On 5 March 2013 Col. Hugo Rafael Chávez Frías (1954-2013), President of the Bolivarian Republic of Venezuela (1999-2013), passed away after a long battle with cancer.[1]

During his 14 years in power he promoted a sound shift in the economic model followed by Venezuela that was inspired by the so-called Socialism of the 21st. century. This initiative had big impact in the fields of foreign trade and investment.

First, in 2006 President Chávez pulled Venezuela out of the Comunidad Andina de Naciones (Andean Community of Nations or CAN)[2] and made it join the MERCOSUR (South American Common Market).[3] The late President did not agree with CAN signing a free trade agreement with the United States of America. In addition, he helped start the Bolivarian Alliance for the Peoples of Our America (ALBA).[4]

Second, he took numerous decisions on foreign-owned investments within the territory of Venezuela:

  • On the one hand, he changed rules relating to contracts with foreign oil companies, in particular those exploring and exploiting oil in the Orinoco belt, in order to obtain bigger stakes for state-owned PDVSA.[5]
  • On the other hand, he ordered many expropriations of local and foreign-owned assets.

All these moves prompted foreign investors to file many investment treaty claims with ICSID and ad hoc arbitral tribunals.[6] Venezuela answered by denouncing ICSID Convention in 2012[7] as ALBA partners Bolivia and Ecuador had done before.[8]

The new president, once he/she is sworn in, will have the power to decide about Venezuela’s stance towards foreign trade and investment.


[1] Virtually all media in the world have given notice of his decease. See for example W. Neuman, “Chávez Dies, Leaving Sharp Divisions in Venezuela,” The New York Times, 6 March 2013, available at http://www.nytimes.com/2013/03/06/world/americas/hugo-chavez-of-venezuela-dies.html?ref=world&_r=0.

[2] On 22 April 2006 Venezuela formally denounced the Cartagena Agreement establishing the Andean Community. According to Article 135 thereof the denunciation took effect five years later. See http://www.comunidadandina.org/en/index2.aspx.

[3] The Protocol of Accession of Venezuela to the MERCOSUR was done at Caracas on 4 July 2006. It entered into force on 31 July 2012. See www.mercosur.int (in Spanish and Portuguese).

[4] ALBA is composed of Antigua and Barbuda, Bolivia, Cuba, Dominica, Ecuador, Nicaragua, Saint Vincent and the Grenadines and Venezuela. See http://www.alianzabolivariana.org/index.php (in Spanish).

[5] See http://www.pdvsa.com (in Spanish).

[6] According to ICSID’s website, as of 4 March 2013 there are 28 pending cases before ICSID against Venezuela (all registered after 2006) and an additional 8 cases have already been concluded.

[7] On 24 January 2012 Venezuela sent a notice of denunciation of the Convention to the World Bank. In accordance with Article 71 of the Convention, the denunciation took effect six months after the receipt of the notice (on 25 July 2012). See https://icsid.worldbank.org/ICSID/FrontServlet?requestType=ICSIDDocRH&actionVal=ShowDocument&language=English.

[8] On 6 September 2012 Venezuela also denounced the American Convention on Human Rights. See http://www.oas.org/en/iachr/media_center/PReleases/2012/117.asp.

Share