Venezuela expels U.S. envoys in response to sanctions

By Luc Cohen and Deisy Buitrago

CARACAS (Reuters) - President Nicolas Maduro on Tuesday ordered the expulsion of two top U.S. diplomats in Caracas in retaliation for a new round of sanctions over Venezuela's widely-condemned election, accusing them of a 'conspiracy' that was denied by the State Department.

The United States, European Union and most major Latin American nations have all said Sunday's vote did not meet democratic standards.

Maduro, the 55-year-old successor to Hugo Chavez, won re-election easily, but critics said the vote was riddled with irregularities, from the barring of two popular opposition rivals to the offering of a government "prize" to voters.

President Donald Trump responded on Monday with an executive order limiting Venezuela's ability to sell state assets.

Accusing U.S. charge d'affaires Todd Robinson of being involved in "a military conspiracy," Maduro ordered him and another senior diplomat, Brian Naranjo, to leave within 48 hours.

He gave no details of the accusations, but said the U.S. Embassy had been meddling in military, economic and political issues, and vowed to present evidence shortly.

"Neither with conspiracies nor with sanctions will you hold Venezuela back," Maduro said, at an event in downtown Caracas at the headquarters of the election board.

The U.S. State Department rejected Maduro's allegations that the diplomats had been involved in any kind of conspiracy, spokeswoman Heather Nauert said at a news briefing in Washington.

In an interview on Tuesday, Venezuela's Trade Minister Jose Vielma said the latest round of sanctions would have a "more serious" impact on the country's financial system.

Previous sanctions were limited to assets linked to individual Maduro administration members.

Tuesday's executive order prohibits U.S. citizens from being involved in sales of Venezuela's pending invoices related to oil and other assets, though Vielma said shipments of fuel and crude to the United States would continue.

It appears to target in part Citgo [PDVSAC.UL], a U.S.-based oil refiner owned by Venezuela state oil company PDVSA [PDVSA.UL]. More obstacles to PDVSA's ability to sell oil abroad could restrict already-dwindling foreign exchange earnings, worsening the economic crisis and pressuring Maduro.

"This attack against Venezuela, which seeks to completely strangle the country, is unheard of," Vielma said, adding that Venezuela would continue to collect on its accounts receivable.

LOW TURNOUT

Among widespread international condemnation of the vote, the European Union said in a statement on Tuesday the elections did not comply with "minimum international standards for a credible process" and repeated it would consider the "adoption of appropriate measures."

The mainstream opposition coalition boycotted Sunday's vote, calling it a sham aimed at legitimising Maduro's rule.

Maduro, whose second term will begin next January, won 68 percent of the vote. Former state governor Henri Falcon, who broke with the boycott to challenge Maduro, said he received reports of hundreds of irregularities. Turnout was less than 50 percent, compared to 80 percent in 2013.

Electoral council chief Tibisay Lucena, who is on individual U.S. and European Union sanctions lists, certified Maduro's victory in a presentation on Tuesday.

The Trump administration has also tried to convince China and Russia to stop issuing new credit to Venezuela, U.S. officials told reporters on Monday. The two countries have provided billions of dollars in funding for Venezuela in recent years.

But they appeared unlikely to heed the U.S. warnings. Beijing said on Tuesday it believed the United States and Venezuela should resolve their differences via talks, while Moscow said it would not comply with the sanctions.

In a statement on Tuesday, Venezuela's foreign ministry said the sanctions violated international law and blamed the U.S. "blockade" of the country for "blocking the population's access to basic goods."

Most mainstream economists say the country's strict currency controls, heavy state intervention and money-printing are responsible for a crisis that has caused widespread shortages of food and medicine and led to mass emigration.

(Reporting by Luc Cohen; Additional reporting by Vivian Sequera and Andrew Cawthorne in Caracas; Ben Blanchard in Beijing; Robin Emmott in Brussels; and David Alexander in Washington; editing by Andrew Cawthorne and Rosalba O'Brien)

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