Venezuela sanctions

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…

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:

OFAC Notice

General License 7B

General License 8A

General License 13A

FAQ 672

On Friday, OFAC added the following entities:

MONSOON NAVIGATION CORPORATION, Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro MH96960, Marshall Islands; Identification Number IMO 5403673 [VENEZUELA-EO13850]. 

 

SERENITY MARITIME LIMITED (a.k.a. SERENITY MARITIME LTD.; a.k.a. SERENITY MARITIME LTD-LIB), Broad Street 80, Monrovia 1000, Liberia [VENEZUELA-EO13850].

and cargo vessels:

LEON DIAS Chemical/Oil Tanker Panama flag; Vessel Registration Identification IMO 9396385 (vessel) [VENEZUELA-EO13850] (Linked To: SERENITY MARITIME LIMITED). 

 

OCEAN ELEGANCE Crude Oil Tanker Panama flag; Vessel Registration Identification IMO 9038749 (vessel) [VENEZUELA-EO13850] (Linked To: MONSOON NAVIGATION CORPORATION).

to its Venezuela sanctions program.

Additionally, the following non-proliferation listing:

BEURKLIAN, Anni (a.k.a. AJAKA, Anni); DOB 17 May 1969; nationality Lebanon; citizen United States (individual) [NPWMD] (Linked To: KATRANGI, Amir). -to- BEURKLIAN, Anni (a.k.a. AJAKA, Anni), Lebanon; Bsalim, Majzoub St. #701, Bldg. #254, 3rd floor, Beirut, Lebanon; DOB 17 May 1969; nationality Lebanon; citizen United States(individual) [NPWMD] (Linked To: KATRANGI, Amir).

and counter-terrorism listing:

BSQRD LIMITED, Mansion House Manchester Road, Altrincham Chesire WA14 4RW, United Kingdom; Additional Sanctions Information – Subject to Secondary Sanctions Pursuant to the Hizballah Financial Sanctions Regulations; D-U-N-S Number 22-369-0096; Company Number 11207847 (United Kingdom) [SDGT] (Linked To: BAZZI, Wael). -to- BSQRD LIMITED, Mansion House Manchester Road, Altrincham Cheshire WA14 4RW, United Kingdom; Additional Sanctions Information – Subject to Secondary Sanctions Pursuant to the Hizballah Financial Sanctions Regulations; D-U-N-S Number 22-369-0096; Company Number 11207847 (United Kingdom) [SDGT] (Linked To: BAZZI, Wael).

were updated.

And the US Treasury:

Treasury Identifies the Venezuelan Defense and Security Sector as Subject to Sanctions and Further Targets Venezuelan Oil Moving to Cuba

Washington – Today, Secretary of the Treasury Steven T. Mnuchin, in consultation with Secretary of State Michael Pompeo, and pursuant to Executive Order (E.O.) 13850, as amended, determined that persons operating in the defense and security sector of the Venezuelan economy may be subject to sanctions.  In addition, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated two companies that operate in the oil sector of the Venezuelan economy, pursuant to E.O. 13850, as amended.  OFAC has also identified two vessels, which transported oil from Venezuela to Cuba, as blocked property owned by the two companies. 

“Treasury’s action today puts Venezuela’s military and intelligence services, as well as those who support them, on notice that their continued backing of the illegitimate Maduro regime will be met with serious consequences,” said Treasury Secretary Steven T. Mnuchin. “The U.S. will take further action if Cuba continues to receive Venezuelan oil in exchange for military support. As we have repeatedly said, the path to sanctions relief for those who have been sanctioned is to take concrete and meaningful actions to restore democratic order.”

Today’s designations, which are a direct response to SEBIN’s illegal arrest of National Assembly members, is intended to target those actors who have had a hand in the repressive Maduro defense and intelligence sector. This includes Venezuela’s oil sector, which continues to be critical to the survival of the illegitimate regime of former President Maduro:

  • Monsoon Navigation Corporation is based in Majuro, Marshall Islands, and is the registered owner of the vessel, Ocean Elegance.
    • Ocean Elegance is a crude oil tanker (IMO: 9038749) that delivered crude oil from Venezuela to Cuba from late 2018 through March 2019.
  • Serenity Maritime Limited is based in Monrovia, Liberia, and is the registered owner of the vessel, Leon Dias.
    • Leon Dias is a chemical and oil tanker (IMO: 9396385) that delivered crude oil from Venezuela to Cuba from late 2018 through March 2019.

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-2019-A002, “Updated Advisory on Widespread Public Corruption in Venezuela,” FIN-2017-A006, “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 these entities, and of any entities that are owned, directly or indirectly, 50 percent or more by the designated entities, 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.  For example, on May 7, 2019, OFAC removed sanctions imposed on former high-ranking Venezuelan intelligence official Manuel Ricardo Cristopher Figuera after his public break with Maduro.  The United States continues to make 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, or combat corruption in Venezuela.

and State Departments:

The United States Sanctions Venezuela’s Defense and Security Sector

Media Note

Office of the Spokesperson

Washington, DC

May 10, 2019


Today, the United States took action against the former Maduro regime for increasing its intimidation of those supporting democracy in Venezuela, including members of the democratically elected National Assembly. Pursuant to E.O. 13850, the United States determined persons operating in the defense and security sector of the Venezuelan economy may be subject to sanctions.

In addition, we have designated two companies, Monsoon Navigation Corporation and Serenity Maritime Limited, that operate in the oil sector. We have also identified two vessels that transported oil from Venezuela to Cuba as blocked property.

The Venezuelan people continue to suffer at the hands of this despotic regime, aided in no small part by Cuba and Russia. Cuban forces provide intelligence and physical security to help oppress the Venezuelan people. Russian military personnel and companies operate in the defense and security sector. The Maduro regime’s latest cowardly gambit – the arbitrary detention of National Assembly First Vice President Edgar Zambrano – is illegal and inexcusable.

We call on all actors within the defense and security sector to protect and defend the rights of all Venezuelans.

Today’s determination allows the United States to take action against the malign actors that are impeding the will of the courageous Venezuelan people, who demand democracy. The United States continues to stand with them, their interim President Juan Guaido, and the National Assembly, as they work to peacefully restore constitutional order and prosperity to their country.

issued press releases.

Links:

OFAC Notice

Press Releases: Treasury, State

On Tuesday, OFAC removed:

CRISTOPHER FIGUERA, Manuel Ricardo, Caracas, Capital District, Venezuela; DOB 08 Nov 1963; Gender Male; Cedula No. 8375799 (Venezuela) (individual) [VENEZUELA].

from its Venezuela sanctions program, and the Treasury Department issued a corresponding press release:

Treasury Removes Sanctions Imposed on Former High-Ranking Venezuelan Intelligence Official After Public Break with Maduro and Dismissal

Washington – Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) removed sanctions imposed on Manuel Ricardo Cristopher Figuera (Cristopher), who last week broke ranks with the Maduro regime and rallied to the support of the Venezuelan constitution and the National Assembly.  Cristopher is the former Director General of Venezuela’s National Intelligence Service, more commonly known as SEBIN. 

 

On February 15, 2019, OFAC designated Cristopher pursuant to Executive Order (E.O.) 13692 for being a current or former official of the Government of Venezuela.  Today’s action, taken in consultation with the U.S. Department of State, demonstrates that U.S. sanctions need not be permanent and are intended to bring about a positive change of behavior. 

 

The delisting of Cristopher also shows the good faith of the United States that removal of sanctions may be available for designated persons 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, or combat corruption in Venezuela.

 

As a result of today’s action, all property and interests in property, which had been blocked solely as a result of Cristopher’s designation, are unblocked and all otherwise lawful transactions involving U.S. persons and Cristopher are no longer prohibited.

Links:

OFAC Notice

Treasury Press Release

Updated FinCEN Advisory Warns Against Continued Corrupt Venezuelan Attempts to Steal, Hide, or Launder Money 

Contact
Public Affairs, 703-905-3770
Immediate Release

WASHINGTON—The Financial Crimes Enforcement Network (FinCEN) today issued an updated advisory to alert financial institutions of continued widespread public corruption in Venezuela and the methods Venezuelan senior political figures and their associates may use to move and hide proceeds of their corruption. In addition to outlining the corrupt looting of Venezuela’s government-sponsored food distribution program, the advisory provides and updates a number of financial red flags to assist in identifying and reporting suspicious activity that may be indicative of corruption. 

“Corrupt Maduro insiders continue to seek illicit revenue streams, even as the Venezuelan people and economy sink deeper into despair. We are alerting financial institutions that the Maduro regime is using sophisticated schemes, including the diversion of humanitarian assistance, to evade sanctions and maintain its grip on power,” said Sigal Mandelker, Under Secretary of the Treasury for Terrorism and Financial Intelligence. “The international financial community must be vigilant to prevent exploitation by corrupt regime insiders and their enablers, including front companies and foreign financial institutions that continue to prop up this illegitimate regime.”

“The Venezuelan people are being preyed upon by the illegitimate Maduro regime and their allies and acolytes, who are starving the Venezuelan people, depriving them of medical care, and using them as tools to support the regime’s thirst for money and power,” said FinCEN Director Kenneth A. Blanco. “The Venezuelan people are suffering an epic tragedy the proportions of which are rarely, if ever, seen in the Western hemisphere because of the greed and corruption by the illegitimate Maduro regime. The United States will not allow our financial system to be abused for the benefit of foreign kleptocrats trying to stash their secret fortunes and buy homes, yachts, and airplanes in the United States and create ever more wealth for the Maduro regime’s inhumane purposes. This money rightfully belongs to the people of Venezuela. FinCEN and its financial institution partners will continue to work together to cut off the flow of dirty money.”

On January 23, 2019, the United States recognized the President of the Venezuelan National Assembly, Juan Guaidó, as the Interim President of Venezuela and the legitimate leader of the Venezuelan people. The illegitimate regime of former Venezuelan president Nicolas Maduro has engaged in massive corruption through state-owned enterprises and offshore third parties. In recent years, financial institutions have reported increased activity with suspected links to Venezuelan public corruption, including government contracts. 

FinCEN is warning of the misuse of Venezuela’s government-sponsored food distribution program called Los Comités Locales de Abastecimiento y Producción (“Local Supply and Production Committees”) which is commonly referred to as the “CLAP program.” CLAP was created in 2016 for the publicly stated purpose of providing subsidized food rations to Venezuelan citizens. The illegitimate former Maduro regime is using the CLAP program to provide subsidized food to its supporters, withhold food from ordinary Venezuelan citizens and those critical of the regime, and enrich corrupt regime insiders and their allies through embezzlement, price manipulation, and trade-based money laundering schemes using front and shell companies. 

The Maduro regime also has experimented with the use of digital currency to circumvent sanctions and generate revenue. It has developed a digital currency called the “petro” and reportedly continues to develop new tokens. In 2018, the Russian bank Evrofinance Mosnarbank emerged as the primary international financial institution willing to finance the petro. In March of 2019, Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Evrofinance Mosnarbank for materially assisting, sponsoring, or providing financial, material, or technological support for, or goods or services to or in support of, Petroleos de Venezuela S.A. (PdVSA). Financial institutions are reminded that Executive Order (E.O.) 13827 prohibits U.S. persons from any involvement in the petro digital currency.

Financial institutions should take risk-based steps to identify and limit any exposure they may have to funds and other assets associated with Venezuelan public corruption fueled by the Maduro regime. However, financial institutions should be aware that normal business and other transactions involving Venezuelan nationals and businesses do not necessarily represent the same risk as transactions and relationships identified as being connected to the former Venezuelan regime.

What is different in this version of the advisory?

These updates to the 2017 Venezuela Advisory primarily:

(1) renew the description of public corruption in Venezuela;

(2) add information regarding example U.S. Government actions;

(3) describe how corrupt Venezuelan senior political figures exploit a Venezuelan government- administered food program by directing overvalued, no-bid contracts to co-conspirators that use an over-invoicing trade-based money laundering (TBML) scheme that can involve (i) front4 or shell5 companies to layer and obfuscate financial transactions; (ii) non-dollar denominated accounts; and (iii) nested accounts in an attempt to evade sanctions and anti- money laundering and countering the financing of terrorism (AML/CFT) controls;

(4) highlight the attempt to use digital assets, specifically digital currency, to evade sanctions and AML/CFT controls by the corrupt illegitimate regime of Nicolas Maduro; and

(5) provide revised financial red flags to assist in identifying and reporting to FinCEN suspicious activity that may be indicative of corruption by Venezuelan senior political figures, including (i) the abuse of Venezuelan government contracts, particularly those from non-official Venezuelan government accounts located in jurisdictions outside Venezuela and (ii) transactions for the purchase of high value assets, such as aircraft and real estate6 that are not commensurate with the official salaries of the corrupt Venezuelan senior political figures making the purchase.

Links:

FinCEN Notice

FinCEN Advisory

On Friday, OFAC added:

ARREAZA MONTSERRAT, Jorge Alberto (a.k.a. ARREAZA, Jorge), Caracas, Capital District, Venezuela; DOB 06 Jun 1973; Gender Male; Cedula No. 11945178 (Venezuela) (individual) [VENEZUELA]. 

 

PADILLA DE ARRETURETA, Carol Bealexis, Caracas, Capital District, Venezuela; DOB 19 Feb 1972; Gender Female; Cedula No. 11763586 (Venezuela) (individual) [VENEZUELA].

to their sanctions on Venezuela.

And the Treasury Department issued the following press release:

Treasury Sanctions Venezuelan Minister of Foreign Affairs 

Washington – Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated, pursuant to E.O. 13692, as amended, Jorge Alberto Arreaza Montserrat, the Venezuelan Minister of Foreign Affairs, and Carol Bealexis Padilla de Arretureta, both of whom were determined to be current or former officials of the Government of Venezuela.

“The United States will not stand by and watch as the illegitimate Maduro regime starves the Venezuelan people of their wealth, humanity, and right to democracy,” said Treasury Secretary Steven T. Mnuchin. “Treasury will continue to target corrupt Maduro insiders, including those tasked with conducting diplomacy and carrying out justice on behalf of this illegitimate regime.  This Administration stands with the Venezuelan people, and alongside an international coalition committed to holding accountable those who are responsible for Venezuela’s tragic decline.”

Today, OFAC designated the following persons:

  • Jorge Alberto Arreaza Montserrat was appointed the Venezuelan Minister of Popular Power for Foreign Affairs in August 2017.  Arreaza also held the following official positions prior to his appointment as Venezuela’s Foreign Minister:  from 2010 to 2011, Arreaza was the Vice Minister of Scientific and Technological Development of the Ministry of Popular Power for Science, Technology, and Intermediate Industries; from 2011 until 2013, Arreaza was the Minister of Popular Power for Science, Technology, and Innovation; between 2013 and 2016, Arreaza was the Executive Vice President of Venezuela; in 2017, Arreaza was appointed the Minister of the People’s Power of Ecological Mining Development. 
  • Carol Bealexis Padilla de Arretureta is the judge in charge of the First Special Court of First Instance in Control Functions.  In December 2017, she was appointed as a substitute judge of the Court of Appeals of the criminal judicial circuit of the metropolitan area of Caracas. 

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 these individuals, and any entity that is owned, directly or indirectly, 50 percent or more by the designated individuals, 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.

as did the State Department:

The United States Sanctions Maduro-Aligned Individuals

Media Note

Office of the Spokesperson

Washington, DC

April 26, 2019


Today, the United States sanctioned two officials aligned with the former Maduro regime pursuant to Executive Order 13962, which allows for the designation of any person determined to be a current or former official of the Government of Venezuela. Jorge Alberto Arreaza Montserrat was the Minister of Foreign Affairs and Carol Bealexis Padilla de Arretureta is a judge associated with the March 21 detainment of Interim President Juan Guaido’s Chief of Staff Roberto Marrero.

Arreaza is at the forefront of the former Maduro regime’s attempts within the international community to thwart the democratic aspirations of the Venezuelan people. Padilla’s designation is a reminder that the ongoing detention of Roberto Marrero and the acts of intimidation against President Guaido and his supporters by the former Maduro regime will have consequences. We demand his immediate release.

If Nicolas Maduro and those aligned with him continue to use imprisonment and intimidation against the legitimate government and people of Venezuela, the United States will respond. With our democratic partners in the region and around the world, the United States will continue to support interim President Guaido, the National Assembly, and the people of Venezuela.

Links:

OFAC Notice

Treasury Press Release

State Department Press Release

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.