Treasury Department Publishes New General Licenses for Venezuela Sanctions
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The Department of the Treasury’s Office of Foreign Assets Control (OFAC) has released two important general licenses. These licenses are related to the Venezuela Sanctions Regulations. The licenses are called GL 50A and GL 51A. These licenses were already available on OFAC’s website but are now being formally published.
What GL 50A Allows
GL 50A allows certain transactions with Venezuela’s oil and gas sectors. These transactions were previously prohibited under the Venezuela Sanctions Regulations. Companies involved include Petróleos de Venezuela, S.A. (PdVSA) and its related entities. However, to use GL 50A, companies must follow specific rules. Contracts must state that U.S. laws govern any disputes. Payments to blocked persons must go into special accounts called Foreign Government Deposit Funds.
What GL 50A Does Not Allow
GL 50A does not allow unusual payment terms, like using debt swaps or digital currency. It also does not allow transactions with people or companies related to countries like Russia, Iran, North Korea, Cuba, and China. It does not unblock any property or involve blocked vessels.
Reporting Requirements for GL 50A
Anyone using GL 50A must file reports. The report must detail the parties involved in the transactions. It should also include descriptions, quantities, and dates of the transactions. Taxes or other payments to the Venezuelan government must also be reported. Reports are due within ten days of the first transaction and every 90 days during ongoing transactions.
Entities Allowed Under GL 50A
The entities allowed to engage under GL 50A include major companies like BP PLC, Chevron Corporation, Eni S.p.A., Maurel & Prom SA, Repsol S.A., and Shell PLC.
What GL 51A Allows
GL 51A permits specific activities involving Venezuelan-origin minerals, including gold. These activities used to be prohibited under the sanctions. Like GL 50A, contracts under GL 51A require U.S. law to govern them. Payments to blocked persons must be made into designated accounts.
What GL 51A Does Not Allow
Similar to GL 50A, GL 51A does not permit using digital currency or transactions involving certain countries or entities. It also does not allow exploration, development, or processing of Venezuelan minerals in restricted countries like Russia or China. Joint ventures within Venezuela for mining or extraction are not allowed under this license.
Reporting Requirements for GL 51A
Under GL 51A, detailed reports are also required. These reports must identify the parties, supply chain plans, and include documentation. Information on the quantities and values of minerals and taxes or fees paid to Venezuela are needed too. Reports must be filed within ten days of the first transaction and every 30 days during ongoing activities.
This detailed summary of the new general licenses from OFAC clarifies what is allowed and what is not when dealing with Venezuela’s oil, gas, and mineral sectors.
Legal Disclaimer
This article includes content collected from the Federal Register (federalregister.gov). The content is not an official government publication. This article is for informational purposes only and does not constitute legal advice. For case-specific consultation, please contact us. Read our full Legal Disclaimer, which also includes information on translation accuracy.
