On October 18, 2023, the U.S. Department of the Treasury, Office of Foreign Assets Control (“OFAC”) issued a number of general licenses easing sanctions targeting Venezuela. The general licenses authorize: (i) U.S. persons to purchase bonds issued by certain Venezuelan government entities prior to August 25, 2017 on the secondary market, (ii) transactions related to oil and gas sector operations in Venezuela for a six-month period, and (iii) transactions with the Venezuelan state-owned gold mining company. OFAC also issued additional guidance, including Frequently Asked Questions (“FAQs”) relating to these general licenses.
The general licenses were issued in response to the signing of an electoral roadmap agreement between Venezuela’s Unitary Platform and the Maduro regime, and the Treasury Department noted that it is prepared to amend or revoke authorizations at any time “should representatives of Maduro fail to follow through on their commitments.”
Trading Ban Lifted
OFAC amended General Licenses 3H and 9G, which authorized the trading of certain bonds issued by the Government of Venezuela, Petróleos de Venezuela, S.A. (“PdVSA”), and subsidiaries prior to August 25, 2017, but prohibited divestment of such bonds to U.S. persons. The amended General Licenses 3I and 9H no longer prohibit divestment or transfer of such bonds to U.S. persons. As a result, U.S. persons are no longer prohibited from selling such bonds to U.S. persons.
In making this change, OFAC stated that it believed allowing U.S. persons to purchase the bonds would “have the positive effect of displacing nefarious players in this market, and with negligible financial benefit to the Venezuelan regime”. Notably, and contrary to certain press reports, the relevant authorizations of secondary trading in amended General Licenses 3H and 9G do not include an expiration date (unlike the authorization relating to oil and gas sector operations discussed below) and remain effective indefinitely absent affirmative action by OFAC.
Oil and Gas Sector
General License 44 authorizes certain transactions that are related to oil or gas sector operations in Venezuela through 12:01 a.m. eastern daylight time, April 18, 2024, including transactions involving PdVSA. However, OFAC indicated that the U.S. government intends to renew General License 44 only if “the representatives of Maduro follow through with their commitments and take continued concrete steps toward a democratic election by the end of 2024.”
General License 44 effectively authorizes most oil and gas sector operations in Venezuela, including the sale of oil and gas from Venezuela to the United States and other jurisdictions, as well as the payment of taxes, royalties, costs, fees, dividends, and profits related to oil and gas sector operations or transactions involving PdVSA. General License 44 provides a non-exhaustive list of transactions covered by the authorization, including: (1) the production, lifting, sale, and exportation of oil or gas from Venezuela, and provision of related goods and services; (2) the payment of invoices for goods or services related to oil or gas sector operations in Venezuela; (3) new investment in oil or gas sector operations in Venezuela; and (4) the delivery of oil and gas from Venezuela to creditors of the Government of Venezuela, including creditors of PdVSA entities, for the purposes of debt repayment.
General License 44 does not authorize (1) transactions with any blocked financial institutions other than Banco Central de Venezuela or Banco de Venezuela SA Banco Universal; (2) transactions prohibited by sanctions related to the Russian Federation or certain other sanctions provisions, as well as transactions involving parties that are, or are owned, controlled, or in a joint venture with, Russian persons; (3) transactions prohibited by Executive Order 13827 (relating to the Petro or other similar virtual assets) or Executive Order 13835 (relating to debt that is owed to the Government of Venezuela, as well as certain transactions involving any equity interest in any entity in which the Government of Venezuela has a 50 percent or greater ownership interest); (4) the unblocking of any blocked property or (5) transactions involving any person blocked pursuant to a sanctions authority other than the Venezuelan sanctions.
Separately, although General License 44 allows for the delivery of oil and gas from Venezuela to creditors for the purposes of debt repayment, OFAC has confirmed that General License 44 does not change its posture on litigation brought by creditors seeking to attach assets of the Government of Venezuela in the United States. Indeed, although creditors may file for writs of attachment withouta specific license from OFAC, a license would still be required for the enforcement of any lien, judgment, or other order through execution, garnishment, or other judicial process purporting to transfer or otherwise alter or affect property or interests in blocked property of the Government of Venezuela (including PdVSA).
General License 43 authorizes certain transactions involving CVG Compania General de Mineria de Venezuela CA (“Minerven”), the Venezuelan state-owned gold mining company, or any entity in which Minerven owns, directly or indirectly, a 50 percent or greater interest. However, General License 43 does not authorize transactions with any blocked persons not involving the Government of Venezuela.
OFAC stated that General License 43 would have the effect of reducing black-market trading in gold.
Additionally, although Executive Order 31850 authorizes the imposition of sanctions on persons operating in Venezuela’s gold sector, OFAC stated that, “[g]iven recent positive steps taken towards competitive elections in Venezuela, OFAC does not intend to target any person solely for operating in the gold sector of the Venezuelan economy,” and that this policy is “contingent on continued concrete steps toward a democratic solution in Venezuela.”
Repatriation of Venezuelan Nationals
In addition to the above actions, OFAC separately issued General License 45 authorizing certain transactions that are ordinarily incident and necessary to the repatriation of Venezuelan nationals from non-U.S. jurisdictions in the Western Hemisphere to Venezuela, and are exclusively for the purposes of such repatriation, involving Consorcio Venezolano de Industrias Aeronauticas y Servicios Aereos, S.A. (“Conviasa”), or any entity in which Conviasa owns, directly or indirectly, a 50 percent or greater interest. General License 45 does not authorize transactions that are otherwise prohibited by sanctions laws, transactions with any blocked persons other than transactions involving the Government of Venezuela.
 See FAQ 1136 and the document “Frequently Asked Questions Related to the Suspension of Certain U.S. Sanctions with Respect to Venezuela on October 18, 2023.”
 See “Frequently Asked Questions Related to the Suspension of Certain U.S. Sanctions with Respect to Venezuela on October 18, 2023.”
 FAQ 1137 clarifies that the Western Hemisphere means those countries and areas identified by the Department of State on its website as comprising the Western Hemisphere.