Unpacking the Trump Administration’s Plans for Venezuela’s Oil Revenue

Since removing Venezuelan dictator Nicolás Maduro from power, President Trump has made clear that he intends to “get the oil flowing” from the hydrocarbon-rich country. What exactly this would mean in practice began to come into focus on Jan. 6, when Trump announced the following on social media:

Subsequent media reports revealed that this initial shipment of Venezuelan oil—taken from existing stores that had reached capacity during the U.S.-imposed embargo on Venezuelan oil exports—was sold to Vitol and Trafigura, two major oil trading firms based in Switzerland and Singapore, respectively, with substantial operations in the Caribbean for an estimated $500 million, with more purchases to come. On Jan. 9, Trump issued Executive Order 14,373, which appeared to set up a special mechanism for managing Venezuelan oil revenue in the United States (as well as assets related to its purchase of diluents, lighter- weight hydrocarbons that Venezuela needs to mix with its own heavy crude oil in order to transport it efficiently). Yet the initial $500 million payment was instead sent to an account in Qatar subject to U.S. supervision and control. About two-thirds of the funds have since been transferred back to banks in Venezuela, while the remainder remains in the Qatar-based account. 

In testimony before the Senate Committee on Foreign Relations on Jan. 28, Secretary of State Marco Rubio sought to frame this initial transfer as a necessary and temporary expediency, explaining:

That is a short-term fix to a short-term problem, which is [that Venezuela] w[as] literally storing oil—they brought in tankers and had tankers sitting offshore just to hold their oil. At some point, their capacity to produce was going to be shut down and their ability to generate revenue.

So, we had to move that oil very quickly. The long term plan is not those two trading companies. The long term plan is for [Venezuela] to have a normal energy program that sells directly into the market, directly to refineries and to companies that are exploiting and exploring it … [T]hose trading companies were a short-term fix for a very acute problem because we wanted to prevent societal collapse because [Venezuela] had no money for revenue.

Consistent with Rubio’s testimony, on Jan. 29 the Treasury Department issued General License Number 46, which carves an exception out of U.S. sanctions on Venezuela’s oil sector for U.S. companies to engage in certain oil-related transactions with the Government of Venezuela, its state-owned oil company Petroleos de Venezuela, S.A. (PDVSA), and related entities—but only if the payments are channeled through the U.S.-based mechanism established by Executive Order 14,373. That said, this does not necessarily preclude the Trump administration from issuing more case-specific exceptions to U.S. sanctions for other transactions, such as the specific licenses that authorized the Vitol and Trafigura sales. 

To many, Trump’s own past rhetoric about “tak[ing] the oil” and his administration’s history of self-dealing—not to mention the involvement of energy trading companies with political ties to Trump and past problems with corruption, as well as a Middle Eastern country that recently courted Trump’s favor by gifting him a luxury jet—makes this scheme suspect. Senate and House Democrats raised their concerns by issuing letters to 15 large U.S. and global banks to understand their potential involvement in processing these financial transactions, as well as to Treasury Secretary Scott Bessent and Rubio about the corruption, sanctions, and financial transparency risks posed by the arrangement. But a closer examination of the legal context shows that there is more to the Trump administration’s plan than it may seem at first blush. The main purpose of the mechanism set up by Executive Order 14,373 is to protect Venezuelan oil revenue from legal process, something that is likely necessary if Venezuela wishes to re-engage with the global oil economy. Working through Qatar, meanwhile, is a reasonable short-term solution to genuine legal challenges that Executive Order 14,373 cannot address and are likely to take the Trump administration more time to resolve—some (but not all) of which reflect internal tensions within the Trump administration’s own broader policies towards Venezuela.

Why Does Venezuelan Oil Revenue Need Protection?

Why there needs to be a special legal regime for handling Venezuelan oil revenue is not necessarily self-evident. While an extensive U.S. sanctions regime severely limits the extent to which economic actors with ties to the United States can purchase Venezuelan oil or engage in other related transactions, the executive branch can carve out exceptions more or less at its discretion.  Absent sanctions restrictions, economic transactions are free to take place through normal channels.

The special regime set up for Venezuelan assets, however, isn’t meant to address U.S. economic sanctions. Instead, it’s to help protect Venezuelan assets from another threat: judicial process, most specifically the process of “attachment” used to seize a defendant’s property or assets for use in satisfying a legal claim against them. Section 1 of Executive Order 14,373 makes this clear in noting that “the attachment or the imposition of other judicial process against [Venezuelan oil revenue] will substantially interfere with our critical efforts to ensure economic and political stability in Venezuela.” For this reason, the order declares “the possibility of attachment or the imposition of judicial process” a threat to U.S. national security and foreign policy and declares a national emergency to deal with it—prerequisites for invoking the International Emergency Economic Powers Act (IEEPA), a law that gives the president broad authority to regulate various cross-border economic relations.

This description of the threat that attachment poses to Venezuelan economic stability is not hyperbole. Today’s Venezuela is, in many ways, a textbook example of the barriers and challenges that long-isolated, heavily sanctioned countries often face when trying to re-engage the global economy—challenges amplified by Venezuela’s heavy reliance on its oil sector, which accounts for the vast majority of its export revenue. Years of economic and political mismanagement have left Venezuela with a massive sovereign debt, estimated by the International Monetary Fund to be more than $150 billion—almost twice the country’s gross domestic product. And it owes this massive debt to an extraordinarily diverse array of global creditors, including sovereign creditors (notably Russia and China), the holders of defaulted sovereign and PDVSA bonds, and multinational companies whose property the Venezuelan government expropriated. Many of these creditors have pursued legal action and secured arbitration awards or judgments in various jurisdictions around the world. Moreover, while the property of foreign governments is generally insulated from attachment by sovereign immunity protections like those provided by the Foreign Sovereign Immunities Act (FSIA) in the United States, such laws often have exceptions—for example, where assets are used for commercial purposes or immunity have been waived—that open the door to judicial enforcement. As a result, if Venezuelan assets are located in jurisdictions where arbitration awards and foreign judgments can be enforced—as in the United States and most other market economies—they may find themselves subject to attachment proceedings. Even if the claimants ultimately fail, such proceedings can tie up the assets while related litigation is resolved, depriving Venezuela of the ability to use them in the near-term.

Of course, Venezuela is not the first country to be caught in this position—and how the United States dealt with prior cases can serve as a useful benchmark for evaluating the Trump administration’s approach. Following the U.S.-led invasion and occupation of Iraq in 2003, the George W. Bush administration similarly sought to support the modernization of Iraq’s domestic oil industry as a means of funding the country’s reconstruction. But the prior regime under Saddam Hussein had spent years failing to repay creditors, violating contracts, and engaging in other commercial activities that—alongside more malevolent behavior, like kidnapping, terrorism, and torture—left the country with massive worldwide liabilities, estimated at more than $130 billion. 

The fear then was that claimants would inevitably seek to attach any Iraqi assets that fell within the jurisdiction of a country with a functional legal system in satisfaction of these claims, potentially depriving Iraq of the assets or at least making them unavailable for other uses pending the resolution of any litigation. This would make purchasing the equipment and services Iraq needed to rebuild its oil industry (among other reconstruction efforts), as well as selling any resulting oil, incredibly difficult, as both required engagement with the broader global economy. 

The George W. Bush administration’s answer to this conundrum was to use IEEPA to install extraordinary legal protections for certain Iraqi assets—specifically, for oil-related assets and revenue as well as for the so-called Development Fund for Iraq (DFI), a special set of accounts established under the control of Iraq’s central bank at the Federal Reserve Bank of New York (FRBNY). The protections (as subsequently modified) rendered these assets immune to attachment or any other judicial process in the United States for claims arising from the actions of prior regimes. By concentrating its economic activities in the United States, Iraq could use it as a safe harbor to rebuild its oil sector and otherwise act without fear of its assets being attached in legal proceedings. At the same time, the United States made these legal protections contingent upon a system of independent monitors and audits that was intended to ensure that the funds were not mishandled or diverted to corrupt purposes. Moreover, as the protections were understood to be temporary, Iraq also had an incentive—and was encouraged by the U.S. government—to settle claims, renegotiate debts, and otherwise restructure its sovereign debt in a manner that would be manageable once the protections were lifted. The protections ultimately lasted more than a decade before being wound up in 2014. 

Executive Order 14,373 largely follows in the footsteps of the DFI regime. But in a few places it goes a step further, in ways that reflect some of the unique challenges facing Venezuela—as well as some of the unique legal and policy choices made by the Trump administration.

Section 3(a) is the key operative provision of the order, as it extends extraordinary legal protections to what it calls “Foreign Government Deposit Funds,” defined as certain funds “derived from either the sale of natural resources from, or the sale of diluents to, the Government of Venezuela or its agencies or instrumentalities.” Section 3(a) deems that any efforts at attaching these Foreign Government Deposit Funds or subjecting them to other judicial processes are “prohibited, and shall be deemed null and void,” unless pursuant to a license or other authorization consistent with the order. This is essentially the same extraordinary legal protections installed as part of the DFI arrangements. That said, the Trump administration’s executive order focuses more narrowly on revenue resulting from Venezuela’s sale of natural resources. 

Notably, however, the Trump administration seems intent on structuring control over Venezuelan oil revenue somewhat differently from the DFI. Whereas the DFI centered on accounts held by Iraq’s central bank at the FRBNY, Executive Order 14,373 limits the definition of Foreign Government Deposit Funds to those “paid to or held by the United States Government in designated United States Department of the Treasury accounts or funds on behalf of the Government of Venezuela or its agencies or instrumentalities, including the Central Bank of Venezuela and [the state-owned national oil company] Petroleos de Venezuela, S.A. [(PDVSA)]” (emphasis added). Combined with section 3(b)—which uses IEEPA to prohibit any transactions in Foreign Government Deposit Funds not authorized by the U.S. government—this suggests a desire to exercise more direct control than in the DFI context. This may simply reflect a lower degree of trust in Venezuelan authorities, at least compared to the transitional Iraqi government that the United States had helped set up. As discussed below, it may also be a way to address the fact that current U.S. recognition policy makes it unclear who exactly should be acting as Venezuela’s government in regard to such assets, requiring closer U.S. control.

To some extent, the decision to hold the assets in Treasury Department accounts (which may or may not be held in the FRBNY) could also be a product of the Trump administration’s ongoing tensions with the leaders of the Federal Reserve system. Regardless, it raises questions about what statutory authority the Treasury Department has to act as a custodian for these Venezuelan funds, which don’t clearly fall within the scope of one of the specific trusts the Treasury Department is statutorily authorized to maintain. The fact that Executive Order 14,373 only cites IEEPA as relevant statutory authorization may suggest that the Trump administration views it alone as sufficient to authorize such action by the Treasury Department. 

Nor does Executive Order 14,373 stop at IEEPA. Section 4—entitled “Additional Presidential Findings and Determinations”—implicitly invokes other legal authorities that might help insulate the Foreign Government Deposit Funds from attachment. First, it issues a series of presidential determinations—including that the funds “have not been, and shall not be, used for any commercial activity”—that, if true, could help support the conclusion that they are also immune from attachment under the FSIA. Section 4(f) then asserts that any attachment or judicial process would also “interfere with the conduct of the foreign relations of the United States and undermine principles of international comity[,]” which are other factors that can sometimes lead federal courts not to entertain certain legal proceedings. 

Federal courts, not the president, are the ones who will ultimately decide whether these legal doctrines apply. But the executive branch’s views may carry weight and expressing them could deter claimants from pursuing attachment in the first place—especially when combined with section 5(b), which authorizes the Attorney General and Treasury Secretary to “assert…the sovereign immunity of the Foreign Government Deposit Funds” in any resulting litigation.

None of this means that the special legal regime set up by Executive Order 14,373 is beyond reproach. Claimants and creditors are likely to take issue with a policy that could be framed as giving Venezuela a free pass on the massive liabilities it has accumulated, including to U.S. creditors. As with the DFI, the Trump administration may need to clarify that the protections extended by Executive Order 14,373 are intended to be temporary and pair them with a (potentially years-long) effort to get Venezuela to renegotiate or settle as many of its liabilities as it can. That said, there can be little doubt that, absent such protections, it would be very hard for Venezuela to collect or store oil revenue in the jurisdictions of most major market economies—something that is almost certainly a necessary prerequisite for it to rehabilitate its oil sector and otherwise rebuild. Hence, if supporting the latter is a U.S. policy priority, then measures like Executive Order 14,373 make some sense.

But Why Are Certain Funds Being Held Overseas?

This conclusion, however, leaves what may be the most significant question about the Trump administration’s actions unanswered: if Executive Order 14,373 was in place, why did the Trump administration channel the revenue resulting from the first oil deal through Qatar? 

In explaining this decision in his Jan. 28 congressional testimony, Rubio framed it as another necessary expediency as part of the effort to provide emergency relief to Venezuela’s economy, stating:

[T]he primary reasons why it was in a third country initially until we could create the mechanism to move it to a U.S. presence is twofold.

One, we have an issue we're working through on recognition what is exactly you have to recognize a government, but we don't recognize this government, we recognize the 2015 National Assembly. So we have to find some creative way legally to meet that standard. 

The other is frankly creditors. If any of that money touched a US bank, even if it was an account in the name of the Venezuelans, it would immediately be seized upon by a number of creditors, who eventually we'll have to take care of. But in the short term, that would impede the ability of the Venezuelan authorities to receive the funds they need to operate.

Both of Rubio’s explanations carry some water, but neither is complete. While creditors are undoubtedly a concern, most wouldn’t be able to get past the extraordinary legal protections put in place by Executive Order 14,373 in U.S. courts. That said, there is one, particularly politically sensitive exception: U.S. victims of terrorism, who have gone after Venezuelan assets on the basis of the same ties designated terrorist groups that the Trump administration’s own rhetoric and legal justifications emphasize. Similarly, recognition is also a valid issue, but in large part because of a unique tension in the Trump administration’s own actions: the fact that it keeps coordinating with a Rodriguez regime that the United States does not recognize as its government—a policy Trump implemented in his first term.

Avoiding Attachment for Terrorism-Related Claims

Generally speaking, Rubio’s assertion that creditors were a major driving consideration in moving funds through Qatar misses the mark. While such creditors are undoubtedly a real threat, the Trump administration had already used IEEPA to install extraordinary legal protections for them through Executive Order 14,373. The similar protections that the George W. Bush administration set up for the DFI successfully protected them from attachment by creditors for more than a decade. There is no reason to think that Executive Order 14,373 could not do the same for Venezuelan oil assets. 

There is, however, one notable exception to IEEPA’s ability to protect against legal process: section 201 of the Terrorism Risk Insurance Act (TRIA) of 2002, which gives certain plaintiffs a near-absolute ability to attach assets in satisfaction of certain terrorism-related claims. As currently enacted, it states:

Notwithstanding any other provision of law … in every case in which a person has obtained a judgment against a terrorist party on a claim based upon an act of terrorism, or for which a terrorist party is not immune under [the FSIA’s terrorism exceptions] the blocked assets of that terrorist party (including the blocked assets of any agency or instrumentality of that terrorist party) shall be subject to execution or attachment in aid of execution in order to satisfy such judgment to the extent of any compensatory damages for which such terrorist party has been adjudged liable.

The law defines “blocked assets” to include those “seized or frozen by the United States” pursuant to IEEPA, and “terrorist party” to include both designated State Sponsors of Terrorism (SSTs) and Foreign Terrorist Organizations (FTOs), among other terrorist organizations. As a result, individuals with terrorism-related judgments against FTOs and SSTs are able to attach any assets seized or frozen under IEEPA, severely limiting the federal government’s ability to use IEEPA to protect assets from attachment. The only exception is for certain diplomatic and consular properties, and even that is contingent upon a presidential waiver.

Section 201 was a concern for policymakers when they set up the DFI, as several U.S. plaintiffs had secured terrorism-related default judgments against Iraq, which was a designated SST from 1979 through 2004. But in the wake of the U.S.-led invasion that removed Hussein from power in 2003, Congress enacted a series of statutory provisions that effectively allowed the president to waive the consequences of Iraq’s past SST status. In 2009, the Supreme Court unanimously held that these provisions rendered the consequences of SST status inapplicable to Iraq. As a result, the George W. Bush administration could use IEEPA to install DFI protections for Iraqi oil revenue without making the same assets subject to attachment for terrorism-related claims against Iraq under section 201 of TRIA. 

By contrast, Venezuela is not and never has been a designated SST. But the Maduro regime is alleged to have maintained close ties to various FTOs. Specifically, the superseding indictment against Maduro accuses him and his regime of conspiring with a number of designated FTOs to engage in narco-terrorism, including Fuerzas Armadas Revolucionarias de Colombia (FARC) and Ejército de Liberación Nacional (ELN), two Colombian groups that have been designated FTOs since 1997, as well as several of the narcotics smuggling organizations that the Trump administration designated as FTOs last year, such as Tren de Aragua (TdA), the Sinaloa Cartel, and Cartel del Noreste (CDN). Several U.S. national plaintiffs have secured (frequently default) judgments against FARC and these other groups, often for hundreds of millions of dollars in damages. Additional plaintiffs may be in a position to do so moving forward, particularly in relation to the groups the Trump administration has more recently designated as FTOs. 

Normally, the sorts of ties that are alleged to exist between these various FTOs and Venezuela wouldn’t be enough to allow those holding judgments against one to attach the assets of the other. But a number of federal courts have taken a broad view of how section 201 of TRIA defines an “agency or instrumentality” of a “terrorist party,” such as a FTO. Specifically, both the U.S. Court of Appeals for the Second Circuit and the Eleventh Circuit have held that the definition can include entities that have simply “materially assist[ed]” or “play[ed] a significant role” in a terrorist party’s activities. Several federal district courts have since applied this standard to allow claimants holding judgments against FARC to satisfy them by attaching the frozen assets of PDVSA and various subsidiaries and affiliates, on the logic that the Maduro regime’s involvement in FARC’s money laundering and other activities makes them each an “agency or instrumentality” of it for the purposes of section 201. Other plaintiffs could presumably make similar arguments about several of the other FTOs the Maduro regime is accused of associating with.

As a result, while the executive branch may be able to use IEEPA to protect Venezuelan oil revenue from attachment in relation to commercial claims, it cannot do the same for terrorism-related claims against FARC and other FTOs. Instead, to keep Venezuela’s oil revenue from being diverted to the holders of terrorism-related judgments (or tied up in related litigation), the Trump administration has to do something more dramatic: remove them from the reach of U.S. courts altogether by holding them overseas.

Notably, this isn’t the first time in recent memory that the executive branch has settled on such a strategy. After the second Taliban takeover of Afghanistan in August 2021, U.S. claimants holding billions of dollars in terrorism-related judgments against the Taliban sought to enforce them against Afghan central bank assets held in the FRBNY under TRIA section 201. The Biden administration ultimately moved half of the remaining central bank assets out of the country to  a private trust in Switzerland and deposited the funds at the Bank for International Settlements in order to insulate them from such proceedings and preserve them for the Afghan people. As of an August 2025 State Department report to Congress, the “fund ha[d] not made any disbursements…beyond administrative expenses.” Litigation over the half of the assets still in the United States, meanwhile, remains ongoing. 

If the Trump administration wishes to begin moving Venezuelan oil revenue through the United States—as Rubio has suggested and Executive Order 14,373 and General License 46 anticipates—it will need to find a way to address these terrorism-related claims. Past practice points to three possible ways of doing so.

The first would be to seek a legislative solution from Congress, just as the George W. Bush administration once did with Iraq. That said, the political prospects for such legislation—particularly given the narrow margins of Republican control in Congress and the Trump administration’s failure to secure congressional buy-in before removing Maduro—is uncertain at best. At a minimum, it would likely require a substantial expenditure of political capital that the Trump administration may prefer to spend elsewhere.

A second option would be for the Trump administration to push Venezuelan authorities to settle directly with U.S. terrorism-related claimants on mutually agreeable terms. But arriving at such terms can be a time-consuming and expensive proposition. Or alternatively, the Trump administration may simply accept that Venezuela is going to have to deal with efforts at attachment by terrorism-related plaintiffs—something that might have been an issue if it wanted to move the initial $300 million into Venezuelan banks quickly, but could be more acceptable if the volume of oil revenue flowing through the mechanism ends up dwarfing potential terrorism-related claims. 

Third, Trump could use what is known as the president’s claim settlement authority and settle the claims himself. Under international law, states may “espouse” claims that their nationals have against other states and settle them on whatever terms they deem appropriate. The Supreme Court has in turn held that the president has the inherent constitutional and implied statutory authority to do the same, subject to certain potential constitutional limitations. In several prior cases (including post-2003 Iraq), the U.S. government has used this authority to resolve claims that U.S. nationals have against foreign governments (including terrorism-related claims) through bilateral claims settlement agreements. These generally entail a substantial lump sum payment by the country in question to the United States, which then takes responsibility for distributing it to individual claimants through mechanisms such as the Foreign Claims Settlement Commission. Perhaps the $200 million still sitting in the Qatar account is being held for such a purpose. These efforts can be politically fraught, particularly if claimants do not feel that the executive branch has negotiated an adequate settlement amount. But it can also be the most efficient way to secure actual compensation for aggrieved U.S. nationals while removing a substantial obstacle to U.S. foreign policy objectives.

Whichever of these solutions the Trump administration ultimately pursues, it will take time. And if one takes Rubio at his word, this is not something the Trump administration felt it had if it wanted to help alleviate Venezuela’s dire economic situation. Instead, routing the money overseas instead of through the United States may have been the most straightforward way to avoid these obstacles.

Delaying the Resolution of Recognition Issues

The second explanation Rubio offered for routing the funds overseas—that of recognition—reflects an even more complicated aspect of U.S. policy towards Venezeula. Moreover, it’s one whose complications Trump is uniquely responsible for—and that he and his administration have yet to squarely confront. 

When Rubio discusses “recognition,” he means the official acts by which a legal regime determines which regime is the government of a state and thus has the legal authority to exercise its international legal rights and obligations on that state’s behalf. As a matter of international law, whatever regime is in “effective control” of a state—classically defined to mean that a regime is “sufficiently established to give reasonable assurance of its permanence, and of the acquiescence of those who constitute the state in its ability to maintain itself, and discharge its internal duties and its external obligations”—is generally considered to be its (what is often called de facto) government. But individual states retain discretion over who they recognize as that state’s (often called de jure) government for purposes of their own domestic laws and policies.

At times, a foreign state may recognize an opposition movement or government-in-exile as a state’s de jure government, allowing it to exercise certain official functions on that state’s behalf within the recognizing state’s jurisdiction, even if the de jure government in question is not in effective control of the state it claims to represent. Such an approach can risk compliance with the recognizing state’s own international legal obligations, particularly if it allows a de jure government to take certain actions that only de facto governments are generally permitted to do as a matter of international law. But where that line lies is poorly defined.

In the United States, the president exercises exclusive authority over the recognition of foreign states and governments, though Congress (among other institutions) can sometimes bear on the legal consequences that flow from official U.S. recognition policies. Both federal and state courts in the United States defer to the executive branch on the former, and that in turn generally (but not always) determines the latter. Most other countries adopt a similar division of labor on recognition issues, though not all do.

In the case of Venezuela, official U.S. recognition policy—and that of many other countries—has gotten immensely complicated in recent years. No one disputes that the United States recognized the Maduro regime as the government of Venezuela from his election in 2013 through at least 2017. Some federal courts have concluded that the United States ceased to recognize the Maduro regime as the de jure government of Venezuela as early as August 2017, based primarily on an official State Department press statement that described the opposition-led National Assembly elected in 2015 as “the only legitimate legislative body” in the country. But this conclusion may be erroneous: The press statement in question addressed efforts by Maduro’s supporters to form an alternate legislature in the form of the Constituent Assembly, but did not address the Maduro regime itself. And in subsequent official statements, the State Department continued to refer to the Maduro regime as the “Government of Venezuela” through at least December 2018, suggesting continued de jure recognition.

The United States did, however, indisputably cease to recognize the Maduro regime as the government of Venezuela no later than Jan. 23, 2019. That day, President Trump formally announced that he was instead recognizing the then-head of the opposition-controlled National Assembly, Juan Guaido, as Venezuela’s interim president. Guaido’s claim to this role—which was supported by the National Assembly as a whole—was premised on the argument that the presidential term Maduro had been elected to in 2013 had come to an end in early 2019, the 2018 elections Maduro had purported to win were inconsistent with the country’s 1999 constitution, and that, in the absence of a validly elected president, the same constitution assigns the role of interim president to the leader of the country’s National Assembly, who was then Guaido. At the urging of the Trump administration, a number of other countries followed the United States’ lead and similarly recognized Guaido in the weeks that followed, including most traditional U.S. allies in Asia, Europe, and the Western Hemisphere.

Despite his role in the National Assembly, Guaido’s administration did not control any Venezuelan territory or governmental institutions, which remained in the hands of the Maduro regime. But de jure recognition by foreign governments gave his administration control over much of Venezuela’s overseas property, as well as many of its diplomatic missions and overseas state-owned entities—at least those located in countries that now recognized him as Venezuela’s new interim head of state. This included U.S.-based elements of PDVSA, the control of which became the subject of litigation in U.S. courts.

In early 2023, however, the National Assembly—the current membership of which was originally elected in what are widely seen as Venezuela’s last fair elections in 2015, but has continued to operate due to serious doubts regarding the credibility of subsequent elections and in spite of the Maduro regime’s efforts to replace it with a different, loyalist-oriented legislative body—voted to end the interim government and transfer several of the core functions Guaido was filling to other institutions. The Biden administration subsequently shifted U.S. recognition policy to focus on the 2015 National Assembly as the “only legitimate branch of the Government of Venezuela,” leading U.S. federal courts to view its assignees as having the authority to fill various governmental functions, including control over U.S.-based Venezuelan assets and interests. This remained true even after Venezuela’s July 2024 elections, which Maduro claimed to win but that most observers rejected as too flawed to be credible. The Biden administration observed that “overwhelming evidence” supported the conclusion that opposition candidate Edmundo Gonzalez Urrutia—who ran in place of opposition leader Maria Corina Machado after she was disqualified by Maduro-controlled election authorities—“received the most votes,” and later described him as “president-elect.” But it stopped short of recognizing him as Venezuela’s de jure head of state or giving him the sort of authority that Guaido had exercised during his time as interim president.

The Trump administration appeared to maintain this position prior to Maduro’s removal. While officials sometimes referred to Gonzalez as “Venezuela’s rightful president,” the administration did not take steps to give him control over Venezuela’s U.S.-based assets or diplomatic properties, as the first Trump administration did for Guaido in 2019. Instead, U.S. federal courts generally continued to treat the Biden administration’s recognition of the National Assembly as operational—a position the Trump administration did not take steps to correct.

Since Jan. 3, however, who the United States recognizes as Venezuela’s government has become even less clear. The Trump administration is openly coordinating with the new Rodriguez regime and appears to have tacitly acknowledged it as the de facto authority in effective control of Venezuela. This includes securing its consent to the sale of Venezuelan oil and depositing the resulting revenue in the U.S.-managed account in Qatar, both of which Rubio indicated were done pursuant to a written agreement with the Rodriguez regime in his Jan. 28 testimony. But the Trump administration has not yet taken clear steps to shift de jure U.S. recognition back to the Rodriguez regime, which it still routinely refers to as “interim authorities,” not Venezuela’s government. As a result, federal courts appear to still be operating on the understanding that the prior recognition of the 2015 National Assembly remains operational, allowing its designees—not those of the Rodriguez regime—to make decisions on behalf of PDVSA and other Venezuelan interests and assets in the United States. Rubio verbally confirmed that this remains official U.S. policy in his recent testimony. 

This uncertainty around recognition could substantially complicate efforts to use Venezuelan oil revenue for reconstruction or other purposes. The president may use IEEPA to freeze Venezuelan assets in place and prevent them from being expended without U.S. permission. Indeed, the Trump administration has done exactly this to cover Venezuelan oil revenue through section 3(b) of Executive Order 14,373, no doubt in part because of the uncertainty about which Venezuelan regime can control such assets in the United States. But the president cannot clearly use IEEPA to transfer such funds to a third-party—as would be necessary to spend them or engage in economic transactions—as this transfer of title would arguably constitute the sort of “vesting” that IEEPA is generally understood not to permit outside of wartime. And Rubio was adamant in his Jan. 28 testimony that conditions with Venezuela did not constitute wartime, despite certain administration actions arguably to the contrary. Any reliance on provisions of IEEPA allowing for seizure in wartime could also lead to a legal challenge and judicial review of the administration’s actions—something it has tried to avoid in other contexts. Consequently, while funds may flow into the mechanism set up by Executive Order 14,373, some degree of consent from both the 2015 National Assembly (to authorize expenditures from U.S. accounts) and the Rodriguez regime (to facilitate ongoing sales and to implement funded measures within Venezuela) will likely be needed to spend it productively so long as current U.S. recognition policies remain unchanged.

There are certain steps the Trump administration could take to ameliorate this situation. Another statute—section 25B of the Federal Reserve Act—allows the executive branch to give both Federal Reserve banks and federally insured private banks a strong incentive to follow the directives of whomever the secretary of state certifies as a foreign government’s representative, even when that may not align with U.S. recognition policy. The Biden administration notably used this authority in 2022 to empower two former officials of the Islamic Republic of Afghanistan government that had since been overthrown by the Taliban to authorize the transfer of Afghan central bank funds to a Swiss trust. That said, such use in the Venezuela context could be in some tension with the statutory language and may lead to legal challenges, especially if used in a more sustained fashion and over a longer period of time.

Legally, an easier and more straightforward solution would be for the Trump administration to simply change U.S. recognition policy, shifting U.S. de jure recognition to the Rodriguez regime that has effective control of Venezuela. Such a step is almost certainly within Trump’s sole authority as president. But doing so poses real political challenges, as it would be a high-profile repudiation of Trump’s own past rhetoric and actions towards the 2015 National Assembly. Various members of Congress with ties to the Venezuelan opposition—including many members of Trump’s own Republican Party—are likely to object to such a move. So would many of those U.S. allies who followed the United States in recognizing Guaido in the first place.

A more politically palatable solution may be to negotiate some arrangement in which both the 2015 National Assembly and the Rodriguez regime consent to certain uses of the Venezuelan oil revenue. Despite their disagreements, both support reconstructing Venezuela and addressing the dire economic situation there, and other concessions, such as a clear plan towards a democratic transition, could bridge the differences between the two. But even if the Trump administration is interested in such a solution, it will take time to negotiate.

However the Trump administration ultimately seeks to resolve these inconsistencies, holding at least some of Venezuela’s oil revenue overseas—where U.S. recognition policy does not complicate their disposition—buys the Trump administration time. This reprieve may be a short one, as at least one U.S. federal court adjudicating litigation relating to PDVSA has already asked the Justice Department to clarify which of the Venezuelan regimes it views as the state’s government for purposes of who gets to control PDVSA by Feb. 11. Past experience, however, the Trump administration will likely be able to secure extensions as it navigates the tensions within its own recognition policies towards Venezuela.

So Why Qatar?

Potential complications arising from section 201 of TRIA and U.S. recognition policy may explain why the Trump administration sought to keep the initial $500 million in Venezuelan oil revenue overseas instead of bringing it into the United States. But this leaves one last question unanswered: Why channel the funds through an account in Qatar?

For many, the choice of countries itself may seem suspect. To some, Qatar’s government is among those that have been most obsequious in pandering to Trump and his administration, most notably by gifting him a luxury jet. Others view Qatar as strategically aligned with the Muslim Brotherhood and other political movements that they see as anathema to U.S. foreign policy interests. Both sides are no doubt suspicious of the $100 billion that the Qatari government has reportedly spent on a U.S. influence campaign over the past several decades. 

Examining past U.S. practice, however, makes the choice less surprising. Despite complications, Qatar has served as a mediator and strategic intermediary between the United States and rival parties in addressing geopolitical crises spanning Afghanistan, Iran, Gaza, Russia, and Syria—as well as Venezuela. This in part reflects a degree of U.S. confidence in its relations with Qatar, which hosts al-Udeid Air Base, the largest U.S. military presence in the Middle East, and has done so for more than three decades across Democratic and Republican administrations. But it also reflects the fact that Qatar also maintains credible relations with groups often seen as hostile to U.S. interests, such as Hamas, Iran, and the Taliban. While these latter ties are seen as suspect to some, they allow Qatar to play the role of a convenient broker in various conflicts and contexts. Indeed, after the fall of Kabul in August 2021, Alex Zerden identified Qatar as a logical intermediary for the complex and politically sensitive cross-border financial flows that would be needed to address Taliban-controlled Afghanistan’s dire economic and humanitarian situation—a role it has since come to serve. 

Qatar is also less likely to be affected by legal complications arising from Venezuela’s unique circumstances than potential foreign jurisdictions. While Qatar has recently adopted a modernized legal framework for enforcing foreign judgments, its application substantially hinges on reciprocity, which remains a major obstacle to enforcing foreign judgments in ways that it may not be in more creditor-friendly jurisdictions. The involvement of foreign sovereigns can also weigh against the enforcement of both foreign judgments and arbitral awards. Moreover, like many foreign countries, Qatar applies a broader vision of sovereign immunity than the United States, meaning many (particularly terrorism-related) claims that may be enforceable against Venezuelan assets in the United States are unlikely to be recognized there. Perhaps most importantly, unlike most countries in Europe and the Western Hemisphere, Qatar does not appear to have ever shifted its de jure recognition policy away from the Maduro (now Rodriguez) regime to the 2015 National Assembly. Hence, while holding Venezuelan assets in other jurisdictions may raise similar recognition complications as in the United States, that is unlikely to be the case in Qatar. 

What really sets Qatar apart from other potential foreign jurisdictions, however, may be something even simpler: It’s successfully played this role before. In early 2023, the Biden administration agreed to authorize a $6 billion transfer of Iranian oil proceeds that had been frozen in South Korean banks pursuant to U.S. sanctions in exchange for the release of five U.S. hostages, but on the understanding that the funds would only be used for humanitarian purposes. To facilitate this arrangement, the United States authorized the South Korean banks to transfer the funds to two smaller intermediary Qatari banks, which would make payments directly to vendors of humanitarian and other authorized goods, instead of transferring the funds to the Iranian government. According to senior U.S. officials, the Treasury Department exercised “strict oversight” and had “visibility into how [the funds] [we]re used, and … the ability to police their use”—supervision that would require the cooperation of Qatari authorities. When the United States opted to pause the deal following Hamas’s Oct. 7, 2023, attack on Israel, Qatar cooperated in doing so. And despite pressure from Iran, the funds appear to remain frozen. This experience may well have given Treasury Department officials confidence that Qatari authorities would be able and willing to help facilitate similar U.S. supervision and control of incoming Venezuelan oil revenue. Being able to work through Qatar National Bank, as is reportedly happening, would likely amplify this confidence, as it is a major global financial institution (partially owned by the Qatari government) with extensive ties to the U.S. financial system. 

Of course, other countries may have been in as good if not better a position to play the role that Qatar ended up playing. But if one takes Rubio at his word that the administration was acting quickly to try and address a crisis, it’s not surprising for policymakers to turn to familiar partners and processes instead of reinventing the wheel. Doing so in this case could reasonably have led to Qatar.

* * *

As suspect as it may seem, the Trump administration’s handling of Venezuela’s oil assets follows a familiar policy logic. If the Trump administration wants Venezuela to be able to use its oil revenue to rebuild its oil sector, it needs to protect it from Venezuela’s numerous creditors’ efforts to collect. In the long term, this may be achievable through the U.S.-based mechanism established by Executive Order 14,373. But when it came to the first, urgently needed tranche of Venezuelan oil revenue, Congress’s decision to strip the executive branch of the ability to insulate Venezuela from terrorism-related claims—as well as tensions within the Trump administration’s own recognition policies towards Venezuela—made that mechanism an unsuitably risky one. Channeling the initial transaction overseas bought the administration time to resolve these issues—and the need to do so quickly could understandably have led to Qatar as a familiar place for doing so.

None of this means that the Trump administration’s actions are beyond reproach. Creditors and claimants have legitimate grounds for objecting that Venezuela is being given an apparent free pass on the massive funds it indisputably owes them, especially as no mention has been made of Executive Order 14,373 and other measures being permanent or of any long-term plan to push Venezuela to renegotiate or settle its outstanding debts. Moreover, the Trump administration has been tight-lipped about the sort of supervision and accountability it will pursue to oversee and manage these funds. The DFI incorporated robust independent monitoring and accounting procedures, and was still accused of channeling large sums into unknown hands for potentially corrupt purposes. By contrast, Executive Order 14,373 makes no mention of any such mechanisms, and the only oversight for the funds in Qatar appears to be a “retrospective audit” Rubio promised in his recent congressional testimony. Nor is it clear what legal authority the Treasury Department has for asserting direct control over Venezuelan oil revenue, instead of allowing Venezuela to retain it—or why it is necessary for the United States to do so. And that is before one even considers the various major policy maneuvers—such as a change in U.S. recognition policy towards Venezuela, a claims settlement agreement with Venezuela over terrorism-related claims, and possible requests for supporting legislation—that past U.S. practice suggests may yet be on the horizon.

All of these items warrant further scrutiny by the media, Congress, and other concerned parties. And the Trump administration’s own shameful record of self-enrichment makes such scrutiny all the more important, as there is still room in these arrangements for genuine corruption. But at its highest level, the contours of the Trump administration’s policy towards Venezuelan assets follow a familiar and reasonable policy logic. Hence, such scrutiny may be better focused on how those policies are actually implemented in practice.