Issuance of Venezuela-related General Licenses and Associated Frequently Asked Questions

Following the signing of an agreement between the United States and the current Maduro regime in Venezuela (details are unfortunately not available), the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury has issued several new General Licenses (GLs), extended existing General Licenses with modifications, issued new or updated corresponding frequently asked questions (FAQs), and issued a new FAQ paper in this context. The actions are described in more detail below:
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#### Extension of existing licences
OFAC has extended several licenses with modifications to „remove the secondary trading ban on certain Venezuelan sovereign bonds and PdVSA debt and equity“. The affected licenses are the following:
(1) General License 3I – Authorizing Transactions Related to, Provision of Financing for, and Other Dealings in Certain Bonds: This GL replaces GL 3H in its entirety. It permits the noted (financial) transactions, including the clearing and settling of trades, involving those bonds that are outlined in the Annex to the license. Please note that the GL does NOT authorize the sale or the facilitation of a sale of named bonds to sanctioned entities or persons.
(2) General License 5M – Authorizing Certain Transactions Related to the Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond on or After January 18, 2024: This GL replaces GL 5L in its entirety. It permits noted activities involving this particular bond (Petróleos de Venezuela, S.A. 2020 8.5 Percent Bond).
(3) General License 9H – Authorizing Transactions Related to Dealings in Certain Securities: This GL replaces GL 9G in its entirety. It permits noted (financial) transactions, including the clearing and settling of trades, involving „any debt (including the bonds listed on the Annex to this general license, promissory notes, and other receivables) of, or any equity in, Petróleos de Venezuela, S.A. (PdVSA)“ which were issued prior to August 25, 2017. The license also applies to same securities of undertakings owned or controlled by PDAs (interest must be 50% or more). Furthermore, the license permits the dealing of bonds of the following two companies:
1. PDV Holdings, Inc.
2. CITGO Holdings, Inc.
provided that securities were issued prior to August 25, 2017. Again, the GL does NOT authorize the sale or the facilitation of a sale of named bonds to sanctioned entities or persons.
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#### New licences
In view of the above noted agreement, OFAC has also issued some new licenses in this context. These are:
(1) General License 43 – Authorizing Transactions Involving CVG Compania General de Mineria de Venezuela CA: Specifically, this license authorizes (financial) transactions related to named company in an effort to reduce black-market trading in gold. The license also applies to undertakings owned or controlled by CVG Compania General de Mineria de Venezuela CA (interest must be 50% or more).
(2) General License 44 – Authorizing Transactions Related to Oil or Gas Sector Operations in Venezuela: This temporary license only applies until April 18, 2024. It permits (financial) transactions with respect to PdVSA or any entity owned or controlled by such related to (as quoted)
– the production, lifting, sale, and exportation of oil or gas from Venezuela, and provision of related goods and services;
– the payment of invoices for goods or services related to oil or gas sector operations in Venezuela; ·
– new investment in oil or gas sector operations in Venezuela; and
– the delivery of oil and gas from Venezuela to creditors of the Government of Venezuela, including creditors of PdVSA Entities, for the purpose of debt repayment.
The license comes along with various restrictions as to financial institutions that may be involved in such transactions and as to the possible investors (no funds may come from Russian entities or persons).
(3) General License 45 – Authorizing Transactions Related to Oil or Gas Sector Operations in Venezuela: This license permits financial transactions for the purpose of the repatriation of Venezuela nationals to Venezuela from the „Western Hemisphere“ as they relate to Consorcio Venezolano de Industrias Aeronauticas y Servicios Aereos, S.A.
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#### New FAQs
[FAQ 1136](https://ofac.treasury.gov/faqs/1136): Can U.S. persons purchase bonds issued by the Government of Venezuela or Petróleos de Venezuela, S.A. (PdVSA) prior to August 25, 2017 on the secondary market?
FAQ 1137: For purposes of General License (GL) 45, “Authorizing Certain Repatriation Transactions Involving Consorcio Venezolano de Industrias Aeronáuticas y Servicios Aéreos, S.A.,” what countries are included in the “Western Hemisphere”?
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#### Revised FAQs
[FAQ 662](https://ofac.treasury.gov/faqs/662): What does General License 3I authorize with respect to Government of Venezuela debt, and what are the implications for U.S. and non-U.S. persons?
[FAQ 661](https://ofac.treasury.gov/faqs/661): What does General License 9H authorize with respect to Petróleos de Venezuela, S.A. (PdVSA) debt and equity and what are the implications for U.S. and non-U.S. persons?
FAQ 629: Executive order (E.O.) 13850 of November 1, 2018, „Blocking Property of Additional Persons Contributing to the Situation in Venezuela,“ authorizes the imposition of sanctions on persons operating in Venezuela’s gold sector. For purposes of this E.O., how will OFAC target those who “operate in the gold sector of the Venezuela economy or any other sector of the Venezuela economy as may be determined by the Secretary of the Treasury in consultation with the Secretary of State”?
FAQ 595: What does Venezuela-related General License 5M authorize?
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#### New FAQ document
Finally, in view of the various permissions under the new GLs, OFAC has issued a new FAQ document particularly dealing with the above noted agreement between the U.S. and Venezuela. It sets out the following five questions and answers – please note that we refrain from listing the answers at this point for clarity purposes; please refer to the document to view the answers in question:
1. What transactions did the United States government authorize in response to the political agreement of October 17, 2023 between the Unitary Platform and representatives of Maduro?
2. What does General License (GL) 44, “Authorizing Transactions Related to Oil or Gas Sector Operations in Venezuela” do?
3. When does General License (GL) 44 expire? Does the U.S. government intend to renew this GL?
4. Do the Venezuela-related sanctions suspended on October 18, 2023 affect the U.S. government’s posture on litigation brought by creditors seeking to attach assets of the Government of Venezuela in the United States?
5. Executive Order (E.O.) 13850 of November 1, 2018, “Blocking Property of Additional Persons Contributing to the Situation in Venezuela,” authorizes the imposition of sanctions on persons operating in Venezuela’s gold sector. For purposes of this E.O. and in light of the announcements on October 18, 2023, how will OFAC target those who “operate in the gold sector of the Venezuelan economy or in any other sector of the Venezuelan economy as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State”?