On 8 March 2015, US President Barack Obama issued a new Executive Order (“Order”) authorizing the imposition of sanctions targeting Venezuela in response to the Venezuelan Government’s erosion of human rights guarantees; persecution of political opponents; curtailment of press freedoms; use of violence and human rights violations and abuses in response to antigovernment protests; arbitrary arrest and detention of antigovernment protestors; and the exacerbating presence of significant public corruption in the country. According to Treasury Secretary Jack Lew, the Order “will be used to protect the US financial system from the illicit financial flows from public corruption in Venezuela” (statement of Secretary Lew on the Order). The Order was issued pursuant to various legal authorities, including the Venezuela Defense of Human Rights and Civil Society Act of 2014 (described in our posts of 16 December and 19 December 2014). The White House has published a Fact Sheet about the Order.
The Order (1) designates seven individuals as Specially Designated Nationals (“SDNs”), (2) provides authorization for the designation of additional parties as SDNs who are engaged in targeted activities, and (3) suspends entry into the United States of persons designated under the Order. The Order does not “block” or freeze the assets of the Venezuelan Government generally or impose other broad sanctions targeting Venezuela.
1. Order
The Order authorizes the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) to designate as SDNs any of the following parties:
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Parties determined to be responsible for or complicit in, or responsible for ordering, controlling, or otherwise directing, or to have participated in, directly or indirectly, any of the following in or in relation to Venezuela (collectively, the “Targeted Activities”):
o actions or policies that undermine democratic processes or institutions;
o significant acts of violence or conduct that constitutes a serious abuse or violation of human rights, including against persons involved in antigovernment protests in Venezuela in or since February 2014;
o actions that prohibit, limit, or penalize the exercise of freedom of expression or peaceful assembly; or
o public corruption by senior officials within the Venezuelan Government;
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Parties determined to be a current or former leader of an entity:
o that has, or whose members have, engaged in a Targeted Activity; or
o whose property and interests in property are blocked pursuant to the Order;
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Current or former officials of the Venezuela Government;
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Parties determined to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of:
o a person whose property and interests in property are blocked pursuant to this Order or
o a Targeted Activity; and
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Parties determined to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to the Order.
Parties designated under the Order will be tagged with the [VENEZUELA] tag on OFAC’s List of Specially Designated Nationals and Blocked Persons (“SDN List”). US Persons are prohibited from dealing, directly or indirectly, with parties designated as SDNs or with any entities in which one or more SDNs own a 50% or greater interest, even if not themselves listed. For purposes of the Order, “US Persons” include (i) entities organized under US laws and their non-US branches, (ii) individuals or entities in the United States, and (iii) US citizens or permanent resident aliens (“Green Card” holders) wherever located or employed. While non-US persons, including separately incorporated foreign subsidiaries of US companies, are generally not subject to the Order, non-US persons may trigger US sanctions prohibitions if they cause any SDN-related transactions to occur in whole or in part in the United States or elsewhere by US Persons.
2. Immigration Ban
The Order also generally suspends entry into the United States, as immigrants or nonimmigrants, of non-US persons blocked pursuant to the Order, except where the Secretary of State determines that the person’s entry is in the national interest of the United States or when necessary for the United States to comply with its international obligations, including the Agreement Regarding the Headquarters of the United Nations.
3. New SDN Designations
As noted above, the Order designates seven (7) individuals as SDNs, which OFAC has added to the SDN List. These seven (7) individuals are the Director of the National Police; the Inspector General of the National Armed Forces; the Director General of the National Intelligence Service and President of the Strategic Center of Security and Protection of the Homeland; the Commander of the Central Integral Strategic Defense Region of the National Armed Forces; the National Level Prosecutor of the 20th District Office of the Public Ministry; the Chief of the 31st Armored Brigade of Caracas; and the President of the Venezuelan Corporation of Guayana (CVG).
