On August 5, President Trump issued executive order (EO) 13884 expanding sanctions in Venezuela by blocking the property of the Government of Venezuela as a whole. In connection with this step, OFAC issued 12 amended and 13 new general licenses and published interpretive guidance pertaining to the provision of humanitarian assistance and support for the Venezuelan people. According to an OFAC press release, the new EO and general licenses “allow U.S. persons to continue to provide humanitarian support to the Venezuelan people” while putting pressure on the Maduro regime.
Executive Order 13884 and FAQs
EO 13884 treats the Government of Venezuela as if it were a designated person. It covers property or interests in property that are within the United States, come within the Unites States or come within the possession or control of any U.S. person. Any such property belonging to the Government of Venezuela is blocked, as well as such property belonging to persons (i) that are determined to have “materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of” persons placed on the SDN list pursuant to this EO, and (ii) persons that are owned, controlled, or have acted on behalf of persons whose property and interests in property are blocked pursuant to this EO. Moreover, U.S. persons are prohibited from dealing in such property.
Several sections of EO 13884 demonstrate its broad reach. Section 1(c), for example, makes clear that these sanctions apply notwithstanding any contract entered into, or any license or permit granted, prior to August 5. Meanwhile, Section 4 prohibits the formation of any conspiracy or engagement in any transaction that avoids or evades the prohibitions set forth in the EO. The “Government of Venezuela” is broadly defined to include state-owned entities and “any person who has acted or purported to act directly or indirectly for or on behalf of” such entities, including as members of the Maduro regime.
OFAC’s three new FAQs (679-681) clarify the scope of EO 13884: It does not prohibit dealings with the Government of Interim President Juan Guaidó and the National Assembly or their staff; OFAC’s “50 percent” rule applies to the Government of Venezuela; and the EO does not extend or re-open any wind-down periods that were previously issued.
OFAC also made substantive amendments to three FAQs (508, 519, and 665). The first amended FAQ clarifies that previously issued EOs 13808 and 13857 should be read in conjunction with the new EO. It also notes that U.S. persons should reject transactions in cases where a newly-issued general license would allow a transaction to a blocked person, but such a transaction remains prohibited under EO 13808 (on dealings with Venezuelan debt and equity instruments). In other words, the new general licenses do not supersede EO 13808. OFAC’s second two amended FAQs discuss the general licenses and interpretative guidance that allow U.S. persons to provide humanitarian and other goods and services to the Venezuelan people without violating U.S. sanctions.
New and Amended General Licenses
Aside from one general license (General License 31) permitting certain wind-down activities through September 4, 2019, OFAC issued new general licenses covering three broad categories of activities. First, licenses have been issued to cover sector-specific transactions related to U.S. financial institutions, transportation, shipping, and communication, as well as intellectual property:
- General License 21 authorizes U.S. financial institutions to debit “normal service charges” from blocked accounts and to transfer funds between blocked accounts.
- General License 24 authorizes all transactions incident to the receipt and transmission of telecommunications and mail.
- General License 25 authorizes the export and reexport of “of services, software, hardware, and technology incident to the exchange of communications over the Internet, such as instant messaging, chat and email, social networking, sharing of photos and movies, web browsing, blogging, web hosting, and domain name registration services.”
- General License 27 authorizes certain transactions in connection with a patent, trademark, copyright, or other form of intellectual property protection.
- General License 30 authorizes transactions and activities ordinarily incident and necessary to operations or use of ports and airports.
- General License 33 authorizes receipt and payment of charges related to overflight payments, emergency landings, and air ambulance services.
Second, general licenses authorize activities related to the government’s diplomatic functions:
- General License 22 authorizes certain transactions related to Venezuela’s mission to the UN.
- General License 23 authorizes the processing of funds transfers necessary to operate third-country diplomatic and consular missions in Venezuela.
Third, general licenses authorize activities connected to other government functions that relate to the people of Venezuela and U.S. persons living in Venezuela:
- General License 26 authorizes the provision of emergency medical services and certain other medical services.
- General License 29 authorizes certain transactions pertaining to certain categories of non-government organizations, such as those supporting humanitarian relief, democracy-building, education, some non-commercial development projects, and environmental protection.
- General License 32 authorizes U.S. persons residing in Venezuela to engage in transactions that are “ordinarily incident and necessary to their personal maintenance within Venezuela, including payment of housing expenses, acquisition of goods or services for personal use, payment of taxes or fees, and purchase or receipt of permits, licenses, or public utility services.”
Prior to the issuance of EO 13884 and these new general licenses, OFAC maintained 16 general licenses related to activities in Venezuela. OFAC has amended all of these licenses aside from two related to wind-down activities, one relating to the Petroleos de Venezuela SA 2020 8.5 Percent Bond, and one relating to official business of the U.S. Government. For each of these amended licenses, OFAC has added language to indicate that activity that was authorized by them prior to the new EO continues to be authorized. Covered activity includes certain transactions with PDV Holdings, CITGO Holdings, PdVSA, Nynas AB, several banks, and international organizations.
OFAC has also taken the opportunity to add Banco del Tesoro, C.A. Banco Universal to the scope of two general licenses: 15B, authorizing transactions involving certain banks for certain entities; and 16B, authorizing maintenance of U.S. person accounts and noncommercial, personal remittances involving certain banks.