OFAC Alert: OFAC Expanded Its Venezuela-related Sanctions

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

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, ā€œpersons 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.ā€

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

Contact:
Michael Diaz, Jr., Javier Coronado
Tel: +1 (305) 375-9220
mdiaz@diazreus.com,Ā jcoronado@diazreus.com
www.diazreus.com