(Bloomberg) -- The U.S. is considering sanctions that would effectively prohibit Visa Inc., Mastercard Inc. and other financial institutions from processing transactions in Venezuela, an administration official said, a step aimed at cutting off funds to Nicolas Maduro’s regime.
If the Trump administration decides to move forward, such sanctions could prohibit U.S. companies from engaging with entities that recognize Maduro as the president of Venezuela. U.S. and other international firms use local institutions to process transactions, and the majority of the local financial institutions are state-owned enterprises.
While Treasury, White House and other administration officials are debating how to proceed, no decisions have been made, the official said. Similar limits on international transactions have been imposed in Syria, North Korea and Iran, and to a lesser degree in Russia.
The aim is to squeeze Maduro and his allies in the military, as well as other connected, upper middle-class Venezuelans who have access to bank accounts and credit cards. The U.S. has some ability to target restrictions in ways that could exempt medicine or food. It was not immediately clear how broadly sanctions on banks would hit most Venezuelans, who may lack access to bank accounts or credit.
The move also has the potential to impact oil, power, aviation and agricultural companies that engage in business in Venezuela, including General Electric Co., Cargill Inc. and American Airlines Group Inc., and their local contractors.
Visa and Mastercard account for most of the transactions in the country. Such a restriction might prompt other international payment-processing companies to pull out of the country as well.
The purpose of the sanctions would be to continue to deprive the illegitimate Maduro regime of access to funds and deny their ability to continue stealing from the Venezuelan people, said the official, who spoke on condition of anonymity to discuss the deliberations.
Venezuela’s opposition chief Juan Guaido in late January declared himself interim president until fair elections can be held. The U.S., which has recognized Guaido as the country’s legitimate leader, has sought to deliver aid to the Venezuelan people while levying sanctions aimed at shutting off Maduro’s access to currency. Maduro still receives support from Russia and China.
Despite stitching together some 50 countries to support Guaido, the U.S. has so far been unable to get Maduro to leave or persuade the country’s military to abandon him. Secretary of State Michael Pompeo said Tuesday the U.S. will pull all remaining personnel from its embassy in Caracas.
(Updates with Pompeo in final paragraph.)
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