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VENEZUELA’S CRISIS:

IMPLICATIONS FOR THE REGION

HEARING

BEFORE THE

SUBCOMMITTEE ON 

THE WESTERN HEMISPHERE

OF THE

COMMITTEE ON FOREIGN AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED FOURTEENTH CONGRESS

SECOND SESSION

JUNE 22, 2016

Serial No. 114–206

Printed for the use of the Committee on Foreign Affairs

(

Available via the World Wide Web: http://www.foreignaffairs.house.gov/ or

http://www.gpo.gov/fdsys/

(II)

COMMITTEE ON FOREIGN AFFAIRS 

EDWARD R. ROYCE, California, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

DANA ROHRABACHER, California 

STEVE CHABOT, Ohio 

JOE WILSON, South Carolina 

MICHAEL T. MCCAUL, Texas 

TED POE, Texas 

MATT SALMON, Arizona 

DARRELL E. ISSA, California 

TOM MARINO, Pennsylvania 

JEFF DUNCAN, South Carolina 

MO BROOKS, Alabama 

PAUL COOK, California 

RANDY K. WEBER SR., Texas 

SCOTT PERRY, Pennsylvania 

RON DESANTIS, Florida 

MARK MEADOWS, North Carolina 

TED S. YOHO, Florida 

CURT CLAWSON, Florida 

SCOTT DESJARLAIS, Tennessee 

REID J. RIBBLE, Wisconsin 

DAVID A. TROTT, Michigan 

LEE M. ZELDIN, New York 

DANIEL DONOVAN, New York 

ELIOT L. ENGEL, New York 

BRAD SHERMAN, California 

GREGORY W. MEEKS, New York 

ALBIO SIRES, New Jersey 

GERALD E. CONNOLLY, Virginia 

THEODORE E. DEUTCH, Florida 

BRIAN HIGGINS, New York 

KAREN BASS, California 

WILLIAM KEATING, Massachusetts 

DAVID CICILLINE, Rhode Island 

ALAN GRAYSON, Florida 

AMI BERA, California 

ALAN S. LOWENTHAL, California 

GRACE MENG, New York 

LOIS FRANKEL, Florida 

TULSI GABBARD, Hawaii 

JOAQUIN CASTRO, Texas 

ROBIN L. KELLY, Illinois 

BRENDAN F. BOYLE, Pennsylvania

AMY PORTER, Chief of Staff THOMAS SHEEHY, Staff Director

JASON STEINBAUM, Democratic Staff Director 

SUBCOMMITTEE ON THE WESTERN HEMISPHERE

JEFF DUNCAN, South Carolina, Chairman 

CHRISTOPHER H. SMITH, New Jersey 

ILEANA ROS-LEHTINEN, Florida 

MICHAEL T. MCCAUL, Texas 

MATT SALMON, Arizona 

RON DESANTIS, Florida 

TED S. YOHO, Florida 

DANIEL DONOVAN, New York 

ALBIO SIRES, New Jersey 

JOAQUIN CASTRO, Texas 

ROBIN L. KELLY, Illinois 

GREGORY W. MEEKS, New York 

ALAN GRAYSON, Florida 

ALAN S. LOWENTHAL, California 

(III)

C O N T E N T S 

Page

WITNESSES 

The Honorable Michael Kozak, Deputy Assistant Secretary, Bureau of Democracy, Human Rights, and Labor, U.S. Department of State ............................ 5

Ms. Annie Pforzheimer, Acting Deputy Assistant Secretary, Bureau of Western Hemisphere Affairs, U.S. Department of State .......................................... 11

Mr. John Smith, Acting Director, Office of Foreign Assets Control, U.S. Department of the Treasury .................................................................................... 19

Mr. John Andersen, Deputy Assistant Secretary for the Western Hemisphere, 

U.S. Department of Commerce ........................................................................... 23

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

The Honorable Michael Kozak: Prepared statement ............................................ 7

Ms. Annie Pforzheimer: Prepared statement ........................................................ 13

Mr. John Smith: Prepared statement .................................................................... 21

Mr. John Andersen: Prepared statement .............................................................. 25

APPENDIX 

Hearing notice .......................................................................................................... 48

Hearing minutes ...................................................................................................... 49

The Honorable Ileana Ros-Lehtinen, a Representative in Congress from the 

State of Florida: Material submitted for the record .......................................... 50

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VENEZUELA’S CRISIS:

IMPLICATIONS FOR THE REGION 

WEDNESDAY, JUNE 22, 2016

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON THE WESTERN HEMISPHERE,

COMMITTEE ON FOREIGN AFFAIRS,

Washington, DC. 

The committee met, pursuant to notice, at 1 o’clock p.m., in room 

2172 Rayburn House Office Building, Hon. Jeff Duncan (chairman 

of the subcommittee) presiding. 

Mr. DUNCAN. A quorum being present, the subcommittee will 

come to order. I would now like to recognize myself for an opening 

statement. 

Venezuela—today we begin to examine the deteriorating situation in Venezuela which has regressed into a severe economic, political and human rights crisis. 

This hearing follows the subcommittee’s field hearing in Miami 

last November on human rights abuses in Venezuela and Cuba 

when we heard testimony from victims of abuse at the hands of 

Maduro and the Castro government. 

Our purpose in meeting today is to understand the situation in 

Venezuela and the impact on U.S. businesses operating in the 

country and the Obama administration’s policies and actions on 

this issue both within the OAS, or Organization of American 

States, and the region at large. 

Since the founding of our country the United States has supported freedom for all people around the world and I want the people of Venezuela to know that United States stands with you right 

now. 

You are the ones who are suffering the most from this crisis and 

I applaud your courage to pursue freedom, justice and democracy 

through the constitutional channels which you have. 

The situation in Venezuela today is truly heartbreaking. Despite 

possessing rich natural resources and the largest oil reserves in the 

world, Venezuela is going through an extremely severe economic 

crisis. 

Last year, Venezuela’s economy contracted 7 percent and today 

multiple economic forecasts are projecting that the country will default on both sovereign debt and the debt of the state-owned oil 

company PDVSA. 

In fact, according to Venezuela’s Central Bank data, its external debt is estimated to be $185 billion. To put that in perspective, Argentina’s 2001 default was a little over $100 billion. 

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This year, Venezuela’s economy is projecting a negative 8 percent 

growth, an inflation of 720 percent. Right now, 76 percent of the 

population is unemployed and last month Venezuela saw its largest 

monthly oil production decline, according to OPEC. 

Today, there are widespread shortages of energy, food and medicine. The Maduro government has been rationing electricity, recently ordering a 5-day weekend for the public sector to save electricity. 

Food shortages affect 80 percent of the population, which wait an 

average of 4 hours in line to obtain basic foodstuffs. 

Nine out of ten homes do not eat three meals a day. This situation has led to more than 50 food riots and deaths of at least five 

people. 

In response, the government launched a program to distribute 

goods door to door. But this program has essentially amounted to 

government control over who eats and who doesn’t in Venezuela. 

When Venezuelans visit hospitals, medicine is missing 80 percent 

of the time. Sadly, this is affecting the most vulnerable. Infant 

mortality has increased 100 times since 2012 largely because hospitals cannot operate incubators where there is no power. 

Venezuela also reported over 400,000 cases of the Zika virus, but 

the government has done very little to respond. The crisis has extended to other aspects of social and political life in Venezuela. 

The people have not been silent. Spontaneous social unrest, multiple lootings, violence and widespread protests even in traditional 

Chavista strongholds are occurring daily. The Observatory of Social 

Conflict, a local NGO, found that there were 52 lootings and 641 

protests just last month, which is a 37 percent increase compared 

to the same time last year. 

Large groups of armed criminal gangs also control vast swaths 

of territory in urban areas, terrorizing populations and leading one 

of the highest murder rates in the world. 

Not only has the government failed to respond well, it has also 

committed widespread human rights abuses and undermined democracy in the country. 

This horrific crisis in Venezuela has led to a surge in the number 

of Venezuelans seeking asylum in the United States and I am concerned about the migration implications for the region at large. 

In February 2014, anti-government protests throughout the country sparked brutality from security forces. The Maduro government 

violated and suppressed the protests, killing at least 43 people, injuring 800 more and arresting 300 others. 

Today, the government has imprisoned over 4,000 people for political purposes and there are also at least 93 political prisoners in 

Venezuela including oppositional leader Leopoldo Lopez. 

Only a few weeks ago the national police fired tear gas on 

protestors who were chanting, ‘‘We want food.’’ In response to these 

events and the Venezuelan government’s support for terrorism, the 

U.S. imposed sanctions, visa restrictions or assets freezes on a few 

Venezuelan companies for supporting Iran, two Venezuelan individuals for supporting Hezbollah, several Venezuelans for drug 

trafficking, and 62 Venezuelan individuals for corruption and 

human rights abuses. 

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Recently, the Obama administration imposed sanctions on seven 

Venezuelan individuals for human rights abuses. However, the 

Obama administration could do much, much more. 

Today, many government officials in Venezuela who are directly 

responsible for human rights abuses, the deterioration of democratic institutions, public corruption, and drug trafficking remain 

free to access U.S. financial systems. 

This is not right. And in view of the especially horrendous situation in Venezuela right now, the Obama administration should be 

doing more to resolve the humanitarian crisis, support a democratic outcome and ensure that those responsible for committing 

human rights abuses and subverting democratic institutions no 

longer receive access to the U.S. financial system, at the very least. 

Last week, Secretary Kerry announced that the United States 

and Venezuela would launch high-level diplomatic talks and that 

U.S. would lead talks between the Maduro government and the opposition. 

This week, Ambassador Thomas Shannon is in Venezuela for 

these talks. In ambiguous and confusing language, the Obama administration is supporting dialogue efforts, the OAS secretary general’s efforts to invoke democratic charter, and the recall referendum in Venezuela. 

Yet, the Obama administration has simultaneously rewarded 

President Maduro with diplomatic talks and affirmed publicly that 

the U.S. does not support suspending Venezuela from the OAS. 

I want to note that after Secretary Kerry’s announcement last 

week Venezuela’s national guard brazenly arrested two opposition 

activists, Francisco Marquez and Gabriel San Miguel over the 

weekend. Both remain detained and have been denied access to 

legal counsel. 

Marquez is a U.S. citizen. These men should be released immediately, as should all political prisoners at the very least, before 

Ambassador Shannon meets with President Maduro this week. 

The United States sent conflicting messages to the world about 

Venezuela that do not make sense. The Maduro government controls the presidency, a majority of municipalities, the supreme 

court, the military leadership and PDVSA leadership, not to mention most of the media. Only the National Assembly is controlled 

by an opposition and it has been undermined time and again by 

Maduro’s supreme court. 

Democracy is failing in Venezuela, and Venezuela does not have 

time to waste. So far, only OAS Secretary General Almagro has 

stood firm on these points. 

The administration should have greater courage of conviction to 

send a clear U.S. message—release all the political prisoners, accept humanitarian aid, hold a recall referendum this year, and submit to the Venezuelan people’s wishes to resolve this crisis. 

So I look forward to hearing from our witnesses today about 

these issues and I will now turn to the ranking member from New 

Jersey, Mr. Sires, for his opening remarks. 

Mr. SIRES. Thank you, Mr. Chairman, for holding this hearing 

and thank you to our witnesses from the State Department, Treasury Department, the Department of Commerce for being here to 

discuss the Venezuela crisis and its implications for the Americas. 

4

Under the administration of President Nicolas Maduro, the political, social and economic situation in Venezuela has deteriorated to 

a very dangerous and destabilizing level. 

Widespread corruption, political harassment and economic crisis 

have caused a number of Venezuelans seeking asylum in the 

United States to soar. In March of this year, the number of Venezuelan asylum seekers was second only to China nationals in submitting asylum requests to the United States. 

With over 1,300 Venezuelans’ applications submitted, the current 

political and economic chaos is also destroying Venezuela’s once-improving education system. The education professionals are fleeing 

the country, leaving many of Venezuela’s 7 million public students 

without qualified teachers and depriving these young people of the 

opportunity to better lives through education. 

Venezuela’s health system has also been subject to severe budget 

cuts with hospitals lacking everything from basic supplies and 

medication to being unable to provide life-saving cancer treatments. 

These cuts are occurring just as Venezuela is facing one of the 

worst outbreaks of Zika in South America. Food shortages have led 

to riots, protests and looting around the country that have resulted 

in the death of several people shot by police and security officials. 

In response to these challenges, Maduro and his cronies have 

used intimidation and strong-arm tactics to suppress political opponents instead of working to provide basic necessities like food and 

medicine to the Venezuelan people. 

In 2014, the government violently suppressed political protests, 

resulting in the death of at least 43 people. In the aftermath of December 2015, legislative elections that brought the opposition, 

Democratic Unity Roundtable party, to power, Maduro has done everything he can to thwart the power of the National Assembly, 

most notably by jailing opposition leader Leopoldo Lopez and using 

Venezuela’s supreme court to block any of the laws approved by the 

legislative since he took office in January. 

Fed up with Maduro’s oppressive tactics and lack of response to 

the suffering and the starvation of the Venezuelan people, opposition efforts are now focused on recalling President Maduro in a national referendum. 

The National Electoral Council finally released forms needed to 

bring the process of seeking a recall referendum but only after several opposition National Assembly legislators chained themselves 

to the Electoral Council’s office to protest the body’s refusal to provide the paperwork. 

As we call can see, the challenges in Venezuela are rapidly increasing and, unfortunately, Maduro’s actions are only hurting the 

lives of innocent Venezuelan people. 

I look forward to hearing from our witnesses, their views on the 

crisis and hear what real options the U.S. has to help steer Venezuela away from its path of destruction and bring peace to its people. 

Thank you. 

Mr. DUNCAN. I thank the ranking member and other members, 

and put written statements in the record. Witnesses, I am glad you 

are here today. I look forward to this hearing. 

5

You each will be given 5 minutes. There is a lighting system in 

front of you. When it is approaching red—it will turn yellow and 

then red. When it gets around red let us try to wrap it up. 

If you hear a slight tapping of the gavel that means wrap it up 

there so we can move on. We are on a tight time crunch here with 

the ranking member and I would love to get to as much as we can. 

So let us just jump right into Venezuela. Ambassador Kozak, you 

are recognized for 5 minutes. 

STATEMENT OF THE HONORABLE MICHAEL KOZAK, DEPUTY 

ASSISTANT SECRETARY, BUREAU OF DEMOCRACY, HUMAN 

RIGHTS, AND LABOR, U.S. DEPARTMENT OF STATE 

Mr. KOZAK. Thank you, Mr. Chairman. 

Mr. Chairman, Ranking Member Sires and members of the committee, we thank you for holding this timely hearing focused on the 

crisis in Venezuela, which you both very well described in your 

opening statements. 

We are increasingly concerned about the deteriorating human 

rights climate in Venezuela and we are encouraging Venezuelan 

civil society to continue to defend human rights and fundamental 

freedoms despite the significant challenges it faces. 

As you mentioned, the opposition won a two-thirds super majority in the National Assembly on December 6, 2015. The assembly 

legislated an amnesty and national reconciliation bill that would 

have provided mechanisms for the release of political prisoners including Leopoldo Lopez. 

But President Maduro’s United Socialist Party used the executive and political judicial branches of the government to block all 

legislation and to reduce the National Assembly’s authorities to essentially nothing. 

According to this scheme, the Venezuelan supreme court declared 

the amnesty and national reconciliation bill unconstitutional. Let 

me state here once again our view that the government should release immediately all those imprisoned for their political beliefs. 

The crisis cannot be solved with the democratic political leaders 

jailed for their political beliefs. 

The crisis in Venezuela is self-induced by the Maduro administration. The economic crisis results from years of bad economic decisions. The political crisis is the product of centralization of power. 

President Maduro’s party has disregarded the rule of law and 

basic tenets of democracy. It has also disregarded international 

commitments to protect human rights and fundamental freedoms. 

President Maduro declared a full state of emergency to expand 

his powers and restrict freedom of assembly. In recent weeks, national guard soldiers and police in riot gear have blocked roads 

throughout the country and metro stations near the national electoral council offices. 

President Maduro and his party have politicized the judiciary. 

Judge Maria Lourdes Afiuni was charged with corruption and 

abuse of authority after not convicting a prisoner on politicized 

charges—in other words, for doing her job. 

She was arrested, jailed, and brutally treated 6 years ago. Thirteen hearings have been held since then. No evidence has ever 

6

been adduced that she committed any crime. She had never been 

convicted or sentenced. 

Nevertheless, she continues to be subjected to what they call conditional release. This restricts her movement and ability to talk to 

the media or use social media, even though the law in Venezuela 

states that such measures may not last more than 2 years. 

There is substantial evidence of the systematic scheme of the 

government to torture that involves judges, prosecutors and jailers. 

Venezuelan NGO Foro Penal counts 81 political prisoners behind 

bars. Twenty-six of them are in deteriorating health. 

On September 10, 2015, Judge Susanna Barreiros found 

Leopoldo Lopez, the leader of the opposition party Popular Will, 

guilty on counts of public incitement, damage to property, fire damage and association for conspiracy related to the February 2014 

protest. 

This was supposedly for transmitting subliminally messages to 

the crowd. The judge issued a sentence of 13 years and 9 months 

in prison, almost the maximum allowed by law. The 14-month trial 

was marked by lack of due process and shows abuse of the judicial 

system to punish government critics. 

The judge accepted more than 100 witnesses for the prosecution. 

She rejected all but two for the defense. She deliberated less than 

1 hour before announcing her decision to convict. 

So we call once again for the immediate release of Leopoldo 

Lopez and all the other political prisoners. 

The ability of the press to publish freely and for Venezuelans to 

speak their minds has crumbled in the face of government actions. 

President Maduro’s administration has used a potent combination of politicized libel laws, media content regulations, legal harassment and physical intimidation to silence independent media. 

The ruling party uses force and arbitrarily detains protestors 

who peacefully assemble to express their views, controls media outlets, deprives newspapers of newsprint needed to inform the public 

and prosecutes journalists and editors. 

I am going to skip a little bit to compress this, Mr. Chairman, 

and if I can submit the whole thing for the record, if that is useful. 

I thought I would shift now to talking about what we have been 

trying to do about this. 

Mr. DUNCAN. Okay. Your time is starting to expire, sir. Hurry. 

Mr. KOZAK. I will then submit the rest for the record, sir. 

Thank you. 

[The prepared statement of Mr. Kozak follows:]

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Mr. DUNCAN. Ms. Pforzheimer. Is that right, Pforzheimer? Okay. 

You are recognized for 5 minutes. 

STATEMENT OF MS. ANNIE PFORZHEIMER, ACTING DEPUTY 

ASSISTANT SECRETARY, BUREAU OF WESTERN HEMISPHERE AFFAIRS, U.S. DEPARTMENT OF STATE 

Ms. PFORZHEIMER. Thank you very much. 

Chairman Duncan, Ranking Member Sires, members of the committee, thank you for inviting me to participate in today’s hearing 

on Venezuela. I appreciate your interest in Venezuela and your 

support for U.S. assistance in our policies there. 

We share Congress’ deep concerns about the situation in Venezuela including the worsening shortages in food and medicine. 

We are troubled by credible and independent reports of 85 percent of the medicines on the World Health Organization’s list of essential medicines are not available at pharmacies and hospitals 

while many others are scarce. 

The International Monetary Fund predicts the macroeconomic 

picture will continue to worsen with estimates of 700 percent inflation and GDP contraction of over 8 percent this year. 

These dire conditions are a direct result of the Venezuelan government’s economic mismanagement and misguided policy decisions. A sustainable remedy can only come about through meaningful dialogue including between the executive branch and the legislature. 

However, since January we have witnessed instead how the executive and judicial branches have stripped away and undermined 

the National Assembly’s constitutionally guaranteed responsibilities. These actions have eroded the separation of powers enshrined 

in the Venezuelan constitution. 

For example, the legislature’s authority to call ministers to hearings similar to this one to ask their executive branch to explain its 

decisions was blocked by President Maduro on May 2nd. 

We remain deeply concerned about these efforts. The State Department has taken steps to impose visa restrictions on more than 

60 individuals believed to be responsible for, complicity in undermining democratic governance, engaging corruption or committing 

human rights abuses. 

Certain family members of such individuals can be affected by 

these actions. We will continue to evaluate further actions against 

those who undermine democratic governance and the rule of law, 

commit human rights abuses and line their pockets with public 

moneys. 

At the OAS General Assembly in Santo Domingo last week, Secretary Kerry expressed our commitment to working with all OAS 

members states to remedy the deeply troubling situation in Venezuela. 

He emphasized the need for dialogue and renewed calls for the 

Venezuelan government to release political prisoners, respect freedom of expression at assembly, alleviate shortages of food and medicine and to honor constitutional mechanisms including a fair and 

timely recall referendum. 

On June 15th in Santo Domingo, 15 foreign ministers signed a 

statement of strong support for the efforts of former Spanish Prime 

12

Minister Zapatero, former Dominican President Fernandez and 

former Panamanian President Torrijos to promote an inclusive political dialogue and the fair and timely implementation of constitutional mechanisms. 

This week, the OAS is continuing its focus on Venezuela’s situation in the framework of the Inter-American Democratic Charter. 

The region must work collectively and demonstrate the leadership necessary to address the erosion of democratic institutions in 

Venezuela. 

As Ambassador Kozak said, we continue to call on the Venezuelan government to release those who have been in prison solely 

for their political beliefs. Rather than intimidating or imprisoning 

its critics, we believe the Venezuelan government should focus on 

finding real solutions through dialogue. 

The Venezuelan constitution guarantees the citizens of Venezuela the right to pursue a recall referendum if they so choose. We 

have seen some very slow progress by the National Electoral Council to allow a recall referendum to move to its next step. 

As we heard today, the council is scheduled to validate signatures of those expressing support for a recall referendum. This important process offers an opportunity for the Venezuelan people to 

express their political will in a constitutional, peaceful, and democratic manner. 

We favor Venezuelan solutions to Venezuelan problems with the 

support of the region. We are prepared to continue to use all appropriate tools in our toolkit and we will continue to call attention to 

all actions that undermine democratic principles. 

We did just that at the OAS General Assembly and we will continue to do so at the OAS permanent council meetings including 

the one yesterday and the one that is scheduled tomorrow. 

We will continue to work closely with Congress and others in the 

region to support greater political expression in Venezuela and encourage the Venezuelan government to comply with its human 

rights obligations and live up to its commitment to democracy. 

Mr. Chairman, I would like to end by saying that we sincerely 

appreciate the House Committee on Foreign Affairs’ contribution to 

the promotion and protection of human rights in Venezuela, the 

strong and bipartisan cooperation among this committee’s members 

and staff to support the U.S. Government championing of democracy and human rights in our hemisphere including the right to 

freedom of expression is a great credit to our country. 

Thank you, and I look forward to answering your questions. 

[The prepared statement of Ms. Pforzheimer follows:]

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Mr. DUNCAN. Thank you so much. 

Mr. Smith, you are recognized for 5 minutes. 

STATEMENT OF MR. JOHN SMITH, ACTING DIRECTOR, OFFICE 

OF FOREIGN ASSETS CONTROL, U.S. DEPARTMENT OF THE 

TREASURY 

Mr. SMITH. Thank you, Mr. Chairman. 

Chairman Duncan, Ranking Member Sires, members of the committee, thank you for inviting me to appear before you today to discuss conditions in Venezuela, particularly as they pertain to regional stability and U.S. interests. 

As acting director of the Treasury Department’s Office of Foreign 

Assets Control, I will address the administration’s implementation 

of sanctions measures as mandated by the Venezuelan Defense of 

Human Rights and Civil Society Act of 2014 and implemented by 

Executive Order 13692. 

As the committee may recall, the sanctions implemented by the 

Executive order stem from the government of Venezuela’s human 

rights abuses, persecution of political opponents, curtailment of 

press freedoms and the exacerbating presences of significant public 

corruption in Venezuela in 2014. 

The following year, after signing the legislation passed by this 

body, President Obama issued Executive Order 13692 sanctioning 

seven individuals associated with various organs of the Venezuelan 

government by blocking their property and interests in property 

that are come within the United States or within the possession or 

control of U.S. persons. 

Individuals who meet the criteria for economic sanctions are also 

subject to visa restrictions. In addition to blocking criteria targeting the activity mentioned above, the Executive order includes 

several status-based blocking criteria. 

Current and former Venezuelan government officials, for example, are subject to sanctions upon identification by the secretary of 

the treasury in consultation with the secretary of state. 

Similar mechanisms have complemented our conduct-based authorities in other programs and fit well in the fluid Venezuelan 

context. Our Venezuelan sanctions target only the individuals we 

have designated under the Executive order and not the people of 

Venezuela as a whole. 

This deliberate approach reflects a desire to make the best possible use of the targeting authority provided under the Executive 

order. That authority is not exclusively focused on the human 

rights abuses that took place in 2014 but encompasses other serious human rights abuses, significant acts of violence and actions 

that prohibit, limit or penalize the exercise of freedoms of expression and peaceful assembly in Venezuela. 

The resulting flexibility to respond to repression in real time is 

crucial, both as a symbolic deterrent and as a practical matter if 

circumstances require swift action. 

The targeted measures currently in place are tailored to specifically pressure bad actors and demonstrate two key points. The first 

is that the United States is working to see democracy and human 

rights protected and preserved in Venezuela. 

20

The second is that neighbors—as neighbors who care deeply 

about the Venezuelan people, we are concerned about the country’s 

current economic situation and have no desire to exacerbate it. 

That is why our sanctions target neither the Venezuelan people 

nor their government as a whole. What we do not want is for those 

who would threaten and undermine democracy in their home country to be able to use the U.S. financial system of advance their nefarious purposes. 

We continue to monitor the situation in Venezuela closely and 

work with our colleagues across the interagency including in the 

Departments of State and Commerce to evaluate policy options in 

line with U.S. foreign policy objectives and national security interests. 

The United States remains deeply concerned about the situation 

in Venezuela. This March, President Obama reinforced our ability 

to combat political repression and public corruption in Venezuela 

when he renewed the national emergency and corresponding sanctions implemented under Executive Order 13692. 

For our part, we in the Office of Foreign Assets Control stand 

ready to act with the powerful tools available to us if and when 

conditions call for it and action would be consistent with U.S. efforts to coordinate with regional governments to address the situation in Venezuela. 

Thank you, and I am happy to answer any questions. 

[The prepared statement of Mr. Smith follows:]

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Mr. DUNCAN. Thank you. These two names are easier than the 

first two. Mr. Andersen, you are recognized for 5 minutes. 

STATEMENT OF MR. JOHN ANDERSEN, DEPUTY ASSISTANT 

SECRETARY FOR THE WESTERN HEMISPHERE, U.S. DEPARTMENT OF COMMERCE 

Mr. ANDERSEN. Thank you very much, Mr. Chairman. 

Chairman Duncan, Ranking Member Sires and members of the 

committee, thank you for the opportunity to speak to you today 

about the ongoing crisis in Venezuela and its impact on our commercial relationship. 

The Department of Commerce’s International Trade Administration is one of the primary agencies responsible for strengthening 

the competitiveness of U.S. industry in the global marketplace, promoting U.S. exports, monitoring compliance with U.S. trade agreements and enforcing U.S. trade laws. 

ITA’s efforts are driven by the needs of our primary constituency—the U.S. business community. For more than 15 years Venezuela’s anti-market orientation has complicated our commercial 

relations, making it harder for U.S. companies to do business in 

Venezuela. 

We have advised our clients to be mindful of the considerable 

challenges they will encounter when assessing the Venezuelan 

market. 

On January 1, 2012, the Commerce Department closed its commercial office in Caracas in recognition that an active export promotion program in such a difficult market was no longer cost effective. 

Under the last President Hugo Chavez, the government nationalized domestic and foreign-owned private enterprises, undermined 

private property rights and violated contractual agreements. 

Under his successor, Mr. Maduro, the government has continued 

to threaten the private sector by accusing companies of price gauging and hoarding products, warning of additional government seizures in the face of these baseless accusations. 

Dependence on oil exports, which provide 95 percent of Venezuela’s foreign exchange earnings, had long masked the damaging 

effects of Venezuela’s command control of the economy and its protectionist anti-competitive policies. 

Given the decline in oil prices, it is not surprising that the IMF 

estimates that Venezuela’s economy is likely to contract by 8 percent this year and that inflation could reach a staggering 720 percent. 

Let me spend a few moments putting Venezuela into a broader 

regional perspective. Since the global financial crisis, we have seen 

a growing bifurcation in the Western Hemisphere between nations 

that adopted market-friendly economic policies and those that have 

chosen a different path. 

The nations that have chosen the former are continuing to enjoy 

economic growth despite a difficult global economic environment. In 

Latin America, this trend is best exemplified by the Pacific Alliance, which was established in 2012 by Chile, Colombia, Mexico 

and Peru. 

24

The Pacific Alliance shares our vision that being open to world 

trade is more advantageous if combined with the creation of a 

deeper regional market to take better advantage of economies of 

scale. 

All four Pacific Alliance countries are projected to experience economic growth in 2016 as well as year over year growth through 

2018. Not coincidentally, those four countries are also U.S. FTA 

partners. 

Those nations that have chosen the latter path, with Venezuela 

as the extreme example, are experiencing economic decline. For example, Ecuador’s economy is projected to contract by 4.5 percent 

this year and Argentina’s, due to the previous government’s economic policies, is projected to contract by 1 percent. 

In short, the countries in our hemisphere that share an economic 

vision similar to our own, our FTA partners, including those that 

are part of the Pacific Alliance, or the Trans-Pacific Partnership—

TPP—are faring much better and are poised to enjoy greater economic success than those that chose a different path. 

When you compare the results of our vision of open economies 

that engage with the world by establishing common rules, standards and values, it is looking bright. We continue to work with 

countries in the hemisphere to create a shared agenda for growth. 

This is why the Obama administration is working with Congress, 

the business community and other stakeholders to raise awareness 

about the benefits of the TPP. Despite its name, five of the 12 TPP 

partners are in his hemisphere. 

TPP will help solidify our vision for mutually inclusive hemispheric growth by raising standards across the region in a manner 

that reflects our core values, strong labor protections, a cleaner environment, enhanced intellectual property rights and many more. 

TPP’s commitments to facilitating trade will in particular help 

SME’s interglobal markets, which brings me back to Venezuela. 

None of us can predict how this current crisis will end. 

Despite the severity of the economic and political turmoil and the 

very real human suffering that accompanies it, there is potential 

that positive change can come for the people of Venezuela. 

We at Commerce will be prepared to help U.S. companies be a 

part of this change. 

Thank you. 

[The prepared statement of Mr. Andersen follows:]

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Mr. DUNCAN. Thank you. 

Let the record show this is a very well attended hearing. How 

many people in the audience are with staff or are staff members 

from one of the panelists? Just raise your hand. 

The reason I ask that I had a homeland security hearing one 

time and the room was packed. Well, I had two panels. When panel 

one got up to leave, everybody in the room left. They were all staffers. 

The reason I say that is I am pleased that the room is full with 

folks that are interested in the issue of Venezuela and that you are 

not just here as a congressional staffer or a staffer of the panelists—that you truly are interested in the plight of the Venezuelan 

people, the possible changes in the Venezuelan government and 

what it may—the kind of impact I may have on the region. So I 

appreciate you participating with that. 

Let us jump right in. Ms. Pforzheimer, why is the administration 

pursuing high-level diplomatic talks with the Maduro government 

when the Maduro government has such a blatant record of controlling all facets of the government with the exception of the legislature now? 

They commit gross human rights abuses. They stifle the rule of 

law and freedom of the press. I thought Mr. Andersen’s comments 

were great there. Why would we reward such a government with 

high-level diplomatic talks—the highest level with the exception to 

executive? 

This is Secretary Kerry and now the Ambassador. So why are we 

rewarding the Maduro government when they continue the abuses 

on the Venezuelan people? 

Ms. PFORZHEIMER. Sir, thank you for your question. 

As you noted, Under Secretary Tom Shannon is in Caracas 

today. His meetings are with an extremely broad range of Venezuelans. He is having a human rights roundtable. He is talking 

to members of the legislature, members of the opposition and he is 

speaking with the government. 

We would not perhaps characterize it as a reward in that he will 

be raising very strong concerns with the government and Secretary 

Kerry raised such concerns with Foreign Minister Rodriguez. 

We said to them directly that political prisoners need to be released, that the legislative assembly needs——

Mr. DUNCAN. Secretary Kerry has said that to the Maduro government? 

Ms. PFORZHEIMER. Yes, sir. 

Mr. DUNCAN. Let us contrast this real quick. Wouldn’t you say 

America is known as a champion against human rights abuses in 

general? 

Ms. PFORZHEIMER. Yes, sir. 

Mr. DUNCAN. So Secretary Kerry tells the Maduro government 

you need to release the political prisoners. We negotiated with Iran 

for almost 2 years without ever making that precondition. 

We just normalized relations with Cuba without making that 

precondition. I am glad he is doing it but we need to juxtapose 

those policies with Iran and with Cuba. There is a little bit of difference between the administration’s actions here. 

So I am glad he did that and I will let you continue. 

30

Ms. PFORZHEIMER. Thank you, sir. 

He also raised that, of course, during the public session at the 

Organization of American States and Under Secretary Shannon is 

raising our concerns directly with President Maduro and his government. 

Mr. DUNCAN. I am glad he is doing that. I think it is important. 

Before we go in and negotiate the Iranian nuclear deal, before we 

normalize relations with Cuba, before we have high-level talks with 

a government like the Maduro government that we say, you know 

what, you have political prisoners or you have Americans in prison 

for various reasons. These ought to be preconditions that the administration puts on the government if they want engagement with 

the United States on these important issues. 

The Venezuelan people are hungry. The Venezuelan people don’t 

have access to peaceably assemble and petition the government for 

redress of grievances and hopefully they will in a recall election. 

Hopefully, that will happen. Time will tell. 

Mr. Smith, U.S. sanctioned Iran. We have had U.S. sanctions on 

Iran and Venezuela institutions. Now, you testified before the 

House Committee on Foreign Affairs back in February that your office uses sanctions to counter Iranian security threats by preventing them access to U.S. financial systems. 

Among the Iranian entities that your office imposed sanctions on 

is the Joint Iran-Venezuela Bank. Has your office investigated 

other banned Iranian financial institutions that may be accessing 

U.S. financial markets via Venezuela? 

Mr. SMITH. Sir, yes. OFAC acts as an instrument of U.S. national 

security and foreign policy and we do investigate what we see as 

the evidence. We follow the evidence across the world where our 

sanctions programs occur. 

Mr. DUNCAN. Okay. Thank you. 

So a simpler question to all of you—what is it going to take? 

What is it going to take to change—to have changes happen in 

Venezuela? 

Is it going to take a new government? And that is going to take 

a recall but it may take the imposition of democratic standards by 

the OAS may start the ball rolling. Is it going to take oil prices 

coming back up? I honestly believe that one net benefit 10 years 

from now, looking back on what OPEC is doing to put the Bakken 

and U.S. energy renaissance out of business is the positive impact 

it is having on the Maduro government and we may see regime 

change in Venezuela that ultimately benefits the Venezuelan people. 

That may be a positive impact of the OPEC policies. But what 

is it going to take? Is it going to take change of the Maduro government through a recall? 

Is it going to take oil revenues going back up for whatever reason 

to provide the economic resources the Maduro government can continue using to prop up a stable economy? 

Is it going to take an end of the El Nino drought and replenish 

water in a lake so they can provide electricity? What is it going to 

take? 

I would love to hear your thoughts on that, and Ambassador, I 

will start with you. I am going to come all the way across. 

31

Mr. KOZAK. Okay. Thank you, Mr. Chairman. 

My own view is it is going to take—you have got to get changes 

in the policies that the Venezuelan government is following. Now, 

whether this government changes its policies radically or the government gets changed out to a government that has different policies, that remains to be seen. 

But what they have so far refused to do is pretty much change 

anything. There is pressure internally building up on them, which 

you well described. All the consequences of their own action has 

generated a lot of internal political pressure. 

There is a growing international pressure on them, as you saw 

with the OAS resolution or joint statement that was passed in 

Santo Domingo where a number of countries in the region that 

weren’t so concerned before now are expressing concern in joining 

us and doing it. 

The other element of what it takes, though, is how do you have—

what is the mechanism for translating that pressure into a result 

and that is—we really have been pushing two possible ones. 

One is the recall referendum which, unfortunately, has been repeatedly delayed by manipulations of the government. And the 

other is trying to get some kind of serious negotiation going between the elected members of the assembly and the elected government to see if they can come up with a package of policy changes. 

Again, the government so far has not done that. The concern is 

that if you don’t do one of those things to bring about a change in 

policy that it goes on and on and on until something breaks and 

then you don’t have a peaceful course correction on the part of the 

Venezuelan government but you just have a chaotic mess at the 

end. 

And so that is why we are putting our efforts into trying to create those vehicles for translating that pressure into a result. But 

it remains to be seen how that is going to work out. 

Mr. DUNCAN. Let us go to Ms. Pforzheimer. 

Ms. PFORZHEIMER. Thank you, sir. 

I agree with Mike about the vehicles. We are looking at the vehicle of dialogue, the vehicle of the recall referendum and, of course, 

the regional pressure. 

But I just want to state that we look at two big goals—a sustainable solution in Venezuela, sustainable economic recovery, and we 

look at Venezuelans having their constitutional rights restored. 

And we want political prisoners released, we want the legislative 

assembly to have the rights and the separation of powers that is 

legitimate and under the constitution. 

Mr. DUNCAN. So saying that, don’t you think that the U.S. position of the OAS should be standing up for those democratic ideals? 

Ms. PFORZHEIMER. Sir, I do agree with that and I believe that we 

are——

Mr. DUNCAN. Is that the official U.S. policy at the OAS? 

Ms. PFORZHEIMER. We support at this point all of those policies 

to support the constitutional measure of a recall referendum and 

we support a dialogue as it is effective and useful. 

Mr. DUNCAN. Is Mr. Fitzpatrick’s position of the OAS going to be 

that the United States supports democratic institutions and prinVerDate 0ct 09 2002 15:53 Sep 20, 2016 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 F:\WORK\_WH\062216\20529 SHIRL
32

ciples within Venezuela and that a recall election should happen? 

Is that going to be the U.S.’ position at the OAS? 

Ms. PFORZHEIMER. Sir, we believe that the recall process should 

proceed as the Venezuelan people want it to. 

Mr. DUNCAN. Okay. I think the Venezuelan people want that. I 

think the Maduro government is actually putting it off. But I just 

want to make sure that we were clear about the U.S. position at 

the OAS. 

I will go to Mr. Smith. What is it going to take? 

Mr. SMITH. Sir, I would say that is a question of foreign policy 

and I defer to my State Department colleagues. We are here to 

offer to be an instrument of U.S. national security and foreign policy objectives. 

But, again, when it comes to the foreign policy I defer to the 

State Department. 

Mr. ANDERSEN. Yes, Mr. Chairman. Thank you for that question. 

I agree with the comments made by my State Department colleagues. We all want to see a prosperous and stable Venezuela, a 

Venezuela that maintains our strong and lasting ties with the Venezuelan people. 

When a resolution is achieved, and we do hope one will be, we 

at Commerce Department, working with the U.S. business community, can and will play an important role in ensuring a longer-term 

solution. 

Mr. DUNCAN. Thank you. 

We will probably have time for another round of questions. 

Mr. Sires is on a tight schedule. I will yield to him for as much 

time as he needs. 

Mr. SIRES. Thank you, Mr. Chairman. You know, I keep hearing 

about the OAS. They have yet to be successful on anything since 

they got first created. 

I mean, what initiative are they going to do? You know, it is just 

amazing to me we keep referring to OAS, OAS, and the track 

record of success is very little. 

Then you have the people in the region. As long as these people 

are dependent on PetroCaribe, how much more pressure are they 

going to put on Venezuela? 

And so far, the only country that I heard that—maybe I am 

wrong—has been Argentina that has spoken up about what is 

going on in Venezuela. 

And these negotiations I think are just stalling. The Venezuela 

government is stalling—stalling and waiting and waiting to see 

what happens, and the fact that you have 30,000 Cubans in Venezuela running the security apparatus, dependent on PetroCaribe 

oil, I mean, I just think that they are trying to prolong this and 

prolong it and prolong it—that somehow people are going to get 

tired and when people get tired they are going to start moving in 

and taking all these corporations over and become the state’s, similar to Cuba, because that is how it started. 

I was there. I saw how it began, little by little. And this business 

of having a supreme court that he created is nothing more to stop 

any efforts from continued democracy in Venezuela. 

So I do hope that maybe there is, and I am wrong and these negotiations are going to lead into something. But I find that very difVerDate 0ct 09 2002 15:53 Sep 20, 2016 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 F:\WORK\_WH\062216\20529 SHIRL
33

ficult, and I was wondering is the Venezuela and Colombia border 

still open or closed? Because I know it is impacting Colombia also. 

Ms. PFORZHEIMER. Sir, the border is closed. However, there is 

some movement, especially for humanitarian purposes. 

Mr. SIRES. One more question. Can you assess to me—do you 

think Maduro is going to last the rest of the year? 

Ms. PFORZHEIMER. Sir, I have no way of assessing that. I know 

that he has some incredibly difficult economic choices ahead about 

making payments on loans and having enough money to import 

foodstuffs for his people and that many analysts have said that this 

year is incredibly difficult for the Venezuelan economy as we see 

it is already difficult for the people. 

Mr. SIRES. Mr. Andersen, what do you think? 

Mr. ANDERSEN. I would have the same response. I mean, I don’t 

think—as I said in my testimony, none of us I think know at this 

point how this may end. 

Mr. SIRES. The reason I ask that is are we prepared in case 

something happens in Venezuela to respond to a situation in Venezuela so it doesn’t get out of hand? Are we making any plans? Are 

we considering the possibility that he may have to step down and 

maybe there is chaos? 

Ms. PFORZHEIMER. Sir, we would be very ready to work with the 

international community if that were the case. There are many humanitarian agencies international—the World Food Program, Food 

and Agriculture Association and the Pan-American Health Organization—that are ready to help in Venezuela if they are asked and 

we are ready to consider support. 

Mr. SIRES. Are we receiving any intel or are we working with the 

Venezuelan community in Florida, which is probably the largest, on 

getting information on what is actually going on in the country or 

we just go by what we read and what people say? Do we have 

meetings with different leaders of the Venezuelan community? 

Ms. PFORZHEIMER. Speaking for myself, I meet with a very wide 

range of people both U.S. and Venezuelan citizens. 

Mr. SIRES. Ambassador? 

Mr. KOZAK. Yes, the same here. We have meetings with human 

rights groups that are very active in Venezuela. I would also note 

we have a functioning U.S. Embassy there that does a lot of reporting on these very issues. 

So they are giving us ground truth and they are in contact with 

a lot of the—not only the opposition political parties but with the 

NGOs in Venezuela so and the business community. So it is more 

than just talking to the government. We have got that whole range. 

Mr. SIRES. These are the people that are basically promoting democracy and human rights within Venezuela—the people that you 

are working with? 

Mr. KOZAK. Yes, sir. 

Mr. SIRES. Can you tell me what country are the most dependent 

on PetroCaribe in the region? Because one of the reasons I voted 

for the export of oil is because I felt that this country could play 

the same type of role that Venezuela is playing. 

I want to be an exporter of energy so we don’t have to have a 

country like Venezuela have these people under their thumb with 

the energy. 

34

A lot of my colleagues don’t agree with that. But the problem 

here is which countries are so dependent on Venezuela for their 

oil? 

Ms. PFORZHEIMER. Sir, overall most of the countries that are the 

most dependent are in the Caribbean and the U.S. is very interested in working with Caribbean nations on diversifying their energy source. 

That dependence is a little bit less in this era of lower oil prices 

and this is the moment for them to consider other sources of energy, and Vice President Biden has met with Caribbean leaders to 

encourage them to consider and act now where we have a little 

breathing room. 

Mr. SIRES. And the last thing I want to say is are we tracking 

Iran’s—are still flights into Venezuela? Are there many flights still 

there or are there no flights anymore or if they venture into Venezuela where is it at? 

Ms. PFORZHEIMER. This is an issue that we follow closely and I 

don’t have details about their specific flights into Venezuela. But 

we remain very vigilant about any of the implications of Iran in the 

whole hemisphere. 

Mr. SIRES. Mr. Smith, you talk about security. Is that what you 

were talking about before? 

Mr. SMITH. We continue to follow Iran’s activities and follow the 

intelligence, the law enforcement information, classified to unclassified, all sources. 

Mr. SIRES. And what does your intel tell you? 

Mr. SMITH. I couldn’t speak—honestly, I don’t have today the answer to that question. But I couldn’t even speak about intel in this 

open setting. But it is something that we—if there were specific 

questions we can take those back and provide in a different setting. 

Mr. SIRES. Classified hearing—a classified briefing, right? 

Mr. SMITH. If there were specific questions in that regard. 

Mr. SIRES. Mr. Chairman, thank you very much. 

Mr. DUNCAN. I thank you, Ranking Member. 

And now we will go to Mr. Donovan for 5 minutes. 

Mr. DONOVAN. Thank you, Mr. Chairman. 

Mr. Smith, I wanted to ask you, are the sanctions that we have 

imposed on Venezuela actually working and if there is an assessment how do we assess whether our sanctions that we impose on 

countries are actually successful or not? 

Mr. SMITH. I think I would say that the sanctions were working 

across the board on the variety of objectives that we have. 

We have imposed sanctions involving Venezuelan actors, individuals, and entities across a wide variety of programs in the past 

year. 

It includes the Kingpin Act for narcotics trafficking activities, 

WMD for weapons of mass destruction activities, counter terrorism 

as well as under the Venezuelan sanctions program itself. 

And so I think all of those serve the message of calling out bad 

activity, alerting the U.S. financial system and the international financial system of the bad individuals and entities—the bad actors—that we think should be cut off. 

So in that respect, I think very much sanctions are having the 

effect that they intended. Of course, sanctions—the ultimate goal 

35

of a sanctions program is to change the behavior, change the behavior not only of the individuals and entities but also of Venezuela as a whole and that still has not occurred. 

Obviously, there are still concerns with the country but I think 

we have succeeded in calling out the bad activity that we needed 

to call out. 

Mr. DONOVAN. When we impose sanctions, are they for a length 

of time? Is there an expiration date of those sanctions or is it until 

we see that change of behavior you just spoke of? 

Mr. SMITH. It is a combination. We don’t have a certain specified 

length of time that sanctions last. We do want to make sure that 

the information is still current, that individuals and entities are 

still engaging in bad behavior, and if we see a change of behavior 

then we can remove them from the list as we do regularly. 

Mr. DONOVAN. One of the things I wanted to ask you about is 

the periodic reports that you submit to Congress and how difficult 

it is for Congress to have oversight because of the reports. 

I think in a 6-month period I have seen 20 different reports. 

They have different time frames in which they measure the success 

of the sanctions. 

There is no single, like, comprehensive report from OFAC that 

would allow congressional oversight to the effect of what the sanctions are doing to those countries and those entities that we impose 

them on. 

Is there any plan to make the—this easier for Congress to recognize either the successes or the failures of the policies that we have 

imposing sanctions? 

Mr. SMITH. We haven’t considered a single report largely because 

we are dealing with dozens of reports to Congress that we do on 

an annual basis. I think there are over 100 reports a year that we 

do to Congress across a range of sanctions programs. 

And so they take away—every time we do an additional report 

they take away some of the resources that we would spend investigating an actor. 

But we believe that the reports are very important so that Congress can continue to be informed of our activities. We have not 

considered a single report largely because we are doing so many of 

the reports that Congress has mandated across the various programs. 

I think we could consider working with Congress if there would 

be a way to do a single report as opposed to all the separate ones. 

That would certainly be a resource savings from our perspective. 

Mr. DONOVAN. Thank you, sir. 

Mr. Chairman, I yield back the remainder of my time. 

Mr. DUNCAN. Thank you. 

Let us see, no Democrats on this side so we will now go to Mr. 

Yoho for 5 minutes. 

Mr. YOHO. Mr. Chairman, I appreciate and I appreciate you guys 

being here discussing this in the Western Hemisphere. This is so 

dear to us and so—I mean, just to see that country fall apart like 

it has. 

And I, you know, live in Florida and being a veterinarian we had 

a lot of Venezuelan clients and we have watched the progression 

of it going from a great country, and I have been there in its 

36

heydays, to see where it is today and just seeing it fall apart and 

properties being confiscated. People can’t get stuff on their shelves 

in the grocery store, ensuing chaos that we see coming. 

With that said, the U.S. should leverage the U.S. Department of 

State and U.S. Department of Defense connections with militaries 

around the region to stress the Venezuelan security forces. 

Their obligation to uphold the constitution and democracy in respect to human rights—what is the U.S. doing to communicate this 

message to the Venezuelan military and people in the other countries in that area? Whoever wants to take that on. 

Ms. PFORZHEIMER. Thank you, sir. 

I think I would find that difficult to discuss instead of——

Mr. YOHO. Okay. 

Ms. PFORZHEIMER [continuing]. Deferring to my colleagues from 

the Department of Defense. 

Mr. YOHO. That is fair enough. Let me ask you this. What influence does Cuba have on the situation in Venezuela and what effect 

does the Obama administration’s so-called normalization of relationships with Cuba have on the Maduro government as far as the 

path that they see forward, if they see one? And I hope it is a short 

one. 

Ms. PFORZHEIMER. Sir, thank you. The U.S. raises, as I noted, 

human rights issues with Venezuela. We have asked the region to 

speak out with us to call for dialogue, to call for the release of political prisoners and we also would hope that Cuba would use whatever influence it does have to do the same. 

However, our conversation with Cuba is conducted on a bilateral 

basis and it is separate from the work that we are doing with the 

region through the OAS. 

Mr. YOHO. Okay. Let me ask you this. 

Do you see Maduro hanging on to last threads of power? Because 

he saw the U.S. soften relationships with Cuba has he felt empowered from that? 

Mr. KOZAK. I might take a shot at that, Mr. Chairman. 

I used to head our interests section in Cuba 15 years ago so I 

know them a bit. The Cubans have managed to hang on to power 

because they had other people outside subsidizing them—the Soviets and, more recently, the Venezuelans. 

And so I think probably the effect has been a little bit the opposite, that the Venezuelans are seeing that the Cubans are able to 

help them in sort of having tens of thousands, as Mr. Sires mentioned, of people there—medical and security type people. 

Mr. YOHO. Right. 

Mr. KOZAK. But they are not able to help them economically. Instead, they are a drain on them and their ideological bent has gotten a little confused with their discussions with us. 

So Cuba has a big role to play precisely because they have all 

those people on the ground. 

But I don’t think that the parallel—certainly the two leaders 

have tried to drive things in the same direction but they don’t have 

that outside——

Mr. YOHO. Well, what I was hoping to get out of that was in 

South America there are several countries that are anti-American 

37

or leaning to the pink type of governments away from Western 

forms of government. 

And when they see people like Castro, you know, getting these 

releases or release from our State Department, I didn’t know if 

that emboldened Maduro to do what he does and hang on instead 

of fighting internally to fix it internally, thinking there—or versus 

thinking, you know, if we just stay strong America is going to come 

in and soften these sanctions and I think that would send the 

whole—a wrong signal to that area. 

We were with Chairman Duncan and we went to South America 

and we talked a lot of the—four of the five Presidents in the countries we went to and we brought this up as a concern—is this going 

to empower Cuba and if so is that going to influence Maduro to 

keep doing what he is doing. 

And I think what I want to end with, Mr. Chairman, is let this 

be entered into the record that a socialism type of government with 

a dictatorial leader like Maduro is not a viable form of government 

in the 21st century and people prosper where liberties and freedoms are protected, not where human dreams and initiatives are 

silenced by repressive government. 

Thank you. 

Mr. DUNCAN. Thank you. Without objection, so ordered. 

So we have time for another round of questions if you all have 

anything else you would like to ask. I am going to jump right back 

in. 

On to Mr. Andersen—first off, you mentioned I thought was interesting—the Argentine government, the economic predictions 

which I think will be proven to be low based on the Macri’s imposition of more free market and I think you are going to see an improvement in Argentina. 

But you were talking about Argentina and sort of—I don’t know 

if you were juxtaposing those or whether you were comparing them 

on a similar——

Mr. ANDERSEN. Thank you, Mr. Chairman. Sorry for the confusion. 

The point I was trying to make is that economies in our hemisphere who have followed a similar approach to Venezuela and I 

was making specific reference to the previous Argentine government, not the current one. 

We share your view completely with the trajectory with the 

friendship, with the relationship with the current Argentine government. But those who have followed a policy that is not market 

friendly, that it has caused economic hardship to companies, have 

not been open to the world economy are the ones who are doing 

much more poorly in this hemisphere. 

Mr. DUNCAN. Absolutely. I think the Kirchner government and 

more socialist policies of big government top-down approach, 

Keynesian economics, just don’t work. I think what you are going 

to see more free market—with the Macri government in Argentina 

you are going to see prosperous days ahead. 

So I think what a lot of the problems we are experiencing in Venezuela right now are because of that same Marxist philosophy. 

So let us talk about energy. Energy is a passion of mine. I think 

energy is a segue to hemispheric stability, economic opportunity 

38

and what we heard—you heard Mr. Yoho talk about travelling to 

Latin America, to a number of countries. 

Energy was on their minds as well, whether their own access 

with their own development of their energy resources, and Argentina is a good example of what Macri wants to do with his energy 

there, how the Argentine people felt about the pipeline that now 

imports natural gas from Chile was originally built to export natural gas to Chile. 

They would love to see Argentina be an exporting country once 

again from Paraguay, wanting to develop the gas fields in up along 

the Bolivian border. So energy is on the minds of the folks there. 

I spoke last week to the Caribbean nations. Energy is on their 

minds, what PetroCaribe may or may not be able to deliver in the 

future—an opportunity for American industry to step into any void 

left by PetroCaribe. 

So energy is definitely an economic driver. But as oil prices remain low, is it possible for the Venezuelan economy to recover 

without oil prices going back up, as I mentioned earlier? And Mr. 

Andersen, that is to you and then I will open it back up to anyone. 

Mr. ANDERSEN. Well, thank you again for that question. 

I am not in a position to speculate on what the price may mean 

in terms of oil or energy for—whether the Maduro government—

what will happen to it. 

I would point out that the—clearly, the position that they find 

themselves in has been exacerbated by the price currently in energy. But this was a long time coming from very anti-market policies for nationalizing companies, for the whole range of bad economic choices they have made over the succeeding years. 

Mr. DUNCAN. I think you hit on something. We see Pemex in 

Mexico denationalization are at least loosening there. We see corruption with Petrobras. We see a state-owned oil company like in 

Venezuela have troubles. 

I don’t know what the price point is for the Maduro government 

to actually start—the economy start benefiting from oil revenues. 

I don’t know what the price point is there. 

But I do know it is hurting them right now, as you say. Ms. 

Pforzheimer, you wanted to jump in on that? 

Ms. PFORZHEIMER. Thank you very much. 

I don’t know the exact price point either but I do know that the 

Maduro government spent a great deal of time over the last year 

trying to work with OPEC nations to get the price raised and at 

some points we heard that they thought $100 a barrel would work 

best. 

We also note, as Mr. Andersen does, that mismanagement and 

corruption are just as much part of the problem with respect to the 

energy sector as the actual world price of oil. 

Mr. DUNCAN. Yes. Anyone else like to talk about energy prices—

energy issues? There are about 500 U.S. companies that are represented in Venezuela and largely in the oil and gas industry but 

not all. 

How easy or difficult is it to conduct day to day business in Venezuela? Mr. Andersen. 

Mr. ANDERSEN. Thank you, Mr. Chairman. I think you——

Mr. DUNCAN. In June 2016, okay? 

39

Mr. ANDERSEN. And I think you referenced some of those concerns in your oral statement, that it is extremely difficult for U.S. 

companies who are in Venezuela to do business in Venezuela from 

a range of issues—from currency issues, from issues on the price 

of imports across the board. 

So it is an extremely difficult environment that they work in, and 

as I also referenced in my testimony a number of them that do stay 

stay also because they have spent decades developing this market. 

They stay out of a sense of loyalty to their Venezuelan employees 

and to their local communities and they are, quite honestly—many 

of them have targets on their back, quite literally, because of their 

being accused, as I indicated, of hoarding and price gauging in 

some cases by the current administration. 

Mr. DUNCAN. Ms. Pforzheimer, what are the regional implications of—from the administration’s standpoint do you see with the 

bad economic situation and the bad government situation in Venezuela? 

We heard from Caribbean nations that are concerned about 

PetroCaribe and commitments made and, of course, Maduro went 

to Jamaica and said they were going to reinvest in refineries there 

and bring them up to speed and I wonder where he is going to get 

the money without borrowing it from China. 

But so when we think about Caribbean nations, can you broaden 

that? What are some of the other implications that we may not be 

thinking about when Surinam or Guyana or Colombia and the 

FARC and Panama and trade and—so enlighten me from the administration’s standpoint, what are some of the implications that 

you all see from this deteriorating situation there? 

Ms. PFORZHEIMER. Thank you for the question. 

We are concerned overall about the deterioration, as you point 

out, and I would really just name two areas. One is what you have 

noted—the dependence of the Caribbean in different degrees on 

PetroCaribe and PetroCaribe funding and I think our response and 

their response, more importantly, is that they know they have to 

get out from that dependence. They must diversify their sources of 

energy. 

The other area of concern that, you know, we have heard, although not at any concerted pitch is that of possible migration. The 

Caribbean islands that are closest to Venezuela, the Dutch Islands 

or the border with Colombia are points that those countries are 

watching very, very carefully and they are raising their concerns 

directly with the Venezuelan government. 

Mr. DUNCAN. Right. So what else can the U.S. be doing at the 

OAS to promote democracy in Venezuela? 

Ms. PFORZHEIMER. So tomorrow’s meeting is, in our view, a very 

important inflection point. Secretary General Almagro published an 

incredibly long and detailed and thorough examination of the InterAmerican Democratic Charter as applied to the situation in Venezuela. 

He is seeking the opportunity to speak with member states about 

that report and we hope he gets that opportunity tomorrow. We 

could see the formation of something like a group of friends from 

the OAS member states who would also try to work with the parVerDate 0ct 09 2002 15:53 Sep 20, 2016 Jkt 000000 PO 00000 Frm 00043 Fmt 6633 Sfmt 6633 F:\WORK\_WH\062216\20529 SHIRL
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ties in Venezuela and urge them to seek a sustainable solution 

there. 

Mr. DUNCAN. But within the OAS itself, you have got an Argentine plan or model. You got Almagro. So it would be interesting to 

see what happens tomorrow. I agree with you on that. 

I am going to recognize a former chairman of the committee and 

now chairwoman of the Middle East and North Africa Subcommittee, Ms. Ros-Lehtinen. 

Ms. ROS-LEHTINEN. Thank you so much, Mr. Chairman, and I 

deeply apologize for coming so late today. I had the opportunity to 

speak on the House floor this morning about Venezuela and I hope 

that you get a chance to view my remarks. 

But I had a few questions. Thank you so much for your leadership on this issue of freedom and fairness for the people of Venezuela. 

And as you know, Mr. Chairman, in September of last year I was 

joined by 19 of my colleagues in sending a bipartisan letter to Secretary Kerry and Secretary Lu urging the administration to enforce 

a bill that I passed along with all of our colleagues and Senator 

Marco Rubio, the Venezuela Defense of Human Rights and Civil 

Society Act, and we asked the secretaries to enforce this bill and 

apply sanctions on regime officials in the Venezuelan court system 

in response to the unjust sentencing of Venezuela activist and political prisoner Leopoldo Lopez. 

If I could ask the witnesses, Mr. Chairman, what justification do 

they have for not carrying out and implementing these sanctions 

for this miscarriage of justice and what is the dollar amount of the 

assets seized of the seven individuals that you have sanctioned. 

And I am going to continue on the subject of sanctions. I am 

aware that State has pulled some visas due to human rights violations and if they could tell us how many visas the State Department has pulled and who are these individuals. 

So much of this is done in secret. We just don’t know what is 

happening. And last week at the OAS meeting in the Dominican 

Republic, Secretary Kerry stated that Venezuela should follow its 

own constitution and hold a fair and timely recall referendum. 

And I wanted to ask our witnesses if Secretary Kerry believes or 

expects that it will happen this year. 

And lastly, Maduro has stated that he is ready to exchange Ambassadors and I think that this is a big mistake by our State Department because it will look as if we are legitimizing an illegitimate regime and I wanted to ask the witnesses will the State Department nominate someone this year to be Ambassador to Venezuela. 

And I was—lastly, Mr. Chairman, I had the opportunity to meet 

with some wonderful young people who are here in the audience 

today representing the youth of Venezuela and they gave me a 

summary of the facts of Valencia, a state in Venezuela, and gave 

me a list of individuals they believe should be on the sanctioned 

individual list and I wanted to ask our witnesses if they will be 

adding some names to this list. 

And Mr. Chairman, with your indulgence, if I could put this letter as part of the record and if I could put—if I could hand this 

document to our officials to see if—we have given them so many 

41

good suggestions of really bad actors in Venezuela who deserve to 

be sanctioned. 

They want to come to the United States. We should just not let 

them come. We have got a bill that became a law that, sadly, has 

not been implemented. 

So thank you, Mr. Chairman. 

Mr. DUNCAN. Without objection. 

Ms. ROS-LEHTINEN. And I would love to get their responses, whoever would like to respond. Thank you. Thank you, ma’am. 

Ms. PFORZHEIMER. Thank you very much for your questions. I 

will address some of them and ask my colleague from OFAC to address others. 

Ms. ROS-LEHTINEN. Good. Thank you. 

Ms. PFORZHEIMER. Thank you very much. Thank you about your 

question regarding future sanctions. This is an important tool that 

we can use, we have used. 

At this point, we are still assessing the utility and we would consider any public or diplomatic or legally available method to address the injustices in Venezuela. 

Ms. ROS-LEHTINEN. If I could just follow up with that. So this bill 

became a law. So not that we needed to even pass it because the 

administration had this authority already. 

We just wanted to nudge them along, and you have heard of individuals who are violating the human rights of Venezuelan nationals. And what would it take to add people to the list? 

I hope that it doesn’t take more deaths. The Maduro regime is 

already responsible for so many deaths in Venezuela. 

What more do we need to do so that we can add names to the 

people who will not be allowed into the United States whose assets 

will be frozen, whose bank accounts will be frozen? What more 

needs to be done? 

Ms. PFORZHEIMER. Thank you, ma’am. We are assessing—we will 

continually assess the utility of the sanctions, tools at our disposal. 

And also, as you noted and has been noted by the chairman, there 

have been visa revocations that have occurred and are still occurring. 

Ms. ROS-LEHTINEN. Can you tell me how many visas were 

pulled? 

Ms. PFORZHEIMER. There have been over 60 visas. 

Ms. ROS-LEHTINEN. And are you making those public? 

Ms. PFORZHEIMER. Due to visa confidentiality rules, we would 

not be making public the names of the people whose visas were revoked. 

Ms. ROS-LEHTINEN. And how about the sanctioned individuals? 

Ms. PFORZHEIMER. Those are——

Ms. ROS-LEHTINEN. When was the last time that someone had 

been sanctioned from Venezuela? 

Mr. SMITH. Ma’am, thank you for the questions and I know there 

are a number of them and I think came to the OFAC one so I will 

go down the list, if I may. 

I will first start off by thanking Congress for its leadership in 

this area because I think the statute was particularly important 

and helpful in helping us craft and work with the rest of the administration to craft an Executive order to build off the statute and 

42

to actually implement the—some of the sanctions that came from 

that. 

I will also thank you all because I think we have continued to 

receive information from various Members of Congress and staff 

through NGOs or other groups and we continue to look at that information as we build packages. 

When you ask about when was the last time when the President 

issued the Executive order in March 2015 those were the seven individuals that received economic sanctions——

Ms. ROS-LEHTINEN. And since March 2015? 

Mr. SMITH. We have not frozen any additional assets. We have 

not issued additional sanctions freezing assets——

Ms. ROS-LEHTINEN. But you do agree that there have been egregious human rights violations that have occurred in Venezuela 

since March 2015 or do you not think that that is true? 

Good to see you. 

Mr. KOZAK. Nice to see you. 

Ms. ROS-LEHTINEN. Old friend for many years. 

Mr. KOZAK. Yes, indeed. A pleasure. 

I might jump back because we are talking both with the sanctions under the—that involve assets which have a much higher 

standard of proof and so on and then the visas that my colleague 

mentioned. 

The visa ban has continued on. Every so often we will do another 

trench. We have got more in the works right now, and while we 

can’t—as Annie mentioned, we can’t give names under the visa 

laws, we have said that these have included ministers in the government, senior presidential advisors, judicial and law enforcement 

personnel at high levels. 

So, you know, and they know who they are and I think, more importantly, a lot of their colleagues know who they are and we have 

seen—I mean, one of the reasons you did is, one, is to punish people for their bad behavior but the other is to deter other people 

from the same kinds of behavior and we have seen evidence of that 

working. 

Ms. ROS-LEHTINEN. And when bad behavior—if I could interrupt 

and I will leave with this—bad behavior means that they have 

given orders to violate the human rights——

Mr. KOZAK. Absolutely. 

Ms. ROS-LEHTINEN [continuing]. Of Venezuelan natives. I mean, 

it is not coming late to class. 

Mr. KOZAK. No, exactly. The visa——

Ms. ROS-LEHTINEN. Ordering the killing of students, unarmed. 

Mr. KOZAK [continuing]. Is within two categories, basically. One 

is just that—really serious violations of human rights such as putting people away for nothing other than their opinion and the other 

is public corruption. 

Ms. ROS-LEHTINEN. Violations that can be proven and we have 

given—with all due respect and I will end with this, so much evidence, Mr. Chairman, and I just feel like we are letting the people 

of Venezuela down when we don’t use the laws to the fullest extent. 

Mr. DUNCAN. It is following a pattern, though. 

Ms. ROS-LEHTINEN. It is, sir. 

43

Mr. DUNCAN. We are letting people of Cuba down. 

Ms. ROS-LEHTINEN. Amen. 

Mr. DUNCAN. Now we are letting the people of Venezuela down. 

Ms. ROS-LEHTINEN. Thank you, Mr. Chairman. 

Mr. DUNCAN. Yes. Thank you. 

Ms. ROS-LEHTINEN. Thank you, sir. Thank you. 

Mr. DUNCAN. Thank you. You always do a great job. You are welcome, too. I will go down to Mr. Yoho for a follow-up. 

Mr. YOHO. Thank you, Mr. Chairman. I appreciate the extended 

time and I thank you guys for sitting here. 

With Venezuela collapsing like they are—their economy, their infrastructure and there is that social explosion of people wanting 

the changes in there—what are the potential ramifications for that 

region? 

Do you see it destabilizing any of the surrounding countries? And 

if you answered that earlier I apologize. 

Ms. PFORZHEIMER. Thank you for the question. 

It is something that we watch and we are working with our Embassies in region—in countries that are in the region with Venezuela. 

We noted—I noted two areas of concern. One is the economic implications that could occur to the Caribbean, which has been very 

dependent on the Venezuelan energy and our efforts to work with 

them to diversify their sources of energy. 

And the other is the possibility of any kind of migration of people 

leaving Venezuela and that could be—that could affect the islands 

that are close by, the Dutch Islands, or Colombia. 

Mr. YOHO. And that is one of my follow-up questions. What are 

the humanitarian refugee migration flow risks to the surrounding 

countries? Are they prepared for that? 

And then, you know, with the Maduro regime or government not 

liking us too much or the disdain they have for us, at what point 

can we intervene humanitarian wise and do we have that set up 

and do we have metrics I assume we had already set up, right? 

Ms. PFORZHEIMER. I think in—to answer your second question 

first that it is important if there were any kind of humanitarian 

intervention that it be multilateral. I think that is the most important function of the agencies that are set up to assess food needs, 

to give emergency help to children like UNICEF, and we are active 

participants in those organizations. 

So we would look to them to assess the needs and the conditions 

for any kind of humanitarian assistance. 

Mr. YOHO. Let me ask you a pointed question. Is there any plans 

on relocating any of the Venezuelan refugees to Guantanamo in 

there where we had the tent city back in—back when we had it? 

And I ask that question because I was down there and there was 

talk of that, of an infrastructure going in. Is that something you 

can comment on? 

Ms. PFORZHEIMER. I don’t think, first of all, that I should comment on something that would be under Department of Defense authorities. But I have absolutely no information about anything like 

that. 

Mr. YOHO. All right. Let me ask you this. 

44

With the void that is happening in that government in Venezuela, who do you see fulfilling that void? You know, do we have 

to worry about a Libya in the Western Hemisphere with ISIS coming in? 

We know the connections between Iran, Hezbollah, Russia and 

China, and the reports I have read that are public knowledge is 

that ISIS has been through there, that Venezuela has been 

complicit in faking passports of people of Middle Eastern status—

ISIS status—faking passports so that they can cross through from 

here to Canada, from there through Mexico, through Canada. Do 

you have any activity down there now that we need to know about? 

Ms. PFORZHEIMER. Thank you. First and foremost, I think that 

our law enforcement colleagues who are not here today are best 

placed to talk about any kind of controls that would be appropriate 

to what you are describing. 

But we, as the U.S. Government, would watch any kind of indications of that nature very carefully. As far as the idea of vacuum, 

you know, the opposition is looking for a constitutional peaceful 

mechanism to express their concerns. 

Mr. YOHO. That is only if they are allowed to go through the 

process that they are set up to do and with 1.4 million people’s signature verified on the recall, you know, things can fall apart real 

quickly and then chaos breaks out and I—all we have to do is look 

back at Syria and see the way that started and where it is today 

and we don’t need that in the Western Hemisphere. 

So with that, Mr. Chairman, I am going to yield back and I appreciate the opportunity and thank you all for being here. 

Mr. DUNCAN. I want to thank you and I will thank all the members that participated. Great questions, great dialogue. I want to 

thank the witnesses for being here today as well. I think we have—

we have opened a number of lines of thought and I hope we will 

continue the dialogue because the Venezuelan people need us to 

continue the dialogue. 

If you think about—it has only been, what, 20 years or less since 

Chavez took over and the changes—I think about pre-Chavez Venezuela and Chavez and Venezuela in June 2016. 

As I said earlier, it is heartbreaking for the Venezuelan people 

when you think about the resources that are available there, the 

country that Venezuela can be and that we yearn for it to be once 

again and can be with democratic principles and ideals in place 

and followed. 

It is not that they don’t have a constitution, not that they don’t 

have a legislature or not, not that they don’t have different 

branches of government, not that they don’t have democratic principles in existence but you have to follow those. 

So thank you and I look forward to tomorrow and the OAS hearing—meeting, rather—and what may develop on these different 

lines of thought and tracks that it looks like others are going down. 

So we will conclude, and pursuant to Rule 7 the members of the 

subcommittee will be permitted to submit written statements to be 

included in the official record. 

Without objection, the hearing record will remain open for 5 business days to allow statements, questions, extraneous materials for 

the record subject to the length limitation in the rules. 

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We had some items that were submitted for the record earlier, 

and there being no further business we will stand adjourned. 

[Whereupon, at 2:19 p.m., the subcommittee was adjourned.] 

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