Venezuela General Licenses Contain Important Information, Guidance Lacks Substance, Lawyer Says

The Treasury Department’s most recent Venezuela-related general licenses “stop just short of a total embargo” on the country’s government, said Adrienne Braumiller, a trade lawyer and member of the Commerce Department’s Regulations and Procedures Technical Advisory Committee. Some companies will need to pay close attention to the updated expiration dates for certain general licenses, she said, and banks will be faced with a “new level of depth” to the complexity of screening their customers.

Treasury’s Office of Foreign Assets Control issued a host of new general licenses, amended others and issued a guidance on Venezuela sanctions Aug. 6 following President Donald Trump’s Aug. 5 decision to expand sanctions on the country (see 1908060048). OFAC also released a set of frequently asked questions and clarified that the sanctions do not prohibit dealing with the Juan Guaido-led opposition party and allow for certain humanitarian-related trade, including exports of certain food, agricultural products, medicine and medical equipment.

But the most significant development for U.S. companies may be the changes to expiration dates for license exceptions with Venezuela, Braumiller said. Among them is General License 28, which allows for contracts with the country to continue until Sep. 4. “Most importantly, companies will need to flag the updated expiration dates of General Licenses for some of these wind -down periods,” Braumiller said in an email.

Other general licenses and exceptions allow for trade of a wide range of humanitarian goods, but they also provide a glimpse into the U.S.’s sanctions strategy. “The carved out exceptions for humanitarian aid and Interim President Guaido’s government ... are particularly telling, as far as gauging the severity of U.S. opposition to Maduro’s regime,” Braumiller said.

But OFAC’s three-page guidance on supplying Venezuela with humanitarian-related goods may not be too useful for U.S. companies. “The bulk of companies that were doing business with [Venezuela] are not transacting for humanitarian aid reasons,” Braumiller said.

She also said the guide does not “provide necessary guidance on interpretation of the broadly defined ‘Government of Venezuela,’ or how to identify red flags on commercial transactions with private Venezuelan persons or companies. In this sense, it doesn’t provide much new substance.”