United States: OFAC Sanctions Venezuela's National Development Bank

On a bizarre day for sanctions that saw President Trump seemingly take action related to North Korea via tweet – revoke recent measures? scuttle pending ones? – the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) added Venezuela's national development bank, Banco de Desarrollo Economico y Social de Venezuela ("Bandes"), to OFAC's List of Specially Designated Nationals and Blocked Persons (the "SDN List"). OFAC "designated" Bandes pursuant to Executive Order (E.O.) 13850 ("Blocking Property of Additional Persons Contributing to the Situation in Venezuela"), the new favorite authority for headline-grabbing Venezuela sanctions.

The move comes just days after OFAC added Venezuelan state gold-mining company CVG Compania General de Mineria de Venezuela CA ("Minerven") to the SDN List, and roughly two months after it did the same to national oil company Petróleos de Venezuela, S.A. (PDVSA). The Venezuelan gold, energy, and now financial sectors are therefore all economic areas in which parties face potential sanctions for operating. OFAC also recently demonstrated its willingness to sanction parties that provide material support to designated Venezuelan entities when it added Evrofinance Mosnarbank, a Moscow-based financial institution with Venezuelan and Russian stakeholders, to the SDN List for actions involving PDVSA.

In addition to Bandes itself, OFAC also designated four banks that Bandes owns or controls: Banco Bandes Uruguay S.A. ("Bandes Uruguay"); Banco Bicentenario del Pueblo, de la Clase Obrera, Mujer y Comunias, Banco Universal C.A. ("Banco Bicentenario"); Banco de Venezuela, S.A. Banco Universal ("Banco de Venezuela"); and Banco Prodem S.A. ("Banco Prodem"). In keeping with OFAC's 50 Percent Rule, the sanctions against Bandes and the other banks extend to any entity in which one or more of them owns an interest of 50% or more.

Of course, this wouldn't be a Venezuela-related sanctions action without some new general licenses to pore over. This time OFAC gave us four, and they are mercifully vanilla.

The first, General License 15, authorizes all transactions that are prohibited under E.O. 13850 but ordinarily incident and necessary to Mastercard Incorporated, Visa Inc., American Express Company, Western Union Company, MoneyGram International, and their subsidiaries engaging in activities involving Banco Bicentenario and Banco de Venezuela. The general license does not authorize dealings with Bandes or Bandes Uruguay, the unblocking of blocked property, or any other transaction prohibited by an applicable sanctions authority. General License 15 expires on March 22, 2020.

General License 16 also expires on March 22, 2020, and authorizes all transactions that are prohibited under E.O. 13850 but ordinarily incident and necessary to (1) maintaining, operating, or closing accounts of U.S. persons in Banco de Venezuela or Banco Bicentenario, and (2) processing noncommercial personal remittances. General License 16 explicitly states that authorized remittances do not include charitable donations to or for the benefit of any entity, nor do they include funds transfers to support or operate businesses. The license further states that a U.S. financial institution may rely on a remittance's originator for compliance purposes unless the financial institution knows or has reason to know that a transfer doesn't comply with the authorization's terms. Like General License 15, General License 16 does not authorize dealings with Bandes or Bandes Uruguay, the unblocking of blocked property, or any other transaction prohibited by an applicable sanctions authority.

General License 17 is a traditional "wind-down" license, authorizing all transactions that are prohibited under E.O. 13850 but ordinarily incident and necessary to winding down operations, contracts, or other agreements involving Banco de Venezuela, Banco Bicentenario, or Banco Prodem that were in effect prior to March 22, 2019. Continuing the trend, General License 17 does not authorize dealings with Bandes or Bandes Uruguay (despite Prodem's inclusion in this authorization), the unblocking of blocked property, or any other transaction prohibited by an applicable sanctions authority. The license expires on May 21, 2019.

Last but not least is General License 18, which might be the most interesting of the new authorizations because it deals with prohibitions under both E.O. 13850 and E.O. 13808, the legal authority that first introduced real complexity into the Venezuela sanctions program. General License 18 authorizes all transactions that are prohibited under E.O. 13850 and section 1(b) of E.O. 13808 but ordinarily incident and necessary to maintaining or operating Integración Administradora de Fondos de Ahorro Previsional, S.A. ("Integración"), a pension fund administrator in which (according to OFAC) Bandes Uruguay has a stake of 50% or greater. Section 1(b) of E.O. 13808 prohibits U.S. persons from directly or indirectly purchasing most securities from the Government of Venezuela. General License 18 speaks directly to this prohibition by authorizing U.S. persons to purchase securities from Integración, sell securities to Integración, and serve as a custodian for securities held by Integración. As with the other general licenses, General License 18 does not authorize anyone to unblock blocked property or engage in any other transaction prohibited by an applicable sanctions authority. Notably, however, the license does authorize dealings with Bandes and Bandes Uruguay that are ordinarily incident and necessary to maintaining or operating Integración. General License 18 has no expiration date.

In addition to the four new general licenses, OFAC issued an amended General License 4A to authorize transactions with Banco de Venezuela and Banco Bicentenario that are ordinarily incident and necessary to exporting or re-exporting agricultural commodities, medicine, medical devices, and replacement parts and components for medical devices to Venezuela. As in General Licenses 15, 16, and 17, dealings with Bandes and Bandes Uruguay remain prohibited.

Per new FAQ 664, U.S. financial institutions and registered money transmitters can process transactions and debit and credit Banco de Venezuela, Banco Bicentenario, Banco Prodem, and Integración correspondent accounts in accord with the general licenses applicable to them.


With six executive orders, 18 protean general licenses, and dozens of FAQs, the Venezuela sanctions program has arguably nudged past Iran and Russia for the dubious distinction of being the most complicated program OFAC administers. (It has certainly outpaced all the others in public actions so far this year.) Two questions that OFAC must be struggling with are: (1) What is the return on all this complexity? and (2) Would a Syria-style comprehensive program have any significant adverse consequences that aren't already playing out under the current sanctions framework? Sanctions fatigue around the program is sky high, and with Venezuelan oil and debt now being squeezed out of the U.S. economy, and increasingly risky elsewhere, it is hard to identify more meaningful directions in which the program might expand while still maintaining broad support in the region and beyond. Whack-A-Mole actions like this one aimed at crimping regime revenues and evasion opportunities are likely to continue, as are occasional corruption network designations that make Maduro regime insiders feel the pain personally. Wherever Venezuela sanctions go, we at Morrison & Foerster will continue to keep you updated and help you respond to the shifting landscape.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

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