top of page


Venezuela: A Case Study in Sectoral Sanctions Failure

Por: Geoff Ramsey*

Agosto 2020


*Director para Venezuela, Washington Office on Latin America (WOLA);

In the last quarter century sanctions have become a popular tool in the foreign policy toolkit. Yet even as the use of sanctions becomes increasingly common, the literature is clear: economic sanctions have a discouraging success rate. There are, however, some factors that can improve their effectiveness. Studies have shown that sanctions are more effective when they are multilateral and imposed by a broad coalition of states (Bapat & Morgan, 2009). Unfortunately, even this does not guarantee success. The most well-known study of economic sanctions in the 20th and 21st centuries, by Gary Clyde Hufbauer, Jeffrey Schott and Kimberly Ann Elliot (2019), suggests they met their objectives one-third of the time Other scholars, like Robert Pape, have suggested this analysis of the historical record is too generous, and claim that the success rate of economic sanctions is closer to five percent, (1997). 

Sanctions not only fail to meet their objectives more often than not, they also can have deeply negative consequences for the population in the target country. In fact, the use of extensive economic sanctions is most commonly followed by more, not less repression (Peksen, 2009)—with a harmful impact on independent civil society and the private sector, all of which ultimately weakens the ability of the population to mobilize against target governments. 

This is the case in Venezuela, where a growing US emphasis on sectoral sanctions since August 2017 has come with negative externalities for the population at large, while there is no clear evidence that these sectoral sanctions have increased the odds of a democratic transition. To the extent that US sanctions have had any impact on internal dynamics inside the Maduro regime, there is more evidence of the effectiveness of sanctions against individuals than of the effectiveness of sanctions that impact the economy as a whole. Unfortunately, this dynamic has been lost on the current US administration, which seems increasingly interested in using sanctions as a virtue signal to advance its domestic political interests rather than to maximize the potential for a realistic transition.

Overview of Sanctions Adopted in Response to the Venezuela Crisis

As Venezuela has descended deeper into authoritarianism, there have been multiple waves of sanctions issued by the international community. These can be divided into two categories: sanctions against individuals, which amount to denying individual visas and freezing assets, complicating their access to banking institutions; and sectoral sanctions, which restrict trade with the country and have mostly had a larger impact on the Venezuelan economy as a whole. 

Sanctions against individuals have been adopted by a relatively wide community of countries. The United States has imposed sanctions on individuals in Venezuela for alleged links to organized crime since 2008, and in response to alleged corruption or human rights violations since 2015. Today there are 154 individuals in Venezuela sanctioned by the US government, with allies such as Canada, the European Union, Panama, and Switzerland joining in adopting sanctions against many of the same individuals. The US government has sought to paint most of Latin America as also having joined in individual sanctions by adopting a December 2019 resolution as part of a joint Inter-American Treaty of Reciprocal Assistance (TIAR) meeting, but it is important to note that these measures are not the same. Unlike the above countries’ individual sanctions regimes, the TIAR declaration is purely voluntary and non-binding (De Alba, 2019). 

By contrast, the United States is so far the only country to adopt sectoral sanctions (with the possible exception of the European Union’s 2017 embargo on selling arms and law enforcement material to Venezuela). These sanctions began in August 2017 with the issuance of an Executive Order that prohibited US actors from dealing in new debt and equity issued by the government or state oil company Petróleos de Venezuela, SA (PDVSA), as well as some existing bonds. Since then the US has also adopted sanctions targeting Venezuelan cryptocurrency, the mining industry, and the oil sector. The oil sanctions, which began in January 2019, have been a particular focus of US policy, and effectively prevent Venezuela from exporting crude oil to the United States, which has traditionally been the main market, as well as preventing suppliers from selling refined products such as gasoline and diluents necessary for Venezuela to process its heavy crude. Since late 2019, the US government has expanded these measures into secondary sanctions, limiting the ability of third-party countries to trade Venezuelan crude for refined products such as gasoline. 

The Impact of Individual vs. Sectoral Sanctions

US sectoral sanctions have had a mixed impact in Venezuela. On one hand, supporters of the broader sanctions argue that these measures have cut into state income, and complicated Maduro’s finances. This may be true, but there is no clear evidence to suggest they have maximized the potential for a democratic transition or prevented growing authoritarianism in Venezuela. Today Maduro’s hold on power appears stronger than at any point in the 18 months since oil sanctions were announced and is perhaps even stronger than when the 2017 financial sanctions were first imposed. Maduro has successfully put down increasingly infrequent uprisings in the last three years, and the military command has demonstrated loyalty to him on every occasion when tested. 

Meanwhile, the sectoral sanctions have had a series of counterproductive effects on civil society, the private sector, and the economy as a whole. Independent NGOs and humanitarian agencies have reported well-documented banking challenges as a result of banks and other financial institutions seeking to comply with US sanctions (Broughton & Tokar, 2019). The private sector has made similar complaints, with the president of the Venezuelan Federation of Chambers of Commerce (Fedecamaras) claiming in February 2020 that US sanctions have “produced collateral damage in the Venezuelan economy.” (Descifrado, 2020). This opinion is shared by a large number of Venezuelans, with a July 2020 Datanalisis poll showing that 64% of the population does not agree with US oil sanctions (Entorno venezolano, 2020).

While the Venezuelan economy was already in a tailspin for the imposition of sectoral sanctions in 2017, there is no doubt that these measures have worsened the crisis and prevented a recovery. Venezuela is a classic petrostate, meaning that its economy is highly import-dependent, with oil sales accounting for roughly 90 percent of the hard currency that is used to pay for imports (Monaldi, 2018). By reducing the Venezuelan state’s ability to produce, refine, and export oil, US sanctions have contributed to shortages of food, medicine, and other goods, which were already widespread due to years of corruption and economic mismanagement. The impact of oil sanctions in Venezuela cannot be easily separated from the impact of the preexisting economic crisis, but it likewise cannot be dismissed. There are clear indicators to suggest that deteriorating living standards in Venezuela accelerated with the oil sanctions, such as a 60% drop in imports in the first quarter of FY2019 (Rodríguez, 2020).  Because existing sanctions severely limit Venezuela’s access to credit, the prospects of a short term economic recovery are slim—even if the de facto Maduro government were to adopt more sensible economic policies.

By comparison, the multilateral sanctions against individuals have affected no one other than political, military, and economic elites close to the Maduro regime. Skeptics of these sanctions have cautioned that these measures risk binding targeted individuals closer to the government, but the US, EU and other sanctioning bodies have addressed these concerns by clearly communicating that they are willing to lift sanctions in exchange for actions that support the reestablishment of democracy in Venezuela. While the plot on April 30, 2019, failed to oust Maduro, it remains the closest the opposition has come to achieving its stated goal of negotiating Maduro’s ouster followed by a mixed transitional government. Individuals close to the operation have claimed that sanctioned figures such as Defense Minister Vladimir Padrino López and Supreme Court Justice Maikel Moreno were initially lured into discussing the plot by the promise of sanctions relief, even they ultimately backed out. And the fact that the US and Canadian governments provided sanctions relief to three individuals in the lead up to and after the incident—the wives of Globovisión magnate Raul Gorrín and an associate, as well as former spy chief Manuel Cristopher Figuera—suggests that US officials were able to use individual sanctions as effective leverage (Associated Press, 2019). Even the threat of individual sanctions may have been effective in encouraging defections from the Maduro government. Former Venezuelan Attorney General Luisa Ortega Díaz, for instance, was a favored target of US Senator Marco Rubio, who lobbied for her to be included on the US sanctions list. But she broke from the government in 2017, before she could be targeted by the US Treasury Department, suggesting that the fear of sanctions may have been a factor in her defection. 


While economic sanctions generally do not work, there is evidence that their effectiveness can be improved when they are more multilateral. In Venezuela, there is scant evidence that sectoral sanctions have contributed to a transition. Rather than empower Venezuelan civil society to stand against authoritarianism they have contributed to a dramatic deterioration of living standards which ultimately demobilize the population. With an increasing share of Venezuelans focusing on meeting their day to day needs, the political opposition has lost a significant amount of its mobilizing capacity. Venezuelan civil society, as well as the country’s beleaguered private sector, have been negatively affected by these measures, and a majority of Venezuelans oppose them. Meanwhile, there is a clearer basis to argue that individual sanctions—the most multilateral sanctions—have had more success in creating cracks in the ruling coalition. The promise of sanctions relief for individuals has proven to be a significant motivating factor for elites in Venezuela to support a transition and should be further explored by US and international policymakers. 

Unfortunately, this dynamic appears lost on the Donald Trump administration, which has given up on a strategy of pursuing internal divisions and severely restricted the international community’s ability to shape the incentives of Venezuelan powerbrokers. In March 2019, the US Department of Justice unsealed indictments against 15 Venezuela elites, including the heads of every government institution controlled by the ruling Socialist party, among them Padrino López, Moreno, and ruling Socialist Party chief Diosdado Cabello. While US individual sanctions are explicitly flexible and subject to relief following a change of behavior, the indictments are not. As US Special Representative Elliott Abrams has said: “We have made it very clear, the indictments do not come off.”  Whatever incentives these individuals may have had to support a transition have very likely been eliminated, as they and they are each more likely to decide that they are better off sticking with Maduro, even if they have to go down with the ship.


Associated Press. (2019, March 19). US lifts sanctions on wives of Venezuela TV magnates. Retrieved August 31, 2020, from

Bapat, N., & Morgan, T. (2009). Multilateral Versus Unilateral Sanctions Reconsidered: A Test Using New Data. International Studies Quarterly, 53(4), 1075-1094. Retrieved August 30, 2020, from

Broughton, K., & Tokar, D. (2019, August 16). Humanitarian Groups Face Banking Challenges as Venezuelan Sanctions Escalate. Retrieved August 31, 2020, from

De Alba, M. (2019, September 28). ¿Qué decidió el órgano de consulta del TIAR? Retrieved August 31, 2020, from

Descifrado. (2020, February 18). Ricardo Cusano: Las sanciones del gobierno de EE.UU están mal explicadas. Retrieved August 31, 2020, from

Entorno venezolano: Politica, economia y sociedad - Julio 2020. (2020, July 30). Retrieved August 31, 2020, from

Hufbauer, G. C., Schott, J. J., Elliott, K. A., & Oegg, B. (2019). Economic sanctions reconsidered. Washington, DC: Peterson Institute for International Economics,

Monaldi, F. (2018, August 17). La implosión de la industria petrolera venezolana. Retrieved August 31, 2020, from

Pape, R. (1997). Why Economic Sanctions Do Not Work. International Security, 22(2), 90-136. doi:10.2307/2539368, from

Peksen, D. (2009). Better or Worse? The Effect of Economic Sanctions on Human Rights. Journal of Peace Research, 46(1), 59-77. Retrieved August 30, 2020, from

Rodriguez, F. (2020, January 27). The Impact of U.S. Sanctions on Oil Production and the Humanitarian Emergency in Venezuela. Retrieved August 31, 2020, from

[1] Transcript: The Future of Venezuela: A Conversation with Special Representative Elliott Abrams. Retrieved August 31, 2020, from

bottom of page