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situation report

Aug 10, 2018 | 15:36 GMT

1 min read

Venezuela: Canadian Company May Seize Venezuelan Assets, U.S. Judge Rules

What Happened: A U.S. judge has ruled that Canadian mining company Crystallex may seize shares in a U.S. subsidiary of Venezuelan state oil company Petroleos de Venezuela S.A. (PDVSA), which controls Citgo, Reuters reported Aug. 9. Crystallex is seeking to attain compensation awarded to it after Venezuela's government nationalized one of its gold mines.

Why It Matters: The case could encourage more companies to file suits as they attempt to secure payment that the Venezuelan government has refused to provide. A large number of such seizures could cause more dissatisfaction within the country about how the government is handling the current economic crisis, and it could increase the chances of an eventual coup.

Background: Numerous foreign companies took the Venezuelan government and PDVSA to arbitration tribunals for expropriations and unfulfilled contractual obligations. However, Venezuela's government has refused to pay the amounts that tribunals awarded to those companies.

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