US Sanctions over Petro

Venezuela has issued a complaint against the World Trade Organization (WTO), wherein the country criticized the US sanctions. The country was found violating the rules and regulations of WTO. The consultation request was published by WTO on January 08.

The request filed by Venezuela titled, ‘United States — Measures relating to trade in goods and services’ was originally filed on December 28. The sanctions imposed by the US against the “Venezuelan Digital Currency” was violating the country’s rights under WTO’s General Agreement on Tariffs and Trade (GATT) signed in 1994 and the General Agreement on Trade in Services (GATS).

The complaint filed by Venezuela, further reads – “The United States has imposed certain coercive trade-restrictive measures on the Bolivarian Republic of Venezuela in the context of attempts to isolate Venezuela economically.”

The development of the “Venezuelan Digital Cryptocurrency,” Petro was first announced at the end of 2017. In 2018, Venezuelan President, Nicolas Maduro launched the cryptocurrency as a medium of exchange in industries working within the country’s border.

Back in March 2018, US President Donald Trump signed an executive order forbidding citizens and residents of the country in investing or completing transactions with any digital currency associated with the Venezuelan government.

Donald Trump signed an executive order forbidding citizens and residents of the country investing in any digital currency related to the Venezuelan government.

The executive order by the President of US read –

“All transactions related to, provision of financing for, and other dealings in, by a United States person or within the United States, any digital currency, digital coin, or digital token, that was issued by, for, or on behalf of the Government of Venezuela on or after January 9, 2018, are prohibited as of the effective date of this order.”

Venezuela was in a tussle with Trump’s order, stating the US President’s order violates the Article XVIII:1 of GATS, which states that no member states of WTO shall treat financial services and service suppliers of fellow member states less favorable than other member nations.

Criticizing the US government for not recognizing Petro, the complaint read –

“Furthermore, inasmuch as digital currencies originating in the United States are not subject to the same prohibitions as Venezuelan digital currencies, the United States is according less favourable treatment to Venezuelan financial services and service suppliers than to like domestic financial services and service suppliers, in violation of Article XVII:1 of the GATS.”

Petro has been in controversies since the day it was launched in February 2018. Venezuela had introduced the cryptocurrency to garner some interest from foreign investors and avoid US and EU sanctions. Moreover, also to surmount the ongoing inflation in the country.

To respond to Venezuela’s complaint, the US now has 60 days, if failing to do so, the complainant can request to adjudication by the panel.