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. Continue Reading OFAC Sanctions Additional Venezuelan Officials
On July 19, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) confirmed through issuance of two new FAQs that Executive Order 13835 prohibits U.S. persons from attaching and executing judgments against equity collateral securing debt issued by Government of Venezuela state-owned entities, even if both the debt and the security interest pre-date sanctions. Specifically, Subsection 1(a)(iii) of the Executive Order prohibits “[a]ll transactions related to, provision of financing for, and other dealings in…the sale, transfer, assignment, or pledging as collateral by the Government of Venezuela of any equity interest in any entity in which the Government of Venezuela has a 50 percent or greater ownership interest.” As we noted in a prior post, this prohibition is not limited to debt incurred or collateral pledged after the date of the Executive Order and so prevents executing on any collateral securing Government of Venezuela debt consisting of equity in state-owned or state-controlled entities absent a license from OFAC. Continue Reading OFAC Confirms U.S. Sanctions Retroactively Prohibit Execution on Equity Collateral Securing Government of Venezuela Debt, Authorizes All Dealings Involving PdVSA 2020 Bonds
Last week, President Trump issued Executive Order 13835, further tightening sanctions on Venezuela. The Executive Order had three new prohibitions, barring all transactions relating to the following:
- the purchase of any debt owed to the Government of Venezuela, including accounts receivable;
- any debt owed to the Government of Venezuela that is pledged as collateral after the effective date of this order, including accounts receivable; and
- the sale, transfer, assignment, or pledging as collateral by the Government of Venezuela of any equity interest in any entity in which the Government of Venezuela has a 50 percent or greater ownership interest.
On March 19, 2018, President Trump issued an Executive Order prohibiting all U.S. persons and residents from transacting in digital currencies issued by the Government of Venezuela, including the country’s recently launched oil-backed cryptocurrency the “Petro” (PTR) or petromoneda. The sanctions are in response to an emerging trend of sanctioned or rogue regimes experimenting with digital assets. Continue Reading U.S. Sanctions Venezuela’s “Petro” Cryptocurrency Amid Broader Trend of Sanctioned and Rogue Regimes Experimenting with Digital Assets
On February 12, 2018, the Office of Foreign Assets Control (OFAC) issued two new Venezuela-related frequently asked questions (FAQs) providing additional guidance on how late payments will be treated for purposes of the prohibitions on dealing in “new debt” of the Government of Venezuela and of state-owned entities. Most notably, the new guidance prohibits acceptance of late payments on post-sanctions debt of Government of Venezuela entities if those payments are received outside the applicable 30- or 90-day limit under Executive Order 13808, even if the failure to pay was not consented to by the lender and violates the underlying agreement. This guidance likely also has implications for the similar prohibitions on dealings in “new debt” under Russian sectoral sanctions. Continue Reading OFAC Issues Guidance on Payments under Venezuelan “New Debt”; Likely to Affect Russian Sectoral Sanctions as Well
On December 14, 2017, Cleary Gottlieb partner Paul Marquardt led a presentation titled, “Developments in U.S. Sanctions Against Iran, Russia, and Venezuela” as part of PLI’s Coping With U.S. Export Controls and Sanctions 2017 conference.
To view the full presentation, click here.
For additional information regarding the conference, please visit the event’s website.
On August 25, 2017, President Trump issued an Executive Order severely restricting transactions in debt and equity of the Government of Venezuela and of state-owned entities; including Petroleos de Venezuela; S.A. (PdVSA). Simultaneously with the Executive Order; OFAC issued a number of general licenses and Frequently Asked Questions relating to the new sanctions. These new actions build on sanctions targeting Venezuelan officials; discussed here; and continue the trend toward targeted “bespoke” sanctions short of full blocking of all transactions with a targeted regime or country.
The new sanctions:
- Prohibit dealings in existing debt of the Government of Venezuela (and its controlled entities) by U.S. persons or within U.S. jurisdiction; subject to an extensive list of exceptions for specified issuances;
- Prohibit all dealings by U.S. persons or within U.S. jurisdiction in new debt of the Government of Venezuela with a duration of longer than 30 days and of PdVSA with a duration of longer than 90 days; or new equity of any state-controlled entity;
- Bar the purchase of securities from the Government of Venezuela within U.S. jurisdiction; other than permitted new debt; and
- Bar all distributions of profits and earnings within U.S. jurisdiction to the Government of Venezuela by state-owned entities.
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On July 31, OFAC designated Venezuelan President Nicolas Maduro Moros as a “Specially Designated National” (“SDN”) blocking all of his assets and prohibiting any transaction in which he has an interest within U.S. jurisdiction. Last week, on July 26, OFAC designated 13 other current and former Venezuelan officials as SDNs, including Rocco Albisinni Serrano, who is the President of CENCOEX (the Venezuelan foreign exchange authority), and Simon Alejandro Zerpa Delgado, who is the Vice President of Finance for PDVSA and the President of Venezuela’s Economic and Social Development Bank (“BANDES”), and the President of Venezuela’s National Development Fund (“FONDEN”). There have been rumors that the United States was considering restricting oil sales from Venezuela, but at the moment no such sanctions have been imposed. Continue Reading OFAC Sanctions Venezuelan Officials