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UPDATE 1-Crystallex would need sanctions waiver to seize Citgo shares -Guaido adviser

Luc Cohen

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CARACAS, July 31 (Reuters) - Canadian gold mining company Crystallex would need to request a license to U.S. sanctions on Venezuelan state oil company PDVSA before seizing shares in its U.S. subsidiary, Citgo, an adviser to Venezuelan opposition leader Juan Guaido said on Wednesday.

On Monday, a U.S. court ruled that Crystallex International Corp could attach Citgo shares to collect on a $1.4 arbitration award as compensation for Venezuela's expropriation of its mining assets in the country.

But the United States slapped sanctions on PDVSA in January as part of its bid to choke off government revenue and pressure socialist President Nicolas Maduro to step down, which the adviser, Alejandro Grisanti, said would complicate any effort to seize Citgo shares.

The ruling "clearly establishes that Crystallex will need a license to be able to execute the asset," Grisanti, also a member of a parallel ad-hoc board of directors Guaido appointed to PDVSA, said in a telephone interview.

In the ruling, Third District Court of Appeals Judge Leonard Stark wrote that any effort to attach PDVSA's shares in Citgo's parent company "would likely need to be authorized by the Treasury Department."

Guaido in January invoked Venezuela's constitution to assume an interim presidency, arguing Maduro is usurping the presidency based on a fraudulent 2018 election. He has been recognized as Venezuela's rightful leader by dozens of countries, including the United States.

Maduro calls Guaido a U.S. puppet seeking to oust him in a coup. Referring to the Crystallex case in a television broadcast on Wednesday, Maduro's Executive Vice President Delcy Rodriguez said the government would take steps to "protect Venezuelans' legitimate rights."

Neither Crystallex nor the Treasury Department immediately responded to requests for comment. Monday's court ruling cited a Crystallex statement saying it "will seek clarification" on the license.

Crystallex is not the only threat to Venezuela's ownership of Citgo. PDVSA pledged half of Citgo's shares as collateral for its 2020 bond, and failure to make a $913 million payment due in October could allow bondholers to attempt to seize Citgo.

The other half of Citgo's shares was pledged as collateral for a $1.5 billion loan granted by Russia's Rosneft.

Grisanti said his representatives in the United States had requested the Trump administration issue an executive order protecting Citgo from seizure. No such order has been granted.

"We want the American government to understand that the worst that can happen for the end of the usurpation is to not protect Venezuela's assets," he said.

(Reporting by Luc Cohen Editing by Marianna Parraga and Susan Thomas)