On May 12, 2020, the US Treasury Department’s Office of Foreign Assets Control (“OFAC”) announced the lifting of US sanctions on Nynas AB (“Nynas”) and the related revocation of General License No. 13E (“Authorizing Certain Activities Involving Nynas AB”) (“GL 13E”). We blogged about last month’s extension of GL 13E here.
Nynas and its subsidiaries were previously subject to US sanctions because Nynas was indirectly owned and controlled by Petróleos de Venezuela SA (“PdVSA”) and, by extension, the Government of Venezuela (“GOV”). PdVSA has been considered blocked since its designation as a Specially Designated National (“SDN”) on January 28, 2019 under Executive Order 13850, and the GOV has been considered blocked since comprehensive sanctions were imposed on August 5, 2019 under Executive Order 13884. The blocking of PdVSA and the GOV also applied to entities owned 50% or more or controlled by such parties, directly or indirectly. These Venezuela-related Executive Orders were incorporated into the Venezuela Sanctions Regulations (31 C.F.R. Part 591, “VSR”) late last year, as explained in our previous blog post.
According to OFAC, Nynas has undertaken a corporate restructuring that has resulted in it no longer being blocked pursuant to the VSR. The corporate restructuring, among other things, led to blocked persons, (i.e., PdVSA. the GOV) no longer controlling Nynas and reducing the interest of blocked persons in Nynas to below 50%. As a result, GL 13E was revoked because US persons no longer need OFAC’s authorization to deal with Nynas. In addition, because Nynas is now not 50%-or-more owned or controlled by PdVSA or the GOV, Nynas is also no longer subject to the non-blocking sanctions under the VSR, including Executive Order 13808 and Executive Order 13835. Given Nynas’s restructuring, OFAC also re-issued as General License 3H (“Authorizing Transactions Related to, Provision of Financing for, and Other Dealings in Certain Bonds”) and General License 9G (“Authorizing Transactions Related to Dealings in Certain Securities”) to remove references of Nynas, which, as a consequence of its corporate restructuring, are no longer relevant. Conforming changes were made to FAQs 661 and 662.