Sanctions on PDVSA? RLY? (updated second time)

So says Reuters:

WASHINGTON May 24 (Reuters) – The United States will sanction Venezuela’s state oil company PDVSA on Tuesday for dealing with Iran in violation of a U.S. ban on such trade, sources briefed on the matter told Reuters.

(Hat tip to the Devil)

Quoting from my earlier coverage of this topic:

Venezuela’s on-again, off-again approach to fuel sales to Iran has become more intriguing in recent weeks, since Reuters published a story saying that Venezuela had shipped two cargoes of fuel. It would be of purely passing interest except that the U.S. strengthened its sanctions (PDF) on Iran last year to punish companies that provide fuel to the country, as a way of pressuring the Islamic Republic to be more servile about proving it has no nuclear weapons-related program activities.

This makes it explosive that there are supposedly documents proving a sale of reformate from PDVSA to Iran. Josh Shahryar posted three documents purporting to show that the shipments happened. As for describing his sources, he said only “Documents obtained by credible sources close to the matter.”

PDVSA President Rafael Ramirez has repeatedly denied such sales in recent months (news reports from October and February), and a PDVSA spokesman, who requested not to be named citing company policy, referred me to Ramirez’s remarks in response to the Pajamas Media article. I sent him links to the documents and am awaiting a reply about whether the company can confirm their veracity.

A U.S. State Department brochure on Iran sanctions (sorry, no link as my source requested that the document not be distributed in full) says the executive branch has little discretion when it comes to companies known to have violated the law. It’s not like some foreign policy items, like deciding whether a country is cooperative against terrorism or drugs, where judgment can play a role. If a country ships fuel to Iran, sanctions click in:

Iran Sanctions Act … requires the President to impose sanctions on a wide variety of activities in Iran’s energy sector. Activities that can trigger sanctions include … Selling or providing Iran with refined petroleum products, with
– Fair market value of $1 million or more; or
– Aggregate fair market value of $5 million or more in a 12-month period

And the sanctions are:

Three or more out of nine possible sanctions shall be imposed on any person determined to have engaged in sanctionable activities. The nine sanctions would prohibit:
1. Export assistance from the Export-Import Bank of the United States;
2. Licenses for exports;
3. Private U.S. bank loans exceeding $10 million in any 12-month period;
4. If the sanctioned person is a financial institution, designation as a primary dealer in USG debt instruments or services as a repository of USG funds;
5. Procurement contracts with the United States Government;
6. Foreign exchange transactions subject to U.S. jurisdiction;
7. Financial transactions subject to U.S. jurisdiction;
8. Transactions with respect to property subject to U.S. jurisdiction;
9. Imports to the United States from the sanctioned entity.

Under this law, it would be possible to hit PDVSA hard by applying sanctions 7, 8, and 9, or to hit it in an almost insignificant way, with measures 1, 2 and 5, for example. Regardless, sanctions is sanctions.

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