OFAC Venezuela Related FAQs

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On 9 November 2017, OFAC published two new Venezuela-related Frequently Asked Questions. The first FAQ pertains to the treatment of Petroleos de Venezuela, S.A. (PdVSA) subsidiaries under Executive Order 13808 ("Imposing Additional Sanctions With Respect to the Situation in Venezuela"). The second FAQ deals with US person participation in meetings about restructuring outstanding Venezuelan and PdVSA debt that existed prior to the effective date of Executive Order 13808.

The FAQs state as follows:

US persons are generally prohibited from engaging in transactions or dealings with persons named on OFAC’s SDN List, including dealing with an SDN in the context of efforts to restructure Venezuelan and Petroleos de Venezuela, S.A. (PdVSA) debt. Provided there is no SDN involvement, General License 3 authorizes US persons to engage in all transactions related to bonds specified in the Annex to General License 3, including participating in negotiations regarding such bonds. General License 3 does not authorize any transaction by a US person or within the United States that involves the creation or subsequent dealing in new debt of PdVSA or the Government of Venezuela with a maturity of greater than 90 days or 30 days, respectively, absent a license from OFAC. OFAC would consider license applications involving any such new debt or equity on a case-by-case basis, and base licensing determinations on the facts and circumstances of the particular application. The US government would consider using licensing authority to allow US persons to deal in new debt of the Government of Venezuela approved by the democratically elected Venezuelan National Assembly.

Subsection 1(a)(i) of E.O. 13808 prohibits US persons from dealing in new debt with a maturity of greater than 90 days of PdVSA. For purposes of E.O. 13808, the prohibition in Subsection 1(a)(i) would apply to PdVSA and extend to all PdVSA subsidiaries, unless authorized by OFAC. General License 2 authorizes certain activities involving specified PdVSA subsidiaries.