Venezuela announced on Thursday it was suspending commercial ties with several Panamanian officials and companies. Among the firms targeted was regional airline Copa, one of few international carriers that was still operating in the crisis-stricken country.

The Venezuelan government's resolution prompted Panama to recall its ambassador shortly afterwards.

Read more: Venezuela: A country in meltdown

Caracas justified the decision to bar 46 Panamanian firms from operating within its borders for at least 90 days, claiming that several top-ranking officials and lawmakers, including Panamanian President Juan Carlos Varela, had been complicit in money laundering.

Watch video 01:00 UN World Food Program: 'Venezuelans are starving to death'

It also said that Panama's financial system had been leveraged by wealthy Venezuelan nationals for acts of corruption.

Venezuelan President Nicolas Maduro's regime said that individuals named in the Panama resolution "present an imminent risk to the (Venezuelan) financial system, the stability of commerce in the country, and the sovereignty and economic independence of the Venezuelan people."

Venezuela's aviation authorities also announced that all Copa flights "to and from the country" would be suspended from April 6 to protect "the Venezuelan financial system."

Read more: Venezuela: Democracy under fire

Panama attacks Maduro regime

Panama's government, announcing the withdrawal of its envoy, described Venezuela's assertions as "a political reaction lacking substance," adding that it had also ordered Caracas to recall its ambassador.

Earlier, Varela labelled the accusations as nonsensical. "We have not heard anything about breaking relations but rather about a set of supposed sanctions - it's gibberish," Varela told reporters.

Venezuela's decision suspend ties likely came in retaliation to Panama this week naming 16 Venezuelan companies and 55 individuals as being at "high risk" of money laundering and financing terrorism. Among those named were Maduro, Vice President Tareck El Aissami and Attorney General Tarek William Saab.

Venezuela on the brink The last straw In March 2017, violent protests erupted across the country in response to a Supreme Court decision to strip the legislative branch of its powers. Amid an international outcry, President Nicolas Maduro reversed the decision, but it was too late. Thousands continued to take to the streets, calling for new elections. More than 100 people were killed in clashes with security forces.

Venezuela on the brink Hunger, a growing problem The violence added to the ongoing economic and political crisis in Venezuela. Many Venezuelans spend more than 30 hours a week waiting in lines to shop, and are often confronted with empty shelves when they finally enter a store. President Maduro blames the crisis on US price speculation. The opposition, however, accuses the Socialist government of economic mismanagement.

Venezuela on the brink Health care in crisis The crisis has even affected health care in the oil-rich nation. Venezuelans often head to Colombia to collect medical supplies to send home, as seen in this picture. Hospitals across Venezuela have compared conditions to those seen only in war zones. As patient deaths rise, health officials have sounded the alarm on the rise of malaria and dengue fever.

Venezuela on the brink Power grab By July 2017, Venezuela's pro-government Constituent Assembly was established. For observers, it had all the hallmarks of a power grab. The new body adopted the authority to pass legislation on a range of issues, effectively taking away the powers of Venezuela's elected congress, which was under the opposition's control. The move drew wide international condemnation.

Venezuela on the brink The West sanctions In response to the political crisis, the United States and European Union imposed a series of sanctions against ruling officials. The US blacklisted members of the Constituent Assembly and froze all of Maduro's assets that are subject to US jurisdiction. The EU banned arms sales to the country.

Venezuela on the brink Government victorious in regional elections In October 2017, Venezuela held two votes: regional elections and elections for governors, which were long overdue. The opposition boycotted the vote, but then split, as some candidates and small parties chose to participate. This caused a deep rift within Maduro's opponents. The government went on to sweep the vote, which detractors say was unfair and heavily favored the regime.

Venezuela on the brink Debt default In November 2017, the oil-rich, cash-poor nation faced its day of reckoning. Credit ratings agencies declared Venezuela and its state-run oil company in "selective default." But Russia offered to restructure the South American country's debt to ensure Caracas pays its other creditors. US and EU sanctions, however, limited the chance of an agreement.

Venezuela on the brink Presidential elections scheduled The National Assembly announced in January 2018 that it would grant Maduro's call for snap presidential elections. The electoral authority, CNE, held the elections on May 20. The EU, the US and 14 Latin American nations warned that they would not recognize the results. The mainstream MUD opposition alliance boycotted the vote, leaving only one possible outcome.

Venezuela on the brink Maduro wins ... Maduro was re-elected to a second six-year term with about 68 percent of the vote. Turnout was only 46 percent, according to electoral authorities. However, the MUD opposition alliance put turnout at less than 30 percent. The Organization of American States (OAS) called the elections neither free nor fair.

Venezuela on the brink ... Guaido assumes power But weeks into the new year, the situation took a drastic turn. On January 23, 2019, parliament president Juan Guaido declared himself interim president of Venezuela — a move that was quickly recognized by US President Donald Trump. Maduro called it a US-backed "coup." Days later, the US sanctioned Venezuela's state oil firm, while Guaido staked his claim on the country's foreign assets.



A country on the brink

Venezuela's latest diplomatic dispute comes as the country finds itself teetering on the brink of financial default and engulfed in a devastating political and economic crisis.

The country has been gripped by hyperinflation, a lack of basic foods and medicines and skyrocketing violence for several months, prompting a mass exodus of its citizens.

The suspension of Copa flights could inflict further hardship on the Venezuelan population. The Panamanian carrier is the main airline used by passengers travelling in and out of Caracas, with flights usually fully booked weeks or months in advance.

Read more: Venezuelans launch new currencies amid economic crisis

Venezuela's political crisis has also seen it become increasingly isolated from the global community. More than a dozen other Latin American nations have taken measures against the Maduro regime.

The United States, European Union and Canada have also sanctioned Maduro and his regime's top officials, accusing them of human rights abuses and sliding Venezuela into a dictatorship.

Watch video 03:18 Share Venezuelans flee to Columbia Send Facebook google+ Whatsapp Tumblr linkedin stumble Digg reddit Newsvine Permalink https://p.dw.com/p/2tl2U Colombia worried over massive influx of Venezuelans

dm/bw (AP, AFP, dpa, Reuters)

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