OFAC Venezuela Sanctions FAQ: Questions 10-13

 

Does the prohibition on “otherwise dealing in new debt” of longer than 90 days maturity (for PdVSA) or 30 days (for the rest of the Government of Venezuela) prohibit dealing in debt with maturity that exceeds the applicable authorized tenor in which the Government of Venezuela is not directly or indirectly the borrower?

E.O. of August 24, 2017 prohibits U.S. persons from dealing in debt of longer than 90 days maturity (for PdVSA) and longer than 30 days maturity (for the rest of the Government of Venezuela) issued on or after the order’s effective date. E.O. of August 24, 2017 does not prohibit U.S. persons from dealing with the Government of Venezuela as counterparty to all transactions involving debt issued on or after the sanctions effective date by a non-sanctioned party. For example, U.S. persons are not prohibited from dealing in a loan exceeding the applicable authorized tenor that is issued after the sanctions effective date if such loan is provided by the Government of Venezuela to a non-sanctioned third-party, dealing with the Government of Venezuela when it plays the role of underwriter on new debt of a non-sanctioned third party exceeding the applicable authorized tenor, or accepting payment under a letter of credit with terms exceeding the applicable authorized tenor that is issued, advised, or confirmed by the Government of Venezuela, so long as the Government of Venezuela is not the borrower.

May a U.S. person consent to a replacement of its participation by a non-U.S. person in a long-term loan facility that was extended to the Government of Venezuela prior to the sanctions effective date?

E.O. of August 24, 2017 does not prohibit a U.S. person from engaging in transactions necessary to exit or replace its participation in a long-term loan facility that was extended to the Government of Venezuela prior to the sanctions effective date, provided that such transactions do not otherwise run afoul of the order’s prohibitions. This would not constitute dealing in new debt. U.S. persons involved in such facilities should ensure that all newly negotiated drawdowns or disbursements from the facility utilize repayment terms that are not prohibited by the sanctions effective date. See FAQ 394 for additional information on what constitutes a permitted drawdown or disbursement from an existing long-term loan obligation.

Is a U.S. person permitted under E.O. of August 24, 2017 to extend credit for greater than 90 days (for PdVSA) or 30 days (for the rest of the Government of Venezuela) to a non- sanctioned party for the purpose of purchasing goods or services from the Government of Venezuela?

E.O. of August 24, 2017 does not prohibit U.S. persons from extending credit for longer than 90 days (for PdVSA) or 30 days (for the rest of the Government of Venezuela) to non-sanctioned parties for the purpose of purchasing goods or services from the Government of Venezuela, so long as the Government of Venezuela is not the indirect borrower.

How can I help the Venezuelan people while making sure to abide by the U.S. sanctions?

With the exception of Specially Designated Nationals, the Venezuelan people are not subject to U.S. sanctions. Furthermore, E.O. of August 24, 2017 does not impose a complete blocking sanction on the Government of Venezuela. Sanctions do not preclude U.S. persons from exporting or re-exporting items to Venezuela if doing so is authorized under other applicable U.S. laws and regulations. OFAC has also issued General License 4 to authorize all financing and other dealings in new debt related to the exportation or reexportation of agricultural commodities, medicine, medical devices, components, or replacement parts for medical devices, to Venezuela, or to persons in third countries purchasing specifically for resale to Venezuela, provided that the exportation or reexportation is licensed or otherwise authorized by the Department of Commerce. See General License 4 for details and relevant definitions.

In addition to this general license, OFAC can also issue a specific license to authorize particular transactions that may otherwise be prohibited by the sanctions, as long as those transactions are in the foreign policy interests of the United States. 

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