Today the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued new general licenses (GL) 3C (amending GL 3B) and GL 9B (amending GL 9A) and amended previously issued FAQ 661 and FAQ 662. The changes clarify that U.S. persons remain prohibited from purchasing or investing in listed GL 3C (GL 3C Bonds) or pre-sanctions PdVSA debt and equity (PdVSA Securities) and that OFAC’s facilitation prohibitions apply to such purchases other than (in both cases) purchases or investments that are “ordinarily incident and necessary” for divestment or transfers to non-U.S. persons. In other words, U.S. persons may purchase, invest in, or facilitate purchases and investments in GL 3C Bonds and PdVSA Securities where doing so is a necessary part of a transaction involving divestment or transfer to a non-U.S. person. OFAC further specifically noted in the revised FAQs that this authorization includes activities such as acting as custodian for U.S. and non-U.S. persons’ holdings in GL 3C Bonds and PdVSA Securities (including acting as custodian for a non-U.S. person after that person receives the securities from a U.S. person) and receipt and processing of principal and interest payments. See FAQ 661, FAQ 662. The wording is not fully clear, but the changes appear designed to reassure U.S. intermediaries in particular that they are authorized to provide services such as custody, transfer, and payment so long as no prohibited acquisition by a U.S. person is involved.
OFAC also made minor corrections to the list of GL 3C Bonds and to the GL 9B list of PdVSA Securities and made non-substantive changes to FAQ 650 conforming it to the updated General Licenses.