Treasury Issues New Licenses, Guidance for Venezuela Sanctions

The Treasury’s Office of Foreign Assets Control on Aug. 6 issued a set of Venezuela-related frequently asked questions, amended 12 general licenses, created 13 new general licenses and released a Venezuela sanctions guidance detailing which types of transactions are authorized between U.S. companies and Venezuela. The moves were in coordination with President Donald Trump’s Aug. 5 executive order that expanded certain sanctions on Venezuela.

Trump’s order outlined several sections of sanctions, including the U.S.’s policy of blocking all Venezuelan “property and interests” in the U.S. and prohibiting transactions with all blocked people or entities. Without a license, U.S. people and companies are “generally prohibited” from dealing with the Venezuelan government under the control of the Nicolas Maduro regime, OFAC said in its newly issued frequently asked questions. General License 28, issued Aug. 5, allows for a one-month wind-down period until Sep. 4 of all contracts that were impacted by the executive order.

The order does not, however, stop companies from dealing with the “interim president” of Venezuela, Juan Guaido. General License 31, also issued Aug. 5, allows certain transactions with Venezuela’s National Assembly, Guaido and others under his leadership. OFAC said other general licenses, including those allowing for wind-down periods for agreements with Petroleos de Venezuela, the country’s state-owned oil company, and Banco Central de Venezuela, the central bank, have expired.

Other new general licenses issued Aug. 5 may impact U.S. people or entities. General License 23 allows certain U.S. banks to “process fund transfers” involving Venezuela that “are necessary for the operating expenses or other official business of third-country diplomatic or consular missions in Venezuela.” General License 25 allows for 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.” General License 30 allows for transactions involving Venezuela’s ports and airports.

OFAC’s guidance emphasized that the sanctions will not stop humanitarian aid from getting to Venezuela and outlined which humanitarian-related transactions companies are allows to participate in.

“It is imperative that the international community continues to fully utilize humanitarian exemptions to ensure that food and supplies continue to flow to Venezuelans suffering from Maduro’s man-made economic crisis,” Sigal Mandelker, undersecretary for terrorism and financial intelligence, said in a statement. “Treasury regulations have and will continue to allow for unimpeded humanitarian support to the Venezuelan people, and we encourage U.S. persons to employ these authorizations to engage with those in need.”

In the guidance, OFAC said certain goods and services are not blocked by the sanctions, including food, agricultural commodities, medicine, medical equipment, medical services and other “humanitarian items.” Amended General License 4C authorizes exports and re-exports of food products, medicine and more either to Venezuela or to third countries that intend to sell the items to Venezuela, OFAC said. But the agency warned that exporters using the license as an authorization should still verify their sales with Commerce’s Bureau of Industry and Security before completing the transaction.

OFAC also said amended General License 16B authorizes transactions “necessary to processing noncommercial, personal remittances involving certain financial institutions.” The institutions include Banco de Venezuela, Banco Bicentenario del Pueblo, Banco Central de Venezuela and others. General License 24 authorizes transactions related to telecommunications and mail, including exports of packages. OFAC again advises U.S. people and companies to check with BIS before using this license.

For other transactions, OFAC said it has a “favorable” license approval policy for humanitarian-related exports and will consider licenses on a case-by-case basis. OFAC said all questions should be directed to its Sanctions Compliance and Evaluation Division at (800) 540-6322 or (202) 622-2490.