WASHINGTON — The Bush administration has launched a preliminary legal inquiry that could land Venezuela on the U.S. list of nations that support terrorism, following reports of close Venezuelan links with Colombian rebels, a senior government official has confirmed.
The investigation is the first step in a process that could see Venezuela join North Korea, Cuba, Sudan, Syria and Iran as countries designated by the State Department as supporters of terrorism.
U.S. laws give some leeway on what economic activity is subject to such sanctions, but experts say adding Venezuela to the list would force U.S. and even foreign firms to sever or curtail links with one of the world's largest oil producers.
The legal review comes after Colombia captured four computers belonging to a guerrilla leader in a March 1 raid into Ecuador. The documents suggest the Venezuelan government was in the process of providing $300 million to the Revolutionary Armed Forces of Colombia, or FARC.
The U.S. and Colombian governments and the European Union have officially designated FARC as a terrorist organization, but Venezuelan President Hugo Chavez has said publicly that he considers it a legitimate insurgency.
A senior U.S. official, who spoke on condition of anonymity because of the delicate nature of the subject, said government lawyers had been asked to clarify "what goes into effect in terms of prohibitions, or prohibited activities," with the state sponsor designation.
The official was reluctant to predict if the FARC computer discoveries will lead to sanctions, noting U.S. investigators first must corroborate their veracity. The lawyers have not yet returned their opinions, the official added.
But if the captured documents are shown to be true, the official said, "I think it will beg the question of whether or not Venezuela, given Chavez's interactions with the FARC, has ... crossed the threshold of state sponsor of terror."
Aware of the weighty impact of declaring a country a state sponsor of terrorism, officials say a designation occurs only after careful deliberation. Rhonda Shore, a spokeswoman for the State Department's Office of the Coordinator for Terrorism, said in an email that a government must have "repeatedly provided support for acts of international terrorism."
Venezuela already is subject to a U.S. weapons sale ban and other sanctions as a country that refuses to cooperate on terrorism matters. Chavez has established warm relations with Iran. Bush administration officials also complain that Venezuela refuses to cooperate on drug trafficking issues and has lax standards for controlling identity documents.
But declaring Venezuela a state sponsor of terrorism would take the sanctions to a much higher degree.
Such a designation "immediately imposes restrictions on the abilities of U.S. companies to work in Venezuela," said James Lewis, a former State Department arms trafficking expert now with the Center for Strategic and International Studies in Washington. "It would make it very hard for Venezuela to sell oil to the U.S."
The State Department's website cites four categories of sanctions for countries on the terror list, including restrictions on U.S. aid, a ban on weapons sales, tightened controls over items that have dual military and civilian purposes and "miscellaneous financial and other restrictions."
Lewis said the last category is "the killer." Those sanctions, often implemented by the Treasury Department's Office of Asset Control, prohibit U.S. companies and banks from dealing with countries on the list. Even non-U.S. companies are reluctant to do business with Iranian companies for fear of running afoul of U.S. sanctions, he added.
The designation could reach far beyond the oilfields. Boeing, for instance, would need to be careful in its dealings with Venezuelan airlines, Lewis added. Assets belonging to specially designated entities linked to the country could see their financial assets in U.S. banks frozen.
But Lewis and other U.S. officials cautioned that the harsh sanctions against Iran, which was declared a state sponsor in 1984, would not necessarily be replicated on Venezuela.
"There's not a standard template" for sanctions, said John Rankin, a spokesman for the Office of Asset Control.
But even a more gentle menu of sanctions would have strong economic and foreign policy implications, given Venezuela's position as the hemisphere's third largest exporter to the United States, after Canada and Mexico. In 2007, it was the fourth largest supplier of petroleum to the United States, after Canada, Mexico and Saudi Arabia. The government-owned PDVSA oil company also owns CITGO Petroleum, which has several refineries in the United States and is the country's third-largest supplier of gasoline.
Chavez, who often rails against President Bush and U.S. policies, has repeatedly threatened to cut off oil shipments to the United States in response to what he views as a possible U.S. attack against his government.
But few believe he can carry out his threat, given that he needs U.S. refineries to process his heavy crude. Chavez recently has been looking to expand his sales to places like China.