Alex Saab knows a lot. He understands the motivations, methods and middlemen behind Maduro’s sanctions evasion efforts. He knows the names, planes, ships and bank account numbers involved in numerous corruption scandals. He is the leading figure in Maduro’s economic relationship with Iranand Turkey and likely knows quite a bit about the activities of Russia and China in Venezuela as well.

 

Venezuela - Saab's extradition and sanctions

Unfortunately, Venezuela's most infamous money laundering and sanctions evasion expert isn't likely to spill everything he knows.

Boz

Oct 19

Alex Saab knows a lot. He understands the motivations, methods and middlemen behind Maduro’s sanctions evasion efforts. He knows the names, planes, ships and bank account numbers involved in numerous corruption scandals. He is the leading figure in Maduro’s economic relationship with Iranand Turkey and likely knows quite a bit about the activities of Russia and China in Venezuela as well.

Given everything in Alex Saab’s head (which is desperately in need of a haircut), there is obvious excitement over his extradition. Many among Maduro’s divided opposition cheered the extradition and hope that it may stop Maduro’s momentum in consolidating control over the country.

The Maduro regime’s panic is real. Their propaganda efforts to falsely defend Saab as an alleged diplomat (he’s not) aren’t just for show; they’re for survival. The regime re-arrested the six Citgo executives in order to place pressure on the US government. Maduro and his allies truly fear that if Saab decides to talk, it will give the US and Europeans the information they need to close the loopholes within the sanctions and tighten the economic pressure on the regime. Well-hidden foreign assets and bank accounts of corrupt regime insiders may be exposed to seizure.

However, like everything with the Alex Saab story, the next steps will play out much more slowly than the hype. There are no major revelations or concessions coming down the pipeline in the coming weeks. There may be a day in the coming years in which Saab flips and spills some of what he knows. But it’s not likely to happen any time soon and almost certainly won’t happen until Maduro is weaker in Venezuela. 

Maduro knows he has other leverage over Saab. Maduro forced Saab’s wife to read a letter on television, demonstrating that she is a hostage who can be harmed if Saab speaks. Saab almost certainly knows what happened to General Baduel, a man who saved Chavez after the 2002 coup was allowed to die in prison because he did not remain faithful to the revolution. While Maduro violently represses his political opponents, the worst punishments are often saved for those who betray Chavismo, a message sent to every politician and military officer as well as criminal money laundering facilitators like Saab that may consider turning on the regime.

Meanwhile, Maduro has used the extradition of Saab to delay negotiations. However, the negotiations were moving slowly and likely to face delays anyway due to the upcoming regional elections, which are likely to draw attention away from all other issues for a few weeks. It’s an excuse that has limited impact on the actual political situation. Negotiations can and should continue in the coming months, but as with the Saab extradition, nobody should expect magically rapid results.

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Nearly everything about the Saab narrative revolves around sanctions. Yesterday, the US Treasury Department issued its long awaited review of sanctions policy. The paper demonstrates a potential correct shift in policy, but it’s also light on details, depends greatly on the implementation, and gives very little direction for how the US will or should change sanctions that are already in place.

For Venezuela, that last question matters greatly. Under the new policy guidance, the US would be unlikely to issue new sectoral sanctions on debt or oil given their negative second order consequences on the population. However, rolling back sanctions already in place can always be seen as a reward to regimes that manage to outlast them, something that policymakers want to avoid. 

Still, this document should be a moment for the Biden administration to overhaul its Venezuela sanctions effort. Using the new framework, they should drop the worst and least effective parts of the sectoral sanctions while simultaneously improving enforcement on the individual sanctions against the human rights abuses and corrupt actors that certainly deserve to have their assets seized. Tightening sanctions on the individual end while loosening them on the sectoral side would help negate the message that Maduro is somehow being rewarded and demonstrate a real shift towards potentially more effective sanctions policy.

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