The U.S. Government has authorized a modern framework for operations related to Venezuela’s energy and logistics sectors. This action comes through the issuance of three general licenses enabling the commerce of Venezuelan oil, the provision of goods and services to the hydrocarbon industry, and transactions necessary for the operation of the country’s ports and airports. Importantly, sanctions against the Venezuelan regime and the state oil company, Petróleos de Venezuela (PDVSA), remain in place.
New Regulations Detail Permitted Activities
The provisions were published by the Office of Foreign Assets Control (OFAC) of the Department of the Treasury and are contained in General Licenses 46A, 48, and 30B, issued this Tuesday. General License 46A authorizes certain U.S. Companies to participate in the commercialization, transport, and refining of Venezuelan oil, even when PDVSA or entities controlled by the state oil company are involved. Activities covered include lifting, exporting, re-exporting, selling, supplying, storing, and transporting Venezuelan oil, including its refining, provided they are carried out by an entity established in the United States.
General License 48 authorizes the provision of goods, technology, and services from the United States for the exploration, development, production, and maintenance of oil and gas operations in Venezuela. This authorization extends to activities involving the Venezuelan regime, PDVSA, and its subsidiaries, provided contracts are subject to U.S. Law and payments follow the same financial control scheme. General License 30B authorizes transactions essential for the operation and leverage of Venezuelan ports and airports, covering activities involving the Venezuelan government and the National Institute of Aquatic Spaces (INEA) and its controlled entities.
The authorizations cover activities such as organizing maritime and logistics services, including chartering ships, obtaining marine insurance, and coordinating port and terminal services, as well as the repair and refurbishment of equipment used in oil and gas operations.
However, the licenses explicitly exclude operations with individuals or entities linked to Russia, Iran, North Korea, or Cuba, and prohibit transactions with companies in Venezuela or the United States controlled by Chinese companies. The use of cryptocurrencies, payments in gold, debt swaps, or operations with sanctioned ships are too prohibited.
What’s Next?
While the licenses ease some restrictions, they do not eliminate existing financial and commercial restrictions. All operations must continue to comply with the requirements of other federal agencies, including export controls. Companies trading Venezuelan oil to third countries will be required to submit detailed reports to the U.S. Government regarding the parties involved, volumes, values, final destinations, and any payments made to the Venezuelan state.
Frequently Asked Questions
What do these licenses authorize?
The licenses authorize certain U.S. Companies to engage in the commerce, transport, and refining of Venezuelan oil, provide goods and services to the Venezuelan hydrocarbon industry, and conduct transactions necessary for the operation of Venezuelan ports and airports.
Are all sanctions against Venezuela lifted?
No, the licenses do not eliminate or suspend the remaining financial and commercial restrictions. Sanctions against the Venezuelan regime and PDVSA remain in place.
What types of transactions are prohibited?
Transactions with individuals or entities linked to Russia, Iran, North Korea, or Cuba are prohibited, as are transactions with companies controlled by Chinese companies, the use of cryptocurrencies, payments in gold, debt swaps, and operations with sanctioned ships.
As these new regulations take effect, it remains to be seen how significantly they will impact the flow of Venezuelan oil and the broader energy market.
