OFAC Alert: OFAC Expanded Its Venezuela-related Sanctions

On January 6, 2019, the Office of Foreign Assets Control (“OFAC”) amended its regulations to prohibit any transactions or dealings related to the exportation or re-exportation of diluents. Specifically, OFAC amended General Licenses 7A (“Authorizing Certain Activities Involving PDV Holding, Inc. and CITGO Holding, Inc.”), 8 (“Authorizing Transactions Involving Petróleos de Venezuela, S.A. (PDVSA) Prohibited by Executive Order 13850 for Certain Entities Operating in Venezuela”), and 13 (“Authorizing Certain Activities Involving Nynas AB”).

Additionally, OFAC amended its guidelines to advise that non-U.S. persons that export or reexport diluents to PDVSA may be added to the Specially Designated Nationals and Blocked Persons List (SDN List). Accordingly, “persons directly or indirectly exporting or reporting 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.”

OFAC made these amendments to its regulations after considering that diluents such as naphtha and crude oil “play a key role in the transportation and exportation of Venezuelan petroleum, a primary source of revenue for the illegitimate and corrupt Maduro regime.”

Michael Diaz, Jr., Javier Coronado
Tel: +1 (305) 375-9220