South American Fire and Fury: OFAC sanctions Venezuelan government

We have a new Executive Order which sanctions the Maduro government (and all their 50 Percent Rule brethren), new (13) and updated (12) General Licenses, new and revised FAQs, and guidance related to humanitarian assistance.

These will all be posted separately (except for possibly the amended General Licenses – depending on the nature of the change.

And Treasury issued a humanitarian assistance press release:

Treasury Underscores U.S. Commitment to Humanitarian Support for Venezuelan People

Washington—Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued guidance highlighting the United States’ commitment to the unfettered flow of humanitarian aid to the Venezuelan people.  OFAC maintains several authorizations that permit humanitarian-related transactions, enabling continued support to the people of Venezuela and ensuring that legitimate humanitarian activity is not the target of U.S. sanctions. 

“Treasury is committed to ensuring the unfettered flow of humanitarian aid to the people of Venezuela, who continue to suffer as a result of the mismanagement and corruption of the illegitimate former Maduro regime.  It is imperative that the international community continues to fully utilize humanitarian exemptions to ensure that food and supplies continue to flow to Venezuelans suffering from Maduro’s man-made economic crisis,” said Sigal Mandelker, Under Secretary for Terrorism and Financial Intelligence.  “The United States stands with the Venezuelan people and interim President Juan Guaidó in support of efforts to ensure that food, international aid, and resources reach vulnerable Venezuelans.  Treasury regulations have and will continue to allow for unimpeded humanitarian support to the Venezuelan people, and we encourage U.S. persons to employ these authorizations to engage with those in need.”

OFAC’s regulations and general licenses allow U.S. persons to continue to provide humanitarian support to the Venezuelan people, including transactions through the U.S. financial system for certain authorized activity related to food, agricultural commodities, medicine, and medical devices; non-commercial, personal remittances; international organizations; telecommunications and mail; the Internet; medical services; and nongovernmental organizations.

Humanitarian support is generally excepted from sanctions, so long as such activity meets the requirements outlined in each authorization.  Sanctions do not prohibit U.S. persons from engaging in transactions involving the country or people of Venezuela, provided blocked persons or proscribed conduct are not involved.

Across all sanctions programs, we remain committed to working with the private sector to clarify U.S. sanctions regulations and promote a risk-based approach to sanctions compliance, including in cases involving the provision of humanitarian aid.  For transactions not otherwise authorized by OFAC general licenses, OFAC maintains a long-standing, favorable specific licensing policy supporting the provision of humanitarian assistance through which U.S. persons can request OFAC approval for such transactions.  OFAC considers specific licenses on a case-by-case basis and prioritizes license applications, compliance questions, and other requests related to humanitarian support for the Venezuelan people.

View full OFAC Advisory: Guidance Related to the Provision of Humanitarian Assistance and Support to the Venezuelan People

Spanish Translation

Portuguese Translation

While State’s fact sheet focused on Maduro:

The former regime of Nicolás Maduro has consistently violated and abused the human rights and dignity of the country’s citizens, plundered its natural resources, and driven a once-prosperous nation into economic ruin with Maduro’s authoritarian rule and ruinous economic policies.  Maduro’s thugs have reportedly engaged in killings and physical abuse, detained political opponents, and severely interfered with the exercise of freedom of expression, all in a brutal effort to retain power.

 

MADURO’S CORRUPTION & INCOMPETENCE:

  • On July 25, 2019, the United States sanctioned Maduro’s three stepsons (Walter, Yosser, and Yoswal Flores), and seven other individuals, as well as 13 entities, involved in a complex network of bribery and money laundering that has been stealing from the people of Venezuela through a for-fee food distribution program known as the CLAP.

  • Maduro and his associates have been responsible for the theft and embezzlement of billions of dollars from the Venezuelan people over many years. Regime insiders have also been involved in drug smuggling, and the illicit removal of gold from the Venezuelan Central bank.

  • Maduro has financed himself by “cranking up the central bank printing presses. That has ballooned the supply of the national currency, the bolivar, which has lost more than 99 percent of its value since 2013 and is virtually worthless.”  (Bloomberg Businessweek, March 9, 2019)

  • The bolivar’s accumulated inflation 2014-2018 was more than twenty-two million, according to the Central Bank of Venezuela. As a result of Maduro’s actions, the people of Venezuela can no longer afford to live in their own country.

  • Similarly, Venezuela’s infrastructure has begun to collapse under Maduro.  For example, the electrical system has rapidly deteriorated since March, resulting in nation-wide blackouts and the increasing rationing of electricity in many states.  In 2016, Maduro declared approximately 12 percent of the country to be a part of an “Orinoco Mining Arc” and awarded himself broad authorities to oversee the exploitation of resources for personal gain.  Maduro ejected foreign companies from Venezuela and replaced employees with untrained workers who operate under the leadership of senior Venezuelan military officers.

 

VENEZUELA’S MADURO-MADE CRISIS:

  • Economic Decline: The International Monetary Fund estimated that the cumulative decline of the Venezuelan economy since 2013 will surpass 60 percent and is among the deepest five-year contractions the world has seen over the last half century.

  • Decreased Supply of Food & Medicine: By 2016 – the year before the United States sanctioned former President Maduro – food imports in the country had fallen 71 percent since 2013.  Imports of medicines and medical equipment fell by 68 percent 2013-2016.  (Brookings Institute/Harvard research)

  • Decreased Access to Food: In December 2018, only 55 percent of Venezuelans ate three meals a day.  (Delphos, a Venezuelan pollster)

    • Bread consumption in Venezuela decreased by 50 percent and in 2019, only eight ships carrying wheat arrived to Venezuela, according to the President of the Venezuelan Federation of Bakers.

  • Decreased Hospital Services: In November 2018, 76 percent of hospitals surveyed had deficiencies in laboratory testing, 70 percent saw lapses in radiology services, 67 percent suffered electricity shortages, and 70 percent were experiencing water shortages.  (Doctors for Health)

  • Increased Infant Deaths: In 2016, infant deaths increased more than 30 percent while maternal deaths rose nearly 66 percent.  (The former Maduro regime’s Ministry of Health)

 

MADURO’S HUMAN RIGHTS ABUSES & VIOLATIONS:

  • The former Maduro regime reportedly engaged in widespread, arbitrary detentions, and physical abuse, as well as repression to silence dissent and enforce social controls.

  • Maduro has increasingly relied on the Special Action Force of the National Police (FAES) that he created in 2017 to carry out illegal raids and extrajudicial killings.

  • The FAES, comprised of 1,300 officers, stands accused of killing more than 100 people in low-income neighborhoods June-December 2018. (NGO Provea report of January 26, 2019)

  • On April 5, 2019, human rights NGO PROVEA announced the discovery of several clandestine detention centers, including three allegedly run by colectivos, police, state security forces, and intelligence agencies, where the former regime extralegally detained and abused Venezuelan citizens.

  • In July 2019, UN High Commissioner for Human Rights Michelle Bachelet concluded that Maduro’s security and intelligence apparatus use widespread and arbitrary repression of civil society and the democratic opposition.  For example, the July 5 UN OHCHR report noted at least 7,523 instances of extrajudicial killings.

Note that there are no OFAC designations here – you are expected to figure out how to manage this. Probably easiest to stop everything that mentions a city or the country of Venezuela, rather than trying to create listings for every named office of the government (which could change on a heartbeat just to defeat this strategy).

Links:

OFAC Notice

Executive Order

New and Updated FAQs

Amended General Licenses (2, 3, 4, 7, 8, 9, 10, 13, 15, 16, 18. 20)

New General Licenses

Humanitarian Assistance Guidance

Treasury Press Release

State Department Fact Sheet

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