Posted on:Featured, Insights, What's New
On May 21, 2018, President Trump issued an executive order imposing new sanctions on the Government of Venezuela. The new sanctions expand the scope of sanctions previously imposed by President Trump and President Obama. Previous sanctions targeted top government officials, including President Maduro, Vice President Tareck El Aissami and, more recently, the Vice President of the United Socialist Party of Venezuela (PSUV), Diosdádo Cabello.
Sanctions imposed on August 24, 2017 banned U.S. persons (including persons present in the United States, regardless of nationality) from participating in transactions related to, provision of financing for, and other dealings involving new debt issued by the Venezuelan Government and the State-owned oil company, Petróleos de Venezuela (PdVSA). The 2017 sanctions prohibited only certain transactions involving new debt with a specified maturity (greater than 90 days for debt issued by PdVSA and greater than 30 days for debt issued by the Government of Venezuela). At that time, the Office of Foreign Assets Control (“OFAC”) also issued four general licenses, which authorized certain transactions that otherwise would have been prohibited.
On March, 19, 2018, President Trump issued Executive Order 13827, which banned U.S. persons (including persons present in the United States, regardless of nationality) from participating in any transactions related to, provision of financing for, and other dealings in any digital currency, digital coin, or digital token, that was issued by, for, or on behalf of the Government of Venezuela on or after January 9, 2018.
The sanctions announced on May 21, one day after President Nicolás Maduro was re-elected for an additional six-year term, would further expand the scope of prohibited transactions involving Venezuela. The new sanctions are described as being motivated by recent “activities of the Maduro Regime,” which include “ongoing repression of the political opposition, attempts to undermine democratic order by holding snap elections that are neither free nor fair, and the regime’s responsibility for the deepening humanitarian and public health crisis in Venezuela.” These sanctions ban U.S persons (including persons present in the United States, regardless of nationality) from participating in transactions related to, financing for, and other dealings with respect to the following:
- the acquisition of any debt owed to the Government of Venezuela, including accounts receivable;
- any debt owed to the Government of Venezuela that is pledged as collateral, including accounts receivable;
- the sale, transfer, assignment, or pledging as collateral by the Government of Venezuela of any equity interest in any entity in which the Government of Venezuela has a 50 percent or greater ownership interest.
The new executive order also bans any transaction that evades or avoids, aims to evade or avoid, causes a violation of, or tries to violate any of the prohibitions established by the order and any conspiracy created to violate any of the prohibitions established by the order.
The executive order imposing the new sanctions on Venezuela can be found here.
This Alert is not intended to provide legal advice. If you have questions regarding its content, please contact Ted Posner or Glenda Bleiberg.