On April 17, 2024, the US Department of the Treasury’s Office of Foreign Assets Controls (“OFAC”) issued General License 44A (“GL 44A”), authorizing the wind down by 12:01 am EDT on May 31, 2024 of transactions that were previously authorized under GL 44. OFAC also amended a consolidated frequently asked questions (“FAQs”) guidance document (“Updated Guidance”) to reflect the reissued General License 44A. Our previous blog post on the original issuance of GL 44 can be found here.
The US Department of State said in this press statement that GL 44 was not renewed after the US government determined that the Government of Venezuela did not fully meet its commitments made under the electoral roadmap agreement last year. This action follows OFAC’s announcement at the end of January 2024 to end the authorization to deal with a sanctioned party in Venezuelan mining sector. Our previous blog post about that development can be found here.
GL 44A authorizes all transactions that are ordinarily incident and necessary to the wind down of any transactions related to oil or gas sector operations in Venezuela that were previously authorized by GL 44. GL 44A authorizes the wind down of, among others, the following non-exhaustive list of transactions that were authorized by GL 44:
- the production, lifting, sale, and exportation of oil or gas from Venezuela, and provision of related goods and services;
- the payment of invoices for goods and services related to oil or gas sector operations in Venezuela;
- new investment in oil or gas sector operations in Venezuela; and
- delivery of oil and gas from Venezuela to creditors of the Government of Venezuela, as well as Petróleos de Venezuela, S.A. (“PdVSA”) or any entity owned 50% or more by PdVSA, for purposes of debt repayment.
The Updated Guidance states that entering into new business, including new investment, that was previously authorized under GL 44 will not be considered wind-down activity. This guidance also assures non-US parties that engaging in similar wind-down activities related to the Venezuelan oil and gas sectors prior to May 31, 2024 will not be exposed to US secondary sanctions.
The author acknowledges the assistance of Ryan Orange with the preparation of this blog post.
