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On August 24, 2017, President Trump signed an Executive Order (“Order”) imposing additional sanctions on Venezuela. The Order states that these sanctions, which primarily target the Government of Venezuela and the Venezuelan oil industry, are in response to the deepening political and humanitarian crisis in Venezuela. The Order adds to a growing list of restrictions that apply to Venezuela, which is already subject to a US arms embargo and US licensing requirements on exports and reexports of specific categories of goods, software, and technology to military end-users or for military end-uses in Venezuela. The Order also follows the designation as Specially Designated Nationals of various Venezuelan government officials (including President Nicolas Maduro) pursuant to Executive Order 13692 of March 8, 2015 (see prior blog post here regarding this order).

In conjunction with this Order, the US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued four general licenses authorizing certain transactions involving Venezuela, including transactions to wind down existing contracts, that would otherwise be prohibited under the Order. Finally, OFAC published new Frequently Asked Questions regarding these restrictions and general licenses.

Prohibited Transactions

The Order prohibits “US Persons” (i.e., entities organized under US laws and their non-US branches; individuals and entities physically located in the United States; and US citizens and permanent resident aliens, wherever located or employed) from engaging in any transactions related to, providing financing for, or otherwise dealing in the following:

  • New debt with a maturity of greater than 90 days of Petróleos de Venezuela S.A. (“PdVSA”);
  • New debt with a maturity of greater than 30 days (other than the debt of PdVSA, which is subject to the 90 day limit discussed above) or new equity of the Government of Venezuela (including any political subdivision, agency, or instrumentality thereof such as the Central Bank of Venezuela and PDVSA as well as any person owned or controlled by, or acting for or on behalf of, the Government of Venezuela);
  • Bonds issued by the Government of Venezuela prior to the effective date of the Order (August 25, 2017); and
  • Dividend payments or other distributions of profits to the Government of Venezuela from any entity owned or controlled, directly or indirectly, by the Government of Venezuela.

US Persons are also prohibited under the Order from purchasing, directly or indirectly, securities from the Government of Venezuela, other than securities qualifying as new debt not targeted by the above provisions of the Order because the debt has a maturity of less than or equal to 90 days (for PdVSA) or 30 days (for the Government of Venezuela).

OFAC’s FAQs provide examples of what constitute “new debt” and “new equity” for purposes of the Order and clarify that the above prohibitions apply to entities that are 50% or more owned by the Government of Venezuela.

General Licenses

As noted above, OFAC issued four general licenses to authorize certain transactions that would otherwise be prohibited by the Order, as follows:

  • General License 1 authorizes US Persons to engage in certain transactions ordinarily incident and necessary to winding down contracts or other agreements that were in effect prior to the effective date of the Order (August 25, 2017) but that would now be prohibited under the Order. Such wind down transactions may be carried out under this general license through September 24, 2017.
  • General License 2 authorizes US Persons to engage in transactions where the only Venezuelan government entities involved are CITGO Holding, Inc. and any of its subsidiaries.
  • General License 3 authorizes US Persons to engage in transactions related to, provide financing for, and otherwise deal in bonds that (i) are specified in the Annex to General License 3 or (ii) were issued prior to the effective date of the Order by US Person entities owned or controlled, directly or indirectly, by the Government of Venezuela (e.g., CITGO Holding, Inc.).
  • General License 4 authorizes US Persons to engage in certain transactions related to, provide financing for, and otherwise deal in new debt related to the export or reexport from the United States or by US Persons of agricultural commodities, medicine, medical devices, or replacement parts and components for medical devices to Venezuela, or to persons in third countries purchasing specifically for resale to Venezuela. These exports and reexports must be licensed or otherwise authorized under the Export Administration Regulations, 15 C.F.R. Parts 730-774.

The foregoing is intended only to provide a general summary of recent developments regarding the expansion of US sanctions targeting Venezuela.  If you have any questions about how these changes might affect your company or if you require advice on any specific transactions or plans, please contact one of the members of Baker McKenzie’s International Trade Practice Group.

Nicholas Coward
T +1 202 452 7021
John F. McKenzie
T +1 415 576 3033
Janet K. Kim
T +1 202 835 1653
Bart McMillan
T + 1 312 861 2808
Sylwia Lis
T +1 202 835 6147
Alison Stafford Powell
T +1 650 856 5531
Paul E. Amberg
T +1 312 861 8675
Ryan P. Fayhee
T +1 202 452 7024


Nicholas Coward is a partner in Baker McKenzie´s Washington office and serves as chair the Firm’s Global Trade and Commerce Practice Group. He has also chaired the North American International Commercial Practice Group. He has over 30 years experience practicing in the areas of US export controls, trade sanctions and the Foreign Corrupt Practices Act. Mr. Coward served on the Washington Office management committee from 1990 to 2002 including two terms as managing partner and served on the Firm’s Executive Committee from 2002 to 2007.


Janet Kim is a partner in Baker McKenzie's Washington, DC office. Ms. Kim advises clients — including US and foreign companies —on outbound compliance issues arising from the US Foreign Corrupt Practices Act, as well as in criminal and regulatory proceedings, internal investigations and compliance reviews relating to these areas of law. She also advises on the application of these laws in cross-border transactions, including mergers and acquisitions, divestitures and joint venture arrangements. Additionally, Ms. Kim helps develop and implement workable, risk-based compliance programs for companies in a wide range of industries.


Bart McMillan leads the Chicago Office’s International Trade Compliance Subpractice within the North American International Commercial Practice. He advises US and non-US companies on international trade compliance matters arising under US export controls, trade sanctions, and antiboycott rules, as well as under US customs laws with respect to classification, valuation, country of origin, free trade agreements, and the protection of intellectual property at the US border. His practice also covers antibribery and specialized commercial compliance issues in sales and sales promotion under the US Foreign Corrupt Practices Act (FCPA), non-US antibribery law, and non-US commercial laws. Mr. McMillan has been practicing with Baker McKenzie for the entirety of his legal career, and during 2004 he was located in the Washington, DC office. He is a frequent speaker on international trade compliance matters at seminars, conferences, and company training events. While pursuing his J.D. at NYU School of Law, Mr. McMillan was Staff Editor (1997-98) and Associate Editor (1998-99), New York University Law Review; and he participated in a semester exchange to the Central European University (Budapest) (Legal Studies Dep’t).


Sylwia Lis is a partner and member of the International Trade, Compliance and Customs Steering Committee in Baker McKenzie. She has extensive experience advising companies on US laws relating to exports and reexports of commercial goods and technology, defense trade controls and trade sanctions — including licensing, regulatory interpretations, compliance programs and enforcement matters. She also has advised clients on national security reviews of foreign investment administered by the Committee on Foreign Investment in the United States (CFIUS), including CFIUS-related due diligence, risk assessment, and representation before the CFIUS agencies.


Alison Stafford Powell has considerable experience counseling US and non-US companies on cross-border outbound trade compliance in the areas of export controls, trade and financial sanctions, anti-terrorism controls, anti-corruption and anti-money laundering rules, US anti-boycott laws, and US foreign investment restrictions under the Exon-Florio Provision. With a background also in EU and UK trade restrictions, she routinely advises non-US companies on reconciling US and EU trade regulations and on the extra-territorial impact of US trade restrictions. She is a dual US/English qualified lawyer and has worked in the Firm’s London, Washington, DC and Palo Alto offices since 1996.


Paul Amberg is a partner in Baker McKenzie’s Amsterdam office, where he handles international trade and compliance issues. He advises multinational companies on export controls, trade sanctions, antiboycott rules, customs laws, anticorruption laws, and commercial law matters.


Ryan Fayhee is a partner in Washington, D.C. Mr. Fayhee previously was with the United States Department of Justice for 11 years, where he was a leading national security prosecutor in the areas of economic espionage, export controls, sanctions enforcement, and cybercrime. Through a number of investigations and prosecutions, Mr. Fayhee received special recognition from the Attorney General for devising a model approach to the identification and disruption of foreign military supply and proliferation networks. Mr. Fayhee’s practice focuses on internal and cross-border investigations, acquisition due diligence, trade secret theft, white-collar criminal defense, cybersecurity, national security reviews of foreign acquisitions, and matters arising under the False Claims Act.