Companies Struggling With Recent OFAC General Licenses, Guidance on Venezuela
U.S. and foreign companies have “struggled” to interpret the scope of the U.S.’s most recent executive order and subsequent general licenses for Venezuela, leading some to submit requests for more guidance, according to an Aug. 22 post on the Winston & Strawn website.
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The Treasury Department's Office of Foreign Assets Control issued Venezuela-related frequently asked questions, general licenses and a sanctions guidance on Aug. 6 following President Donald Trump’s executive order that expanded certain sanctions on the country (see 1908060048). The nearly 30 new and amended general licenses contained important information, such as updated expiration dates for certain transactions, but lacked meaningful industry guidance, in the estimation of one trade lawyer (see 1908130035).
Winston & Strawn said this has led companies to seek clarification from OFAC. “U.S. companies have experienced challenges with accomplishing a total wind-down of Venezuela-related operations involving the Government within the time limit imposed by [General License 28],” the post said. The license allows for certain contracts with Venezuela to continue until Sept. 4.
Companies are also concerned over the lack of a “broad general license” that authorizes all activities “that are ordinarily incident and necessary” to complete transactions that are authorized by the general licenses, the post said. “The lack of this general license, normally available in other sanctions regimes, limits the usefulness of some of the newly issued and revised general licenses because many U.S. persons cannot conduct authorized transactions without dealing with the Government of Venezuela for transactions incident to the authorized activity,” the post said.
Companies may also be finding it difficult to trade exclusively with Venezuela’s private sector because they are banned from making payments through government-owned banks, the post said.
“U.S. companies facing these, and several other challenges as a result of the new sanctions, need to have answers and may need additional authorization or specific guidance from OFAC,” Winston & Strawn said. The law firm urged companies to ask for guidance before General License 28 expires, in about a week.