On September 25, OFAC designated four additional Venezuelan officials as “Specially Designated Nationals” (“SDNs”), blocking all of their assets and prohibiting any transaction in which they have an interest within U.S. jurisdiction. The new designations target important former and current officials in the Venezuelan government who have supported President Nicolas Maduro, whom OFAC designated on July 31, 2017. The newly designated officials include: Cilia Adela Flores de Maduro, the current First Lady and former Attorney General under Hugo Chavez; Delcy Eloina Rodriguez Gomez, the Executive Vice President and former President of the National Constituent Assembly (“ANC”); Jorge Jesus Rodriguez Gomez, the Minister of Popular Power for Communication and Information; and Vladimir Padrino Lopez, the Sectoral Vice President of Political Sovereignty, Security, and Peace. In addition, OFAC also designated a network supporting Diosdado Cabello Rondon’s “key front man,” Rafael Alfredo Sarria.
These sanctions apply to the individual officials, not to the institutions in which they hold a position, so that transactions with the Government of Venezuela and other relevant entities are not directly affected. However, OFAC has cautioned that persons acting within U.S. jurisdiction (for example, U.S. persons or persons engaged in U.S. dollar transactions) may not deal with the sanctioned officials, even in their official capacities. Thus, those acting within U.S. jurisdiction may not negotiate with sanctioned officials, enter into agreements signed by sanctioned officials, or otherwise receive services from sanctioned officials. They also must ensure that the institutions controlled by the sanctioned persons are not acting for the benefit of a sanctioned person. (For example, the Venezuelan government could not sell a Miami penthouse owned by a sanctioned person on his behalf.) If, however, the transaction does not involve the active participation of the sanctioned official, dealings with the institution in which he or she holds a position are unrestricted.
Experience with prior circumstances in which a senior official of a non-sanctioned entity was designated for sanctions indicates that the most difficult questions are likely to arise when the senior official has a known or suspected indirect role in approving or executing a transaction (though it is clear as a practical matter that something more than ultimate authority over an institution and its officials is required). Where the sanctioned official has some identifiable, specific role in approving a transaction within U.S. jurisdiction, the precise boundaries of OFAC’s interpretation of the prohibition are unclear, and advice should be sought on the particular facts and circumstances.
Please feel free to raise any question or concern you may have with any of your regular contacts at the Firm, or with Paul Marquardt in our Washington office.