On August 24, 2017, The White House imposed a new round of economic sanctions against Venezuela.
In an Executive Order titled “Imposing Additional Sanctions with Respect to the Situation in Venezuela,” the government levied restrictions intended to “prevent U.S. persons from contributing to the Government of Venezuela’s corrupt and shortsighted financing schemes while mitigating market disruptions and harm to investors” (see U.S. Treasury Department Office of Foreign Assets Control (“OFAC”) FAQs on Sanctions and Corresponding General Licenses).
Specifically, the Executive Order bans transactions related to the following:
- new debt with a maturity of longer than 90 days of Petroleos de Venezuela, S.A. (“PdVSA”) (Venezuela’s state-owned oil and natural gas company);
- new debt with a maturity of longer than 30 days, or new equity, of the Government of Venezuela;
- bonds issued by the Government of Venezuela before the effective date of the Executive Order;
- dividend payments or other distributions of profits to the Government of Venezuela from any entity owned or controlled, directly or indirectly, by the Government of Venezuela; and
- purchasing securities, directly or indirectly, from the Government of Venezuela, other than new debt with a maturity of less than or equal to 90 days (for PdVSA) or 30 days (for other Government of Venezuela debt).
OFAC also issued four General Licenses to allow for (i) a wind-down period for contracts and other agreements that were effective prior to the Executive Order’s effective date; (ii) transactions involving CITGO Holding, Inc. (which is owned by PdVSA); (iii) dealings in certain specified Government of Venezuela bonds that would otherwise be prohibited; and (iv) all transactions that relate to “the provision of financing for, and other dealings in new debt related to the exportation or reexportation . . . of agricultural commodities, medicine, medical devices, or replacement parts and components for medical devices.”