U.S. Imposes Broad Sanctions on Venezuelan Government

August 12, 2019Alerts

In what amounts to a nearly total economic embargo against the government of Venezuela, President Trump issued an executive order on August 5 that imposes sweeping economic sanctions designed to target the Maduro regime.

Executive Order 13884 prohibits all U.S. persons or entities (and in some instances, non-U.S. persons or entities) from engaging in virtually any transactions or dealings with the Venezuelan government, or any entity directly or indirectly owned or controlled by the Venezuelan government (such as Petroleos de Venezuela, S.A., PDV Holding, Inc., CITGO Holding, Inc., and Nynas AB), unless such U.S. persons or entities obtain the appropriate license from the Treasury Department’s Office of Foreign Assets Control (OFAC).

Unlike U.S. sanctions targeting Cuba, Iran, North Korea, Syria and Ukraine’s Crimea region, the new Venezuelan sanctions do not impose a blanket prohibition on all transactions or dealings with Venezuela or its people. Rather, because EO 13884 is geared toward targeting the Maduro regime specifically, U.S. persons or entities are permitted to engage in certain transactions and dealings so long as they do not involve blocked persons or prohibited activities or the appropriate license has been obtained.

To that end, on August 6, 2019, OFAC amended 12 pre-existing general export licenses, and created 13 new general export licenses to authorize, among others, the following transactions:

  • transactions concerning food, agricultural commodities, medicine, medicine equipment, medical services, and other humanitarian items;
  • transactions with the Venezuelan Interim President, Juan Guaidó and any of his appointees;
  • certain transactions with Venezuela’s National Assembly;
  • the processing by certain U.S. banks of fund transfers involving Venezuela that are necessary for the operating expenses or other official business of third-country diplomatic or consular missions in Venezuela;
  • transactions necessary to processing noncommercial, personal remittances involving certain financial institutions;
  • the export and re-export from the U.S. to Venezuela of services, software, hardware, and technology incident to the exchange of communications over the internet;
  • transactions involving Venezuela’s ports and airports; and
  • transactions related to telecommunications and mail, including exports of packages.

OFAC warns that in some instances, even where the appropriate license has been obtained from OFAC, U.S. persons and entities must further verify such transactions or dealings with the Commerce Department’s Bureau of Industry and Security before proceeding.