OFAC Venezuela Sanctions FAQ: Questions 3 & 4

Is there a wind-down or safe harbor provision in E.O. of August 24, 2017?

General License 1 provides a wind-down period with respect to contracts and other agreements that were in effect prior to E.O. of August 24, 2017 taking effect. That general license provides 30 days from the order’s effective date in which to conduct all transactions and activities otherwise prohibited by Subsections 1(a)(i)-(iii) and (b) of the E.O. that are ordinarily incident and necessary to winding down such agreements.

Has OFAC issued general licenses related to E.O. of August 24, 2017?

OFAC has issued four general licenses related to E.O. of August 24, 2017. General License 1 applies to contracts and other agreements that were in effect prior to the order’s effective date. It provides 30 days as of the order’s effective date in which to conduct all transactions and activities otherwise prohibited by Subsections 1 (a)(i)-(iii) and (b) of the E.O. that are ordinarily incident and necessary to winding down such agreements.

General License 2 authorizes all transactions otherwise prohibited by Subsections 1(a)(i), (a)(ii), and (b) of E.O. of August 24, 2017 provided that the only Government of Venezuela entities involved in the transactions are CITGO Holding, Inc. and any of its subsidiaries.

General License 3 authorizes all transactions related to, the provision of financing for, and other dealings in bonds contained on the List of Authorized Venezuela-Related Bonds that would otherwise be prohibited by Section 1(a)(iii) of E.O. of August 24, 2017. That list is appended to General License 3 and also available as a stand-alone document on the Venezuela-related Sanctions page of OFAC’s website. General License 3 further authorizes all transactions related to, the provision of financing for, and other dealings in bonds issued prior to the effective date of E.O. of August 24, 2017, if such bonds were issued by U.S. person entities owned or controlled, directly or indirectly, by the Government of Venezuela, such as CITGO Holding, Inc.

General License 4 authorizes all transactions related to the provision of financing for, and other dealings in new debt related to the exportation or reexportation 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, provided that the exportation or reexportation is licensed or otherwise authorized by the Department of Commerce. 

All of the general licenses are available on OFAC’s website (www.treasury.gov/ofac) on the Venezuela-related Sanctions page. Review them for details.

 

 

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