President Trump Expands Sanctions Targeting Maduro Regime
"Embargo" order blocks property of Government of Venezuela and authorizes sanctions.
On August 5, 2019, President Trump signed Executive Order 13884 ("E.O. 13884") blocking the property of the Government of Venezuela and authorizing sanctions against a range of additional persons. In connection with E.O. 13884, the Department of the Treasury's Office of Foreign Assets Control ("OFAC") issued 13 new general licenses ("GLs"), 12 amended GLs, new and revised FAQs, and guidance on humanitarian authorizations.
Although Administration officials heralded E.O. 13884 as an "embargo" in the style of earlier measures against Cuba, its immediate impact appears somewhat less restrictive than a true embargo. As FAQ No. 519 states—and the humanitarian guidance underscores—"the Venezuelan people are not subject to comprehensive U.S. sanctions," and U.S. persons are not prohibited from exporting or reexporting items to Venezuela provided the transactions do not involve sanctioned individuals or entities or certain prohibited activities and are consistent with Commerce Department-administered export controls. E.O. 13884 prohibits transactions involving the Maduro-led "Government of Venezuela" (defined broadly, and including its political subdivisions, agencies, and instrumentalities and their respective subsidiaries and agents) while GL No. 31 authorizes certain transactions involving Interim President Juan Guaido, the Venezuelan National Assembly, and Guaido’s appointees, whom the United States recognizes as the legitimate Government of Venezuela.
E.O. 13884 raises a new threat of sanctions against persons engaging in certain Venezuela-related transactions, including transactions with no U.S. nexus. It blocks the property of, among others, persons determined to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, persons included on OFAC's list of Specially Designated Nationals and Blocked Persons whose property and interests in property are blocked pursuant to E.O. 13884. The effect of this provision will depend on how the Treasury Department wields E.O. 13884's designation authorities.
These new measures add to an already complex array of Venezuela-related prohibitions, licenses, and designation risks. Parties contemplating transactions (including in the context of litigation) involving Venezuelan assets or counterparties should take care to understand whether a transaction is prohibited by an Executive Order, authorized by a license, or "sanctionable" under a Treasury-administered designation authority.
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