The executive order places U.S.-held revenues from Venezuelan oil sales beyond the reach of courts and creditors to advance U.S. security goals.
President Donald Trump signed an executive order on Jan. 9 declaring a national emergency to block courts or private creditors from seizing Venezuelan oil revenues held in U.S. Treasury accounts, saying that any legal loss of control over the funds would threaten U.S. national security and foreign policy objectives.
The order, titled “Safeguarding Venezuelan Oil Revenue for the Good of the American and Venezuelan People,” establishes a legal firewall around proceeds derived from Venezuelan oil sales that are deposited in designated Treasury accounts, known as the Foreign Government Deposit Funds.
“The preservation of the Foreign Government Deposit Funds is of the utmost importance to the United States,” Trump wrote, declaring that the risk of judicial attachment constitutes an “unusual and extraordinary threat” to U.S. national security.
The order states that the funds remain the sovereign property of Venezuela and are held by the United States in a strictly custodial capacity, not as U.S. commercial holdings or assets subject to the jurisdiction of courts that could be used to settle private claims.
Trump said the funds must be preserved to support U.S. efforts to stabilize Venezuela, curb illegal immigration and inflows of deadly drugs that kill many thousands of Americans each year, and counter foreign adversaries operating in the Western Hemisphere.
“By safeguarding these oil revenues, President Trump is promoting stability in Venezuela while advancing America First objectives: stopping illegal immigration, blocking deadly narcotics, and countering malign foreign influence,” the White House said in a fact sheet.
Under a U.S. agreement with Venezuela’s interim leaders, up to 50 million barrels of Venezuelan crude oil are to be supplied to the United States, where numerous refineries are specially equipped to refine it.
Trump said in the order that firewalling the oil sales proceeds was authorized under the 1977 International Emergency Economic Powers Act and the 1976 National Emergencies Act.
US Custody Over Venezuelan Oil Proceeds
Trump’s order targets revenues from Venezuelan natural resource sales or diluent transactions that are paid to or held by the U.S. federal government on behalf of Venezuela, including its central bank and state oil company, Petróleos de Venezuela.
By Tom Ozimek
