This report, divided into three main sections, examines the political and economic situation in Venezuela and U.S.-Venezuelan relations. The first section surveys the political transformation of Venezuela under the populist rule of President Hugo Chávez (1999-2013) and the first two years of the government of President Nicolás Maduro, including the government's severe crackdown on opposition protests in 2014. The second section analyzes Venezuela's political and economic environment in 2015 and 2016, including the opposition's December 2015 legislative victory and the Maduro government's attempts to thwart the powers of the legislature; efforts to remove President Maduro through a recall referendum; deteriorating economic and social conditions in the country; and the government's foreign policy orientation. The third section examines U.S. relations with Venezuela, including the imposition of sanctions on Venezuelan officials, and selected issues in U.S. relations—democracy and human rights, energy, counternarcotics, and terrorism concerns. Appendix A provides information on legislative initiatives in the 113 th and 114 th Congresses, and Appendix B provides links to selected U.S. government reports on Venezuela. Significant recent developments include the following: On January 4, 2017, President Maduro appointed former Interior Minister and Governor of Aragua state Tareck El Aissami as vice president, replacing Aristóbulo Istúriz, who served in the position for one year. The action was significant since El Aissami would serve out the remainder of President Maduro's term if the President were recalled or stepped down from office. On December 7, 2016, the Senate Foreign Relations Committee reported S.Res. 537 (Cardin), amended, expressing profound concern about the ongoing political, economic, social, and humanitarian crisis in Venezuela; urging the release of political prisoners; and calling for respect of constitutional and democratic processes, including free and fair elections. On November 18, 2016, a U.S. federal court in New York convicted two nephews of Venezuelan First Lady Cilia Flores for conspiring to transport cocaine into the United States. (See " Counternarcotics Issues ," below.) On November 16, 2016, the Organization of American States (OAS) Permanent Council adopted a declaration supporting the national dialogue in Venezuela, encouraging the government and the 10-party opposition coalition known as the Democratic Unity Roundtable ( Mesa de la Unidad Democrática , or MUD) "to achieve concrete results within a reasonable timeframe," and asserting the need for the constitutional authorities and all political and social actors to act with prudence and avoid any action of violence or threats to the ongoing process." (See " OAS Efforts on Venezuela ," below.) On November 12, 2016, the Venezuelan government and opposition completed a second round of talks and issued a declaration expressing firm commitment to a peaceful, respectful, and constructive coexistence. They also issued a statement that included agreement to improve the supply of food and medicine, to resolve the situation of three National Assembly representatives who the Maduro government blocked from taking office, and to work together in naming two National Electoral Council (CNE) members whose terms expire in December. Some opposition activists have strongly criticized the dialogue as a way for the government to avoid taking any real actions, such as releasing all political prisoners. (See " Vatican Prompts Renewed Efforts at Dialogue ," below.) From October 31, 2016, to November 2, 2016, Under Secretary of State Thomas Shannon traveled to Venezuela to demonstrate support for the Vatican-facilitated dialogue. (See " Pressing for Respect for Human Rights, Democracy, and Dialogue in 2016 ," below). On October 30, 2016, the government and representatives of most of the opposition (with the exception of Leopoldo López's Popular Will party) held talks mediated by the Vatican along with the former presidents of the Dominican Republic, Spain, and Panama and the head of the Union of South American Nations (UNASUR.) (See " Vatican Prompts Renewed Efforts at Dialogue ," below.) On October 20, 2016, Venezuela's CNE indefinitely suspended the recall referendum process after five state-level courts issued rulings alleging fraud in a signature collection drive held in June. (See " Efforts to Recall President Maduro ," below.) On September 27, 2016, the House approved H.Res. 851 (Wasserman Schultz) expressing profound concern about the humanitarian situation, urging the release of political prisoners, and calling for the Venezuelan government to hold the recall referendum this year. (See " Pressing for Respect for Human Rights, Democracy, and Dialogue in 2016 " and Appendix A , below.) On September 21, 2016, Venezuela's CNE announced that the signature drive for the recall referendum process would be held over a three-day period from October 26, 2016, to October 28, 2016. The CNE also said that that if a recall referendum were held, it likely would take place in the middle of the first quarter of 2017. (See " Efforts to Recall President Maduro ," below.) On September 12, 2016, President Obama determined for the 12 th consecutive year that Venezuela is not adhering to its international antidrug obligations. (See " Counternarcotics Issues ," below.) On August 11, 2016, the United States joined 14 other members of the Organization of American States (OAS), in issuing a joint statement urging the Venezuelan government and opposition "to hold as soon as possible a frank and effective dialogue" and calling on Venezuelan authorities to realize the remaining steps of the presidential recall referendum "without delay." Previously, the 15 countries had issued a statement on June 15, 2016, that, among other measures, expressed support for a "timely, national, inclusive, and effective political dialogue" and for "the fair and timely implementation of constitutional mechanisms." (See " OAS Efforts on Venezuela ," below.) On August 1, 2016, the U.S. Federal Court for the Eastern District of New York unsealed a 2015 indictment against two Venezuelan military officials for cocaine trafficking to the United States. One of those indicted, General Néstor Luis Reverol Torres, had been the former head of Venezuela's National Anti-Narcotics Office. President Maduro responded by appointing General Reverol as Minister of Interior and Justice in charge of the country's police forces. (See " Counternarcotics Issues ," below.) For 14 years, Venezuela experienced enormous political and economic changes under the leftist populist rule of President Hugo Chávez. Under Chávez, Venezuela adopted a new constitution and a new unicameral legislature and even a new name for the country, the Bolivarian Republic of Venezuela, named after the 19 th century South American liberator Simon Bolivar, whom Chávez often invoked. Buoyed by windfall profits from increases in the price of oil, the Chávez government expanded the state's role in the economy by asserting majority state control over foreign investments in the oil sector and nationalizing numerous enterprises. The government also funded numerous social programs with oil proceeds that helped reduce poverty. At the same time, democratic institutions deteriorated, threats to freedom of expression increased, and political polarization in the country also grew between Chávez supporters and opponents. Relations with the United States also deteriorated considerably as the Chávez government often resorted to strong anti-American rhetoric. In his first election as president in December 1998, Chávez received 56% of the vote (16% more than his closest rival), an illustration of Venezuelans' rejection of the country's two traditional parties, Democratic Action (AD) and the Social Christian party (COPEI), which had dominated Venezuelan politics for much of the previous 40 years. Elected to a five-year term, Chávez was the candidate of the Patriotic Pole, a left-leaning coalition of 15 parties, with Chávez's own Fifth Republic Movement (MVR) the main party in the coalition. Most observers attribute Chávez's rise to power to Venezuelans' disillusionment with politicians whom they judge to have squandered the country's oil wealth through poor management and endemic corruption. A central theme of his campaign was constitutional reform; Chávez asserted that the system in place allowed a small elite class to dominate Congress and that revenues from the state-run oil company, Petró leos de Venezuela , S.A. (PdVSA), had been wasted. Although Venezuela had one of the most stable political systems in Latin America from 1958 until 1989, after that period numerous economic and political challenges plagued the country and the power of the two traditional parties began to erode. Former President Carlos Andres Perez, inaugurated to a five-year term in February 1989, initiated an austerity program that fueled riots and street violence in which several hundred people were killed. In 1992, two attempted military coups threatened the Perez presidency, one led by Chávez himself, who at the time was a lieutenant colonel railing against corruption and poverty. Ultimately the legislature dismissed President Perez from office in May 1993 on charges of misusing public funds, although some observers assert that the president's unpopular economic reform program was the real reason for his ouster. The election of elder statesman and former President Rafael Caldera as president in December 1993 brought a measure of political stability to the country, but the Caldera government soon faced a severe banking crisis that cost the government more than $10 billion. While the economy began to improve in 1997, a rapid decline in the price of oil brought about a deep recession beginning in 1998, which contributed to Chávez's landslide election. In the first several years of President Chávez's rule, Venezuela underwent huge political changes.