Licenses

June 27, 2019

June 26, 2019: OFAC updates Venezuela and Ukraine-related General Licenses

Issuance of Amended Venezuela-related General License; Temporary Extension of Ukraine-related General Licenses

6/26/2019

The Department of the Treasury’s Office of Foreign Assets Control (OFAC) is amending Venezuela-related

Today OFAC extended the expiration date of two general licenses related to GAZ Group by issuing General License No. 13L – Authorizing Certain Transactions Necessary to Divest or Transfer Debt, Equity, or Other Holdings in Certain Blocked Persons, and General License No. 15F – Authorizing Certain Activities Necessary to Maintenance or Wind Down of Operations or Existing Contracts with GAZ Group, or Certain Automotive Safety Activities.

In addition, General License No. 15F includes a new authorization for certain safety-related activity.

Links:

OFAC Notice

Venezuela General License 13B

Ukraine-Related General License 13L

Ukraine-Related General License 15F

June 10, 2019

Slight clarification to Thursday’s OFAC Venezuela changes

Mr. Watchlist needs to learn how to read the OFAC notices better… the expiration dates for the 3 update General Licenses had, in fact, not changed (they all expire in late July). All 3 licenses were updated to clarify that diluents (chemicals which can be used to dilute heavy crude oil traveling through pipelines so it is less viscous and therefore flows more freely) are not authorized under the licenses.

BTW, Mr. Watchlist’s beef with the apparent error in General License 7 (where a clause that appears to have expired is still in the License) still stands…

Sorry about that – was trying to get out of town for the weekend. Not an excuse, but an explanation…

June 7, 2019

June 6, 2019: OFAC amends 3 Venezuela General Licenses, issues FAQ

On Thursday, OFAC issued amended versions of Venezuela General Licenses 7, 8 and 13. General Licenses 8 and 13 were extended through July 27th, while section a of General License 7 “automatically renews on the first day of each month, and is valued for a period of 18 months from the effective date of General License No. 7B or the date of any subsequent renewal of General License No. 7B, whichever is later.”

Mr. Watchlist does not understand this – if it is valid for 18 months, why does it need to renew each month?

Also, the authorization in section b said it is valid through April 28th, which has already passed. Was this a mistake, or did they mean 2020 (or some other date)?

OFAC also issued a single new, unrelated FAQ:

672. Can I export or reexport diluents to Venezuela?

No. Diluents (including, for example, crude oil and naphtha) play a key role in the transportation and exportation of Venezuelan petroleum, a primary source of revenue for the illegitimate and corrupt Maduro regime, which the United States seeks to restrict further. OFAC is amending General Licenses (GLs) 7A, 8, and 13 effective as of June 6, 2019, to restrict U.S. persons engaging in transactions and activities authorized by those GLs from exporting or reexporting diluents, directly or indirectly, to Venezuela, or from engaging in transactions or activities related thereto.

Absent authorization from OFAC, all U.S. persons continue to be prohibited from engaging in any dealings with Petróleos de Venezuela, S.A. (PdVSA), or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest. In addition, non-U.S. persons could be subject to designation pursuant to Executive Order 13850, as amended, for operating within the oil sector of the Venezuelan economy, or for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of PdVSA, including the exportation or reexportation of diluents to PdVSA.

Given PdVSA’s role as Venezuela’s state-owned oil company, exports or reexports of diluents to Venezuela likely include a direct or indirect interest of PdVSA. As a result, persons directly or indirectly exporting or reexporting diluents to Venezuela should exercise enhanced due diligence to verify the ultimate end user and ensure that the transaction does not involve a direct or indirect interest of a sanctioned person, including PdVSA, even if the sanctioned person is not identified as a participant in the transaction. [06-06-2019]

Links:

April 23, 2019

OFAC Venezuela General License 20

GENERAL LICENSE NO. 20

Authorizing Official Activities of Certain International Organizations Involving Banco Central de Venezuela

(a) Except as provided in paragraph (c) of this general license, all transactions and activities prohibited by Executive Order (E.O.) 13850, as amended by E.O. 13857 of January 25, 2019 (“Taking Additional Steps to Address the National Emergency With Respect to Venezuela”)

(E.O. 13850), that are for the official business of the following entities are authorized:

• CAF Development Bank of Latin America

• Fondo Latinoamericano de Reservas

• Inter-American Development Bank

• International Committee of the Red Cross

• International Federation of the Red Cross and Red Crescent Societies

• International Monetary Fund

• Organization of American States

• United Nations and its specialized agencies, programs, funds, and related

organizations

• WorldBank

(b) This authorization automatically renews on the first day of each month, and is valid for a period of 18 months from the effective date of General License No. 20 or the date of any subsequent renewal of General License No. 20, whichever is later.

(c) This general license does not authorize:

(1) The unblocking of any property blocked pursuant to E.O. 13850, or any part of 31 C.F.R. chapter V, except as authorized by paragraph (a); or

(2) Any transactions or dealings otherwise prohibited by E.O. 13850, E.O. 13835 of May 21, 2018, E.O. 13827 of March 19, 2018, E.O. 13808 of August 24, 2017, E.O. 13692 of March 8, 2015, each as amended by E.O. 13857, or any part of 31 C.F.R. chapter V, or any transactions or dealings with any blocked person other than Banco Central de Venezuela.

April 23, 2019

OFAC Venezuela General License 19

GENERAL LICENSE NO. 19

Authorizing Certain Activities Necessary to the Wind Down of Operations or Existing Contracts Involving Banco Central de Venezuela

(a) Except as provided in paragraph (b) of this general license, all transactions and activities prohibited by Executive Order (E.O.) 13850, as amended by E.O. 13857 of January 25, 2019 (“Taking Additional Steps to Address the National Emergency With Respect to Venezuela”), that are ordinarily incident and necessary to the wind down of operations, contracts, or other agreements involving Banco Central de Venezuela that were in effect prior to April 17, 2019, are authorized through 12:01 a.m. eastern daylight time, May 17, 2019.

(b) This general license does not authorize:

(1) Any debit to an account of Banco Central de Venezuela on the books of a U.S. financial institution; or

(2) Any transactions or dealings otherwise prohibited by E.O. 13850, E.O. 13835 of May 21, 2018, E.O. 13827 of March 19, 2018, E.O. 13808 of August 24, 2017, E.O. 13692 of

March 8, 2015, each as amended by E.O. 13857, or any part of 31 C.F.R. chapter V, or any transactions or dealings with any blocked person other than Banco Central de Venezuela.

April 22, 2019

On the last day at ACAMS: Venezuela and Nicaragua Sanctions updates

Last Wednesday, OFAC designated the following person:

RUZZA TERAN, Iliana Josefa (Latin: RUZZA TERÁN, Iliana Josefa), Caracas, Venezuela; DOB 27 Feb 1980; Gender Female; Cedula No. 14310920 (Venezuela) (individual) [VENEZUELA].

and entity:

BANCO CENTRAL DE VENEZUELA (a.k.a. CENTRAL BANK OF VENEZUELA), Av. Urdaneta, Esquina Las Carmelitas, Edif. Banco Central, Caracas, Venezuela; Av. Urdaneta, Esquina de Carmelitas, Distrito Capital, Caracas 1010, Venezuela; SWIFT/BIC BCVEVECA; Tax ID No. G200001100 (Venezuela) [VENEZUELA-EO13850].

under its Venezuela sanctions program, and the following person:

ORTEGA MURILLO, Laureano Facundo (a.k.a. ORTEGA, Laureano); DOB 20 Nov 1982; POB Managua, Nicaragua; nationality Nicaragua; Gender Male; Passport A00000684 (Nicaragua) expires 26 Sep 2023; National ID No. 0012011820046M (individual) [NICARAGUA].

and entity:

BANCO CORPORATIVO SA (a.k.a. “BANCO NACIONAL”; a.k.a. “BANCO NATIONAL”; a.k.a. “BANCORP”; a.k.a. “NATIONAL BANK”), 2 Cuadras Aloeste y 3 Cuadras Alnorte, Managua, Nicaragua; SWIFT/BIC BOFPNIMA [NICARAGUA].

under its Nicaragua program.

OFAC also updated 5 existing General Licenses (old names: 3D, 4A, 9C, 15 & 16) and issued two new ones (19 & 20).

They also issued one new Frequently Asked Question (FAQ):

665. Will the designation of Banco Central de Venezuela, or the Central Bank of Venezuela, restrict the ability of U.S. persons to engage in or facilitate the provision of humanitarian assistance or non-commercial, personal remittances to Venezuela?

No. OFAC is committed to ensuring that humanitarian assistance and non-commercial, personal remittances can flow to the people of Venezuela. To that end, concurrent with the designation of Banco Central de Venezuela, OFAC has issued amendments to current Venezuela-related general licenses and issued a new general license to ensure that U.S. persons may continue to engage in and facilitate non-commercial, personal remittances and the provision of humanitarian assistance to the people of Venezuela.

Regarding humanitarian transactions, OFAC has updated General License 4A “Authorizing New Debt Transactions and Transactions involving Certain Banks Related to the Exportation or Reexportation of Agricultural Commodities, Medicine, Medical Devices or Replacement Parts and Components” to include Banco Central de Venezuela in the authorization for transactions ordinarily incident and necessary 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, or for items not subject to the Export Administration Regulations, is not listed under any multilateral export control regime. Furthermore, OFAC maintains a specific licensing regime that can evaluate on a case-by-case basis the authorization of humanitarian activities not covered under general licenses.

OFAC has also revised General License 16 “Authorizing Maintenance of U.S. Person Accounts and Noncommercial, Personal Remittances involving Certain Banks” to include Banco Central de Venezuela to authorize all transactions and activities ordinarily incident and necessary to processing noncommercial, personal remittances involving certain banks (including Banco Central de Venezuela) through 12:01 a.m. eastern daylight time, March 22, 2020, as long as the transactions are not otherwise prohibited by OFAC’s Venezuela sanctions program.

In addition, OFAC is issuing General License 20 “Authorizing Official Activities of Certain International Organizations Involving Banco Central de Venezuela” to authorize international organizations such as the United Nations and its specialized agencies and the International Committee of the Red Cross, among others, to engage in transactions with Banco Central de Venezuela to the extent the transactions are subject to U.S. jurisdiction. Sanctions do not prohibit U.S. persons from engaging in transactions involving Venezuela (such as exporting or re-exporting items to Venezuela), provided that the transactions do not involve sanctioned individuals or entities or certain prohibited activity.

If individuals, companies, or financial institutions have questions about engaging in or processing transactions related to non-commercial, personal remittances or the provision of humanitarian assistance to Venezuela, they can contact OFAC’s Sanctions Compliance and Evaluation Division at (800) 540-6322 or (202) 622-2490. [04-17-2019]

Treasury issued a press release about Venezuela:

Treasury Sanctions Central Bank of Venezuela and Director of the Central Bank of Venezuela

April 17, 2019

Washington – Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Banco Central de Venezuela, or the Central Bank of Venezuela, pursuant to E.O. 13850, as amended, for operating in the financial sector of the Venezuelan economy. Additionally, OFAC designated Iliana Josefa Ruzza Terán (Ruzza), pursuant to E.O. 13692, as amended, who is determined to be a current or former official of the Government of Venezuela.

“Treasury is designating the Central Bank of Venezuela to prevent it from being used as a tool of the illegitimate Maduro regime, which continues to plunder Venezuelan assets and exploit government institutions to enrich corrupt insiders,” said Treasury Secretary Steven T. Mnuchin. “The United States is committed to helping the Venezuelan people. While this designation will inhibit most Central Bank activities undertaken by the illegitimate Maduro regime, the United States has taken steps to ensure that regular debit and credit card transactions can proceed and personal remittances and humanitarian assistance continue unabated and are able to reach those suffering under the Maduro regime’s repression.”

This action targets a key entity and individual in Venezuela’s financial sector, which the Maduro regime continues to exploit in order to stay in power, and illustrates the Trump Administration’s resolve to prevent the Maduro regime from gaining access to the U.S. financial system, including through Venezuela’s central bank.

Today, OFAC designated the following persons:

• Banco Central de Venezuela is the central bank of Venezuela, and is based in Caracas. Multiple OFAC-designated individuals currently hold leadership positions with the Banco Central de Venezuela, including Simon Alejandro Zerpa Delgado and William Antonio Contreras, both of whom are Directors of the bank and were designated by OFAC pursuant to E.O. 13692 in 2017 and 2018, respectively.

• Iliana Josefa Ruzza Terán is a Director of Banco Central de Venezuela. Additionally, Ruzza was appointed in July 2018 as a Director on the Board of Directors for the Venezuelan Department of Foreign Commerce, also known as CORPOVEX, and was appointed in May 2018 to be the Vice President of Finance of Petroleos de Venezuela, S.A., which was designated on January 28, 2019, pursuant to E.O. 13850.

Concurrent with this designation, OFAC has issued amendments to current Venezuela-related general licenses and issued new general licenses, which include authorizations to ensure that U.S. persons may continue to engage in and facilitate non-commercial, personal remittances and the provision of humanitarian assistance to the people of Venezuela.

For information about the methods that Venezuelan senior political figures, their associates, and front persons use to move and hide corrupt proceeds, including how they try to exploit the U.S. financial system and real estate market, please refer to Treasury’s Financial Crimes Enforcement Network (FinCEN) advisories FIN-2017-A006, “Advisory on Widespread Public Corruption in Venezuela,” FIN-2017-A003, “Advisory to Financial Institutions and Real Estate Firms and Professionals” and FIN-2018-A003, “Advisory on Human Rights Abuses Enabled by Corrupt Senior Foreign Political Figures and their Financial Facilitators.”

As a result of today’s action, all property and interests in property of this entity and individual, and any entity that is owned, directly or indirectly, 50 percent or more by the designated entity or individual, that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons.

U.S. sanctions need not be permanent; sanctions are intended to bring about a positive change of behavior. The United States has made clear that the removal of sanctions is available for persons designated under E.O. 13692 or E.O. 13850, both as amended, who take concrete and meaningful actions to restore democratic order, refuse to take part in human rights abuses, speak out against abuses committed by the illegitimate Maduro regime, and combat corruption in Venezuela.

and Nicaragua:

Treasury Targets Finances of Nicaraguan President Daniel Ortega’s Regime

April 17, 2019

WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Laureano Ortega Murillo, the son of Nicaraguan President Daniel Ortega and Vice President Rosario Murillo, as well as Nicaraguan bank Banco Corporativo SA (BanCorp). Today’s action, taken pursuant to Executive Order (E.O.) 13851, targets corrupt financial operations and Ortega regime support networks. The individual and entity designated today support a regime that, since April 2018, has cracked down on political opposition, leading to the death of 325 persons, the injury of more than 2,000, the imprisonment of hundreds of political and civil society actors, and over 42,000 Nicaraguans seeking refuge in Costa Rica.

“President Ortega, Vice President Murillo, and members of their inner circle continue to engage in blatant corruption, violence, and violations of basic human rights. The corrupt Ortega regime has ignored the Nicaraguan people’s calls for reform, including the freeing of all political prisoners, and early transparent elections,” said Sigal Mandelker, Under Secretary of the Treasury for Terrorism and Financial Intelligence. “Treasury is sanctioning Laureano Ortega Murillo and BanCorp for their roles in corruption and money laundering for the personal gain of the Ortega regime. These actions send a message to all who continue to prop up the Ortega regime that there is a steep price to pay for abusing the Nicaraguan economy and its people.”

As a result of today’s actions, all property and interests in property of these persons, and of any entities that are owned, directly or indirectly, 50 percent or more by these persons, that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. OFAC’s regulations generally prohibit all dealings by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons. Further details on these designations are included below.

Banco Corporativo SA

BanCorp is being designated for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, Vice President Rosario Murillo, a person whose property and interests in property are blocked pursuant to E.O. 13851, and for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, any transaction or series of transactions involving corruption by, on behalf of, or otherwise related to the Government of Nicaragua or a current official of the Government of Nicaragua. Created as a subsidiary to the Venezuelan government-funded Alba de Nicaragua, S.A. (ALBANISA) in 2014, BanCorp is a bank used by the Ortega regime to launder and hide ALBANISA money. BanCorp is also reportedly used by President Ortega’s ruling Sandinista National Liberation Front (FSLN) party to launder money. Finally, as of 2018, BanCorp has been a haven for OFAC sanctioned persons, allowing designated individuals to continue enjoying banking privileges and their ill-gotten wealth.

BanCorp, as a subsidiary of ALBANISA, is ultimately owned by PETROLEOS DE VENEZUELA, S.A. (PdVSA) and, as such, was blocked by operation of law following the January 28, 2019, designation of PdVSA pursuant to E.O. 13850.

Laureano Ortega Murillo

Laureano Ortega Murillo (Laureano) is being designated for being a current official of the Government of Nicaragua. In his role as the Investment Promotion Advisor of the Nicaraguan government agency, ProNicaragua, Laureano acts as an extension of President Ortega and Vice President Murillo, overseeing investment proposals and projects. However, as of 2018, Laureano engaged in corrupt business deals in which foreign investors paid for preferential access to the Nicaraguan economy. Additionally, Laureano coordinated executive tasks for the Nicaragua Grand Canal project, and was at the center of its creation. Despite the project’s loss of momentum, Ortega regime figures, including Laureano, continue to use the Nicaragua Grand Canal Company as a means to launder money and to acquire property along the planned canal route.

And State, not to be outdone, issued two also – one for Venezuela:

The United States Sanctions the Central Bank of Venezuela

Media Note

Office of the Spokesperson

Washington, DC

April 17, 2019

Today, the United States has taken further action to halt the former Maduro regime’s theft of Venezuela’s assets and destruction of the economy.

The United States has sanctioned the Central Bank of Venezuela (BCV) for operating in the financial sector of the Venezuelan economy, pursuant to Executive Order 13850. Additionally, Iliana Josefa Ruzza Teran, a director of BCV, has been designated pursuant to Executive Order 13692.

As the central bank of Venezuela, the BCV formulates and implements Venezuela’s monetary policy, issues currency, and manages the country’s international reserves. The regime’s failed policies have turned a once prosperous nation into an economic disaster, while Nicolas Maduro used the BCV as a tool to remain in power and enrich himself and his corrupt circle at the expense of the Venezuelan people.

These new sanctions do not target the innocent people of Venezuela. They will not prohibit humanitarian assistance or personal remittances, which are desperately needed after years of corruption and mismanagement by the regime. In connection with these actions, the Department of the Treasury is taking several licensing-related actions that are in the interest of a democratic and prosperous Venezuela. These actions include measures to help ensure the regular processing of debit and credit card transactions, and the provision of humanitarian assistance. Licensing-related actions will also include a wind-down period for commercial operations or existing contracts involving the BCV.

The United States is committed to helping the Venezuelan people’s struggle to restore democracy and prosperity to Venezuela. By defeating Maduro’s tyranny, all Venezuelans will be free to rebuild their nation and regain the international standing and stability it deserves.

and one for Nicaragua:

Additional Financial Sanctions Against Nicaragua

Media Note

Office of the Spokesperson

Washington, DC

April 17, 2019

Today, the United States has affirmed its commitment to use all economic and diplomatic tools to promote accountability for the Ortega regime and to support the Nicaraguan people in their quest for freedom.

The United States has sanctioned Laureano Ortega and Banco Corporativo SA (Bancorp), pursuant to Executive Order 13851, which President Trump signed November 27, 2018. Because of this action, their U.S. assets are frozen and U.S. persons are generally prohibited from transactions with Laureano Ortega and Bancorp.

Laureano Ortega, son of President Daniel Ortega and Vice President Rosario Murillo, is a key enabler of the Ortega regime’s corruption. On the regime’s behalf, he has sought international financial support and foreign investment. In doing so, he has placed the interests of his family and his personal fortune ahead of the interests of the Nicaraguan people by engaging in corrupt business deals. Bancorp has served as the personal slush fund for the Ortega family and the instrument for corrupt deals with Nicolas Maduro and his former regime in Venezuela.

We urge the Ortega regime to restore democratic order in Nicaragua and heed the calls of Nicaraguans clamoring for early free, fair, and transparent elections. The regime must also abide by the commitments it has already made, including under the Inter-American Democratic Charter. We call on Nicaragua to unconditionally and fully release arbitrarily detained persons and protect the fundamental human rights of its citizens. We will continue to promote accountability for those who have demonstrated a blatant disregard for human rights and fomented violence in support of the Ortega regime.

This post is long enough already – the new General Licenses will be published separately.“

Links:

Treasury Press Release – Venezuela

Treasury Press Release – Nicaragua

State Department Venezuela Press Release

State Department Nicaragua Press Release

March 25, 2019

Venezuela General License 18

GENERAL LICENSE NO. 18

Authorizing Certain Transactions Involving Integraci6n Administradora de Fondos de Ahorro Previsional, S.A.

(a) Except as provided in paragraph (c) of this general license, all transactions and activities prohibited by Section l(b) of Executive Order (E.O.) 13808, as amended by E.O. 13857 of January 25, 2019 (“Taking Additional Steps to Address the National Emergency With Respect to Venezuela”), or E.O. 13850, as amended by E.O. 13857, that are ordinarily incident and necessary to maintain or operate lntegraci6n Administradora de Fondos de Ahorro Previsional, S.A., whose fund administrator is owned 50 percent or more by Banco Bandes Uruguay S.A. (Bandes Uruguay), are authorized.

(b) For the purposes of this general license, the transactions and activities authorized in paragraph (a) include the purchase from or sale to the Integraci6n Administradora de Fondos de Ahorro Previsional, S.A. of securities or serving as a custodian for securities held by the Integraci6n Administradora de Fondos de Ahorro Previsional, S.A.

(c) This general license does not authorize:

(1) Any transactions or dealings with Banco de Desarrollo Economico y Social de Venezuela (BANDES), or any transactions or dealings with Bandes Uruguay, other than as authorized by paragraph (a) of this general license;

(2) The unblocking of any property blocked pursuant to E.O. 13850, as amended by E.O. 13857, or any part of 31 C.F.R. chapter V, except as authorized by paragraph (a); or

(3) Any transaction that is otherwise prohibited under E.O. 13850 of November 1, 2018, E.O. 13835 of May 21, 2018, E.O. 13827 of March 19, 2018, E.O. 13808 of August 24, 2017, E.O. 13692 of March 8, 2015, each as amended by E.O. 13857, or any part of 31 C.F.R. chapter V, or any transactions or dealings with any blocked person other than the blocked persons described in paragraph (a) of this general license.