What You Need To Know
- The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued six new general licenses, and updated a seventh that allow for many activities related to: the export of Venezuelan oil and petrochemical products from Venezuela; the exploration, development, and production of oil, gas, and petrochemical products in Venezuela; the generation, transmission, storage, or distribution of electricity in Venezuela; the export to Venezuela of U.S.-origin diluents; negotiating for investment in the oil, gas, petrochemical, and electricity sectors in Venezuela; and the export of Venezuelan gold.
- The new general licenses contain a number of significant conditions, including in GLs 46B and 51, a limitation to the activities of “established U.S. entities,” and in GLs 46B, 47, 48A, 50A, and 51, limits on counterparties and operators, a prohibition on the involvement of entities with specific relationships to China, Cuba, Iran, North Korea, and Russia, or of sanctioned vessels, and contractual requirements to use U.S. law and U.S. dispute resolution mechanisms.
- This regulatory space is fast moving, with multiple changes occurring over a short time period, and any plan to rely on these general licenses and authorizations should include transaction-by-transaction assessment, along with monitoring by compliance and legal functions.