Sanctions compliance considerations have always been important for cryptocurrency companies, but several recent US government actions suggest regulators are increasingly focused on the intersection between digital currencies and economic sanctions.  This increased focus highlights the importance of sanctions compliance for blockchain-related companies, particularly for those considered to be US persons.

This intensified focus has been

On September 25, 2018, OFAC added six individuals, three entities, and an aircraft to the SDN list (link to press release here).  These designations appear to be motivated by a continued effort to pressure the Maduro government to change its policies.  The press release notes that, “By the end of 2018, hyperinflation in Venezuela is projected to reach over one million percent.  Three million Venezuelans will have departed Venezuela for neighboring nations to escape widespread poverty and its attendant hardships.  The Maduro regime, meanwhile, continues to pursue failed policies and financing schemes to mask the regime’s corruption and gross mismanagement. The United States has imposed sanctions on many who have profited during Venezuela’s decline[.]”  These new designations do not specifically target PDVSA or the oil and gas sector.
Continue Reading OFAC Adds Additional Names to SDN List under Venezuela Program

On May 21, 2018, President Trump issued a new executive order prohibiting certain transactions benefitting the government of Venezuela.  The order prohibits all transactions related to, provision of financing for, and other dealings in:

(i) the purchase of any debt owed to the Government of Venezuela, including accounts receivable,

(ii) any debt owed to the Government of Venezuela that is pledged as collateral after the effective date of this order, including accounts receivable; and

(iii) the sale, transfer, assignment, or pledging as collateral by the Government of Venezuela of any equity interest in any entity in which the Government of Venezuela has a 50 percent or greater ownership interest.

As is typically the case with such executive orders, the new order also prohibits “any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions set forth in this order” and “any conspiracy formed to violate any of the prohibitions set forth in this order.”
Continue Reading President Trump Issues Venezuela-Related Executive Order

On March 19, President Trump issued Executive Order 13827, which imposes the first US sanctions against a virtual currency – namely, a digital currency known as the “petro” that has been issued by the Government of Venezuela (GOV). Specifically, the executive order prohibits “all transactions related to, provision of financing for, and other dealings

On February 12, 2018, the Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) published new frequently asked questions (“FAQs”) regarding the meaning of “new debt” under Executive Order (“EO”) 13808 and the receipt of certain late payments from the Government of Venezuela (“GoV”) and Petroleos de Venezuela, S.A. (“PdVSA”).

EO 13808 prohibits “all transactions related to, provision of financing for, and other dealings in … new debt with a maturity of greater than 90 days” of PdVSA and “new debt with a maturity of greater than 30 days, or new equity, of the Government of Venezuela” by a US person or within the United States. See our previous post.

Newly published FAQ #553 defines new debt to mean “debt created on or after August 25, 2017.” The FAQ further explains that debt created prior to that date does not constitute new debt unless the terms of the debt instrument were changed on or after August 25, 2017.  Under FAQ #511, the term debt includes “bonds, loans, extensions of credit, loan guarantees, letters of credit, drafts, bankers acceptances, discount notes or bills, or commercial paper.”
Continue Reading OFAC Publishes FAQs on New Debt and Late Payments Under Venezuelan Sanctions Regime

On Wednesday, November 15 at 12:00 PM EST, Anthony Rapa will be presenting “Recent Developments in Economic Sanctions: Russia, Iran, Venezuela, North Korea, and Cuba,” a webinar hosted by Federal Publications.  As described on the Federal Publications website:

From “decertifying” the Iran deal to disputes with “Rocket Man,” the economic sanctions world has seen dizzying

In light of the continuing deterioration of the democracy and human rights in Venezuela, the Foreign Affairs Council of Ministers agreed on November 13 to adopt a first set of sanctions measures against Venezuela. These measures are reflected in two EU legal instruments, Council Regulation (EU) 2017/2063 of 13 November 2017 concerning restrictive measures in view of the situation in Venezuela and Council Decision (CFSP) 2017/2074 of 13 November 2017 concerning restrictive measures in view of the situation in Venezuela.

At this stage, the measures are not intended to cut off commerce with specific sectors of the economy in  Venezuela. Measures include:

  • A prohibition to sell, supply, transfer or export, directly or indirectly, goods and technology listed in the EU Common Military List, as well as equipment which may be used for internal repression as listed in Annex I of Council Regulation (EU) 2017/2063.  Related financial and technical assistance is also prohibited.
  • A prohibition to sell, supply, transfer or export, directly or indirectly, equipment, technology or software, as listed in Annex II of  Council Regulation (EU) 2017/2063. Related financial and technical assistance is also prohibited.


Continue Reading EU Adopts Initial Set of Sanctions Against Venezuela

On August 25, the US Government announced the publication of a new Executive Order, signed by President Trump on August 24 and effective at 12:01am on August 25, prohibiting US persons from engaging in any transactions or dealings involving “new” debt of certain maturity durations of the Government of Venezuela (GoV) and Petroleos de Venezuela, S.A. (PdVSA), as well as some existing debt of the GoV and any “new” equity of entities owned by the GoV, including PdVSA, along with paying dividends or other profits back to the GoV from GoV-owned entities.  “New” debt and equity are those instruments issued on or after 12:01am on August 25, 2017.  This adds to existing sanctions targeting certain officials of the GoV, including President Maduro, and is similar to the sectoral sanctions that the US has imposed on certain listed financial, energy and defense sector entities in Russia. 
Continue Reading US Cuts off Venezuela from Most Dollar-Denominated Financing