On September 30, 2019, the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) amended two Venezuela-related general licenses (“GLs”), re-issued as General License 3G (“GL 3G”) and General License 9F (“GL 9F”), to extend the authorization for dealings in certain bonds and other securities, as further outlined below. Our blog post regarding previous amendments to these GLs is available here.
- GL 3G was amended to extend the validity period of the authorization for transactions and activities that are ordinarily incident and necessary to the wind down of financial contracts or other agreements that were entered into prior to 4:00 p.m. EST on February 1, 2019 and involving bonds listed in the annex to GL 3G. This wind-down authorization was extended through March 30, 2020 (previously, it was valid through September 30, 2019).
- Otherwise, the authorizations contained in GL 3G remain the same. US Persons can continue to (i) engage in transactions related to, provide financing for, and otherwise deal in bonds that are specified in the annex to GL 3G provided that any divestments or transfer of, or facilitation of divestment or transfer of, any holdings in those bonds are to a non-US person; (ii) deal in bonds issued prior to the effective date of Executive Order 13808 by US Person entities owned or controlled, directly or indirectly, by the Government of Venezuela (e.g., CITGO Holding, Inc.); and (iii) engage in all transactions ordinarily incident and necessary to facilitating, clearing, and settling trades of holdings in bonds specified in the annex to GL 3G, provided that such trades were placed prior to 4:00 p.m. EST on February 1, 2019.
- GL 9F was also amended to extend the validity period of the authorization for transactions and activities that are ordinarily incident and necessary to the wind down of financial contracts or other agreements that were entered prior to January 28, 2019 at 4:00 p.m. EST involving or linked to securities issued by Petróleos de Venezuela, S.A. (“PdVSA”) or any entity owned 50% or more by PdVSA (but not those entities less than 50% owned but still controlled by PdVSA) issued prior to August 25, 2017. This wind-down authorization was extended through March 30, 2020 (previously, it was valid through September 30, 2019).
- Otherwise, the authorizations included in GL 9F remain the same, i.e., US Persons can also continue to engage in (i) transactions that are ordinarily incident and necessary to dealings in PdVSA securities issued prior to August 25, 2017 provided that any divestment or transfer of, or facilitation of divestment or transfer of, any holdings in such securities must be to a non-US person; (ii) transactions that are ordinarily incident and necessary to dealing in bonds including those listed in the annex to GL 9F.; and (iii) facilitation, clearing, and settlement of transactions to divest PDVSA securities to non-US persons.
