In recent weeks, the United Stated Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) expanded the scope of sanctions against current and former Venezuelan government officials who have supported controversial President Nicholas Maduro and his regime of corruption and human rights abuses.
The first sanctions implemented against Venezuelan individuals and entities were authorized by President Barrack Obama in March 2015 (Executive Order 13692). Following President Maduro’s re-election to a second six-year term on May 20, 2018, President Donald Trump has expanded the scope of both the prohibited conduct and the designated individuals and entities subject to sanctions.
On November 1, 2018, President Trump issued Executive Order 13850 broadly prohibiting transactions with individuals directly or indirectly involved in the deceptive and corrupt practices of the Government of Venezuela. President Trump has subsequently issued Executive Orders designating specific individuals and entities subject to the sanctions regime. On January 28, 2019, Executive Order 13857 revised the definition of “Government of Venezuela” (which is subject to sanctions) to specifically include, among others, the Central Bank of Venezuela and state-run oil company Petroleos de Venezuela, S.A. (“PdVSA”) Further, in press releases on February 15, 2019 and February 25, 2019, OFAC announced additional individuals and entities with whom transactions are prohibited. Among those named in the recent press releases are Venezuelan military and intelligence officers, the head of the Special Action Force of Venezuela’s police, the President of PdVSA, and, most recently, the Governors of four Venezuelan states that have aligned themselves with President Maduro.
The recent press releases note that sanctions “need not be permanent” and that removal of sanctions is possible for individuals who “take concrete and meaningful actions to restore democratic order, refuse to take part in human rights abuses, speak out against abuses committed by the former Maduro regime, and combat corruption in Venezuela.”
For US companies transacting across borders, it always essential to verify that their business partners are not subject to US sanctions. With the rapidly changing scope of sanctions relating to Venezula, the need to consult with experienced counsel is even greater and must continue on an ongoing basis throughout the life of a transaction of business venture.