, blockades, asset freezes and exclusion from the SWIFT system. Once funds are in blocked accounts, their availability is subject to US Treasury authorisation and administrative measures, adjusted to US interest rates and Federal Reserve dictates. Venezuela can not directly control how these resources are spent; this would be conditioned on economic policies that the US deems legitimate. As our loss of autonomy is made evident through Washington’s decisions, we also relegate our ability to dictate our own economic policy and use our strategic resources.

Some precedents

Executive Order No.14373 significantly shapes what, in recent months, has become known as the Donroe Doctrine. This stems from the new National Security Strategy of the United States of America. However, it is important to remember that on March 8, 2015, then-President Barack Obama issued Executive Order No.13692, which categorised Venezuela as “an unusual and extraordinary threat.”7 The Obama Decree, as it is colloquially known in Venezuela, was not the first regulatory instrument issued during his second presidential term; months earlier, US Congress sanctioned the Defense of Human Rights and Civil Society in Venezuela Act, with bipartisan support.8 The decrees, OFAC designations and other legislative instruments, as well as decisions by US courts, have been applied under the principle of extraterritoriality to economically, commercially and financially blockade our country, taking advantage of the predominance of its currency and the dependence on it of our banking system.

While we could point out that for decades numerous US decrees have frozen funds and financial assets of other countries, there is one particular precedent that shares many elements with the Executive Order issued on January 9. On May 22, 2003, two months after the invasion of Iraq, George W. Bush issued EO No.13303, Protecting the Development Fund for Iraq and Certain Other Property in Which Iraq Has an Interest. Through this, the fund created from Iraqi oil revenues after the invasion came under international administration, preventing those assets from being subject to lawsuits or seizures.9 As with the recent order on Venezuelan funds, the aim is to avoid litigation by private creditors, with a group of foreign officials having the power to take the necessary measures for its implementation.

One characteristic that these types of instruments generally share is their legal basis, mostly derived from the International Emergency Economic Powers Act (IEEPA) and the National Emergencies Act (NEA), which grant the US president the power to declare emergencies related to national security and foreign policy. Another parallel is that both decrees contemplate a redistribution of resources in circumstances where the US has intervened directly and a crisis management plan is underway: in the Iraqi case, reconstruction, and in our case stabilisation, economic recovery and democratic transition. As we have seen in Iraq’s case, the White House outlines a post-incursion plan that is part of a concatenated strategy: a new legal architecture that makes possible the formation of the supervised administration of the sovereign funds of a state that, in formal terms, is independent.

A new stage of domination

We could have focused on demystifying the pretexts used by the US to advance its foreign policy; we need only recall that we have endured more than 10 years of economic, financial and commercial blockade, which has worsened the material living conditions of the Venezuelan people, triggered an unprecedented emigration process, and resulted in unimaginable losses of national income. We could also compile a list of rights and principles violated by conditioning the use and disposal of resources that should be controlled by the Venezuelan state, according to domestic legislation and sovereign decisions. International law recognises that states and their property enjoy immunity from the jurisdiction and enforcement of courts of another state. What is concerning is that officials from other countries are assuming governmental authority over sovereign immunity, which constitutes one of the nation’s inalienable rights (see Article 1 of the Constitution of the Bolivarian Republic of Venezuela).

The Venezuelan people have the right to self-determination and the right to development, on the terms that we, the Venezuelan people, decide. Given the absence of voices challenging this new instrument of coercion, and considering that the decree of US executive orders was condemned for years due to the principle of extraterritoriality with which they implemented their designs, demonstrating US interference, it is necessary to analyse what is happening to us now. What is at stake now is sovereignty, not as an abstraction but as a real and concrete exercise that impacts our present and future.

During years of economic, financial and commercial blockade against Venezuela, US imperial policy and financial hegemony attempted to suppress the exercise of sovereignty over our hydrocarbons and resources; today, however, we are witnessing a more advanced stage. We are facing tutelage, that is, the administration of the nation’s strategic resources by a foreign power, within a new framework that erodes any genuine exercise of sovereignty. Venezuela is serving as a showcase to Latin America and the rest of the world of the consolidation of a model of domination that, under the rhetoric of advancing economic stabilisation and democratic transition in the hemisphere, has in fact become more voracious and expansive.

Ana Gabriela Salazar is a Venezuelan researcher focused on human rights and migration. As a political analyst, she is a frequent contributor to opinion outlets such as Aporrea.org, where she writes about issues of sovereignty, geopolitics, and the impact of international sanctions on Venezuela.

References

Dodge, W. S. (2015). International comity in American law. Columbia Law Review, 115(8). https://columbialawreview.org/content/international-comity-in-american-law/

Export-Import Bank of the United States. https://www.exim.gov/about

Face the Nation. (2026, January). Rubio defends Trump administration's actions in Venezuela at Senate hearing: Key moments [Video]. YouTube. https://www.reuters.com/business/energy/trump-signs-order-protect-venezuelan-oil-revenue-held-us-accounts-2026-01-10/https://www.reuters.com/business/energy/trump-signs-order-protect-venezuelan-oil-revenue-held-us-accounts-2026-01-10/n-oil-revenue-held-us-account

The White House. (2026, January). Fact Sheet: President Donald J. Trump safeguards Venezuelan oil revenue for the good of the American and Venezuelan people. https://www.whitehouse.gov/fact-sheets/2026/01/fact-sheet-president-donald-j-trump-safeguards-venezuelan-oil-revenue-for-the-good-of-the-american-and-venezuelan-people/

Official Gazette of the Bolivarian Republic of Venezuela. (2009, February 19). Constitution of the Bolivarian Republic of Venezuela, No. 5,908 Extraordinary, with Amendment No. 1 approved by the sovereign people. https://www.cgr.gob.ve/assets/pdf/leyes/Constitucion.pdf

Scheyder, E. (2026, January). Trump moves to block courts from seizing Venezuelan oil revenue in US accounts. Reuters. https://www.reuters.com/business/energy/trump-signs-order-protect-venezuelan-oil-revenue-held-us-accounts-2026-01-10/

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