United States: US Imposes Blocking Sanctions Against The Government Of Venezuela

On Monday, August 5, President Donald Trump issued Executive Order 13884,1 which blocked the property and interests in property of the Government of Venezuela ("GoV"), effective immediately. As a result, US persons2 are generally prohibited from engaging in any transactions with or involving the GoV,3 including any entity in which it owns a 50 percent or greater stake, unless authorized by a specific or general license. The Office of Foreign Assets Control (OFAC) issued more than a dozen new general licenses exempting certain activity, revised several existing general licenses, and issued new FAQs concerning the action.

EO 13884 further escalates the United States' sanctions against Venezuela and the Maduro regime. In January 2019, the United States added the Venezuelan state-owned oil company Petróleos de Venezuela, S.A. (PdVSA) to the List of Specially Designated Nationals and Blocked Persons (SDN List) pursuant to a prior executive order, EO 13850. As a result, the property and interests in property of PdVSA were blocked, and US persons were prohibited from dealing with PdVSA without authorization by general or specific license.

In April, OFAC added the Central Bank of Venezuela (CBV) to the SDN List. EO 13884 extends the same prohibitions that have applied to PdVSA since January, and to the CBV since April, to the rest of the GoV. It effectively places the GoV in the same category with regard to transactions with US persons as the governments of Iran and Cuba.

New and revised general licenses permit certain activity to continue

OFAC issued 13 new general licenses authorizing transactions that would otherwise be prohibited as a result of the blocking of the GoV.4 Many of these general licenses are similar to those in other sanctions programs that target foreign governments, and authorize certain transactions related to diplomatic relations; telecommunications and mail; personal communications; emergency and other medical services; protection of intellectual property rights; support for certain nongovernmental organizations; port and airport operations; and overflight payments, emergency landings, and air ambulance services.5

Of particular note are General License 28 and General License 31. GL 28 authorizes until September 4, 2019, the wind-down of operations, contracts or other agreements involving the GoV that were in effect prior to August 5, 2019.6 However, the wind-down license does not apply to GoV entities that were blocked pursuant to prior executive orders—including PdVSA, for which a similar wind-down general license expired in April 2019.7

GL 31 generally authorizes transactions with the Venezuelan National Assembly and Interim President Juan Guaidó (including his executive staff and appointees).8 GL 31 also authorizes US persons to engage in transactions with persons Guaidó has appointed to the board of directors of PdVSA—although PdVSA itself remains blocked. 

OFAC also amended 12 of the existing Venezuela general licenses, which authorized certain transactions that would otherwise be prohibited under the prior executive orders targeting PdVSA and restricting dealings in Venezuelan debt or equity.9 Many of these amendments extended the validity period of these general licenses or made other revisions necessary following in view of the GoV now being blocked. General License 2A, however, which authorizes transactions involving exclusively CITGO Holding, Inc., and PDV Holding, Inc. (PDVH), and their subsidiaries, expanded the scope of GL 2, which had authorized such transactions only with CITGO Holding Inc. (but not PDVH).10

Jurisdictional reach unclear, but intended to have wide-ranging impact

As with other sanctions executive orders, including 13850, EO 13884 also authorizes sanctions against persons determined by the Secretary of the Treasury in consultation with the Secretary of State "to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of" any person added to the SDN List pursuant to EO 13884.

National Security Advisor John Bolton, speaking in Lima, Peru, following the announcement of the new sanctions, threatened retaliation against foreign businesses and governments that continue to do business with Venezuela.11

OFAC has not expressly addressed how the United States may seek to exercise such leverage, and against whom it will seek to exercise it. Amb. Bolton has indicated that China and Russia could be a particular focus.12 The Venezuela sanctions do not contain "secondary sanctions" akin to those present in the Iran sanctions program. However, in March 2019, OFAC sanctioned a Russian bank partly owned by the GoV, Evrofinance Mosnarbank, under EO 13850 on the grounds that it had materially assisted, sponsored or provided financial, material or technological support for, or goods or services to or in support of, PdVSA.13

Counterparty due diligence remains important—but challenging

EO 13884 blocked the property and interests in property of the GoV as well as any entity in which it holds a 50 percent or greater interest. However, neither the GoV nor any of its instrumentalities, agencies or subdivisions—all of which are also blocked—have been added to the SDN List. Effective due diligence on counterparties, including as to their beneficial ownership, is a critical component to assure sanctions compliance. OFAC has emphasized that even financial institutions that do not have direct relationships with customers but act purely as intermediaries in payments that involve a sanctions target may still face enforcement action, depending on the totality of the circumstances.14


The new blocking sanctions against the Government of Venezuela significantly increase the risk of conducting business in or with that country. While compliance challenges for US persons abound, including as to counterparty risk, the prohibitions with respect to US persons dealing with the GoV are reasonably clear. Significant uncertainty remains, however, as to how those prohibitions will affect transactions that involve exclusively non-US persons and that occur entirely outside the United States. Caution, effective risk assessment and an appropriate compliance response are critical for any person, US or non-US, conducting business in or with Venezuela.


1 "Executive Order Blocking Property of the Government of Venezuela," (August 5, 2019)

2 A "US person" is defined as a (1) US citizen, (2) permanent resident alien (i.e., Green Card holder), (3) entity organized under the laws of the US or any jurisdiction within the United States (including foreign branches) or (4) any person in the US (regardless of citizenship).

3 The GoV is defined as "(1) the state and Government of Venezuela, (2) any political subdivision, agency, or instrumentality thereof, (3) the Central Bank of Venezuela, (4) Petroleos de Venezuela, S.A. (PdVSA), and (5) any person or entity owned or controlled, directly or indirectly, by the foregoing, and any person who has acted or purported to act directly or indirectly for or on behalf of, any of the foregoing, including as a member of the Maduro regime."

4 https://www.treasury.gov/resource-center/sanctions/Programs/Pages/venezuela.aspx#gl21.

5 Id.

6 See https://www.treasury.gov/resource-center/sanctions/Programs/Documents/venezuela_gl28.pdf

7 OFAC FAQ # 681 (Updated as of August 6, 2019)

8 See https://www.treasury.gov/resource-center/sanctions/Programs/Documents/venezuela_gl31.pdf.

9 https://www.treasury.gov/resource-center/sanctions/Programs/Pages/venezuela.aspx#gl.

10 Compare https://www.treasury.gov/resource-center/sanctions/Programs/Documents/venezuela_gl2a.pdf with https://www.treasury.gov/resource-center/sanctions/Programs/Documents/venezuela_gl2.pdf.

11 "Bolton warns foreigners that violate Venezuela asset freeze," August 6, 2019.

12 "Trump administration threatens penalties on Russia, China for aiding Venezuela's government," August 6, 2019.

13 "Treasury Sanctions Russia-based Bank Attempting to Circumvent U.S. Sanctions on Venezuela," March 11, 2019,

14 Frequently Asked Question #680.

About Dentons

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

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