United States: New Sanctions Against Venezuela's State-Owned Oil Company

Continued political turmoil in Venezuela has led to additional U.S. sanctions. On Jan. 25, 2019, President Donald Trump amended the various executive orders that authorize sanctions against the government of Venezuela to allow sanctions against members of the Maduro regime, which the United States no longer recognizes as the legitimate government of Venezuela. In addition, on Jan. 28, 2019, the United States determined that persons operating in Venezuela's oil sector are subject to sanctions pursuant to Executive Order (E.O.) 13850, issued on Nov. 1, 2018, and added Venezuela's state oil company, Petróleos de Venezuela, S.A. (PdVSA), to the Specially Designated Nationals and Blocked Persons (SDN) List maintained by the Department of the Treasury's Office of Foreign Assets Control (OFAC). This action places transactions with PdVSA and its subsidiaries off limits to U.S. persons and requires U.S. persons to block (or "freeze") PdVSA assets within their possession or control unless authorized by OFAC. Simultaneously, OFAC issued several general licenses authorizing various transactions with PdVSA and its subsidiaries, including CITGO Holding, Inc., PDV Holding, Inc., and Nynas AB. However, care must be taken before relying on any of the general licenses, as each general license is subject to specific terms and conditions, including validity periods.

PdVSA's designation is the latest in a series of actions taken by the U.S. government to impose sanctions in response to Venezuelan President Nicolas Maduro's increasingly authoritarian regime. Since March 2015, a total of five E.O.s have imposed a variety of Venezuela-related sanctions, including blocking of persons who undermine democracy, commit human rights violations or engage in public corruption (E.O. 13692); debt and equity restrictions (E.O. 13808 and E.O. 13835); a ban on transactions involving Venezuela's digital currency (E.O. 13827); and sectoral sanctions targeting and authorizing blocking of persons operating in the Venezuelan gold and oil sectors or engaging in deceptive practices or corruption (E.O. 13850). While most of the sanctions impact activities of U.S. persons, E.O. 13850 also authorizes blocking of non-U.S. persons who provide material assistance or financial, material or technological support for, or goods or services to or in support of, persons designated under the E.O. – which now includes PdVSA.

Since August 2017, PdVSA has been subject to debt and equity restrictions, but as a result of its addition to the SDN List, U.S. persons cannot engage in any transactions with PdVSA or any of its direct or indirect subsidiaries in which it owns a 50 percent or greater interest, unless otherwise authorized by an amended or newly issued general license.

Of particular significance to persons operating in the oil sector, General License No. 7 provides that, at least through July 26, 2019 and subject to certain conditions, all transactions and activities by U.S. persons otherwise prohibited by E.O. 13850 with respect to PdVSA's U.S. subsidiaries, CITGO Holding, Inc., and PDV Holding, Inc., as well as their subsidiaries, are authorized. In addition, these entities may continue to purchase and import petroleum and petroleum products from PdVSA and its subsidiaries through April 27, 2019, provided that payments for such purchases must be made to a blocked account in the United States.

Also of interest to U.S. persons operating in the oil sector is General License No. 8, which authorizes transactions ordinarily incident and necessary to the operations of certain companies operating in Venezuela – again, subject to certain conditions.

A complete list of general licenses applicable to the PdVSA designation is as follows:

  • General License No. 3C, amending General Licenses 3, 3A, and 3B and authorizing transactions related to, provision of financing for, and other dealings in certain bonds.
  • General License No. 7, authorizing certain activities involving PDV Holding, Inc., and CITGO Holding, Inc.
  • General License No. 8, authorizing transactions involving PdVSA prohibited by E.O. 13850 for certain entities operating in Venezuela.
  • General License No. 9B, authorizing transactions related to dealings in certain securities.
  • General License No. 10, authorizing the purchase in Venezuela of refined petroleum products from PdVSA.
  • General License No. 11, authorizing certain activities necessary to the maintenance or wind down of operations or existing contracts with PdVSA.
  • General License No. 12, authorizing certain activities necessary to the wind down of operations or existing contracts with PdVSA.
  • General License No. 13, authorizing certain activities involving Nynas AB.
  • General License No. 14, authorizing official business of the U.S. government.

OFAC has issued a number of new and amended frequently asked questions (FAQs) to provide guidance on the designation of PdVSA and the general licenses. These are available on OFAC's website. As noted above, however, care must be taken before relying on any of the general licenses, as each general license is subject to specific terms and conditions, including validity periods. The complexity of the issues posed by attempts to determine what activities are authorized by the general licenses is illustrated by the fact that two of the licenses issued on Jan. 28, as well as a few of the FAQs, were reissued on Feb. 11 to provide further clarification.

The Trump administration has framed the new Venezuela-related sanctions as conditional, indicating that they might be lifted after a meaningful regime change. It therefore remains to be seen how long the sanctions will persist and what effect they will have on the oil market. In the meantime, we would be happy to work with you to determine the applicability of the new sanctions to proposed activity as well as whether contemplated transactions related to the Venezuelan oil industry qualify under any of the general licenses authorizing certain aspects of otherwise sanctionable conduct.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions