Venezuela Files WTO Complaint To Challenge US Sanctions Against Petro Cryptocurrency

News | January 14, 2019 By:

The government of Venezuela has filed a complaint with the World Trade Organization (WTO) to challenge US sanctions, including trade-restrictive measures placed on the country’s national cryptocurrency, the petro.

Filed on December 28, Venezuela’s complaint claims that US rules on sales of gold and discriminatory treatment of Venezuela’s debt and transactions in digital currency break WTO rules.

In March 2018, US President Donald Trump signed an executive order banning any US transactions in the petro, the controversial digital token backed by Venezuela’s oil reserves. The restrictions against the petro are part of the sanctions implemented by the US to promote the overthrow of President Nicolas Maduro.

“All transactions related to, provision of financing for, and other dealing 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,” the order states.

In its WTO complaint, Venezuela said that the Trump executive order is a discriminatory coercive trade-restrictive measure that violates Article XVIII:1 of GATS, which states that no nation that is a member of the WTO shall treat financial services and service suppliers of a fellow member nation less favorably than other member nations.

“In as much 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 favorable treatment to Venezuelan financial services and service suppliers than to like domestic financial services and service suppliers,” the complaint said.

The US government has 60 days to answer Venezuela’s WTO complaint, after which time Venezuela could ask the WTO to adjudicate.

The petro was first revealed by Maduro in 2017 to overcome catastrophic hyperinflation in the country and circumvent other US sanctions. In August 2018, Maduro announced that the cryptocurrency will be used as a mandatory unit of account. The government also introduced new salary and pricing systems for goods and services that are anchored to the petro.