On March 5, 2026, the US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) issued an updated FAQ 1238, providing guidance on whether OFAC would approve license applications authorizing the resale of Venezuelan‑origin oil for use in Cuba when consistent with the terms and conditions of Venezuela General License (“GL”) 46A (authorizing US entities to export, sell, deliver, etc. Venezuelan-origin oil). The FAQ is relevant for companies assessing potential transactions involving Venezuelan oil exports and downstream resale arrangements, particularly where such transactions may implicate both Venezuela‑ and Cuba‑related US sanctions and export controls. We have previously written about GL 46A and OFAC’s ongoing relaxation of sanctions targeting Venezuela’s oil and gas sector here.
Summary of FAQ 1238
In FAQ 1238, OFAC states that it would apply a favorable licensing policy toward specific license applications seeking authorization for the resale of Venezuelan‑origin oil to Cuba, subject to defined conditions. Specifically:
- The proposed transactions must be consistent with the terms and conditions of GL 46A (including its reporting requirements).
- For purposes of this favorable licensing policy, applicants do not need to have an “established US entity,” and the Cuba‑related limitations referenced in GL 46A would not apply.
- The favorable licensing policy is directed toward transactions that support the Cuban people, including the Cuban private sector, such as exports for commercial or humanitarian use in Cuba.
- OFAC further clarifies that transactions involving, or for the benefit of, Cuban military or intelligence services or other Cuban government institutions—including entities listed on the US Department of State’s Cuba Restricted List or any Cuban-owned financial institutions (collectively, “Excluded Parties”)—would not be eligible under this licensing policy.
- Per the March 5 update to the FAQ, applicants seeking licenses under this favorable policy must implement specific compliance measures to ensure that no subsequent transactions involving the Venezuelan‑origin oil directly or indirectly benefit Excluded Parties. These measures should include contractual provisions in sale or resale agreements prohibiting any present or future participation by Excluded Parties, as well as requirements that any present or future financial transaction involving the sale or resale of the Venezuelan-origin oil are routed through a US-based financial institution or otherwise do not involve routing through financial institutions associated with or controlled by Excluded Parties.
Export Controls and Cuba-Related Considerations
FAQ 1238 reiterates that the US Department of Commerce primarily regulates the export or reexport of US origin oil to Cuba, as well as all other items subject to the Export Administration Regulations.
In particular, OFAC notes that:
- Treasury’s Cuban Assets Control Regulations generally authorize US persons to engage in transactions ordinarily incident to the export or reexport of US origin oil to Cuba where such exports or reexports have been authorized by the Department of Commerce.
- This includes transactions conducted pursuant to License Exception Support for the Cuban People (SCP), which authorizes certain exports and reexports of gas and petroleum products intended to improve living conditions and support independent economic activity in Cuba.
- Exporters and reexporters remain responsible for reviewing current Commerce Department guidance and ensuring compliance with all applicable license conditions.
As US policy regarding Venezuela continues to develop, OFAC may issue new or expanded general licenses and related FAQs that go beyond those issued since the seizure of Nicolas Maduro on January 3, 2026. We are closely monitoring these developments and will continue to update this blog as and when new actions are taken.
If you would like to explore more of our insights and resources for business operating in Venezuela, please see The Venezuela Brief, which incorporates perspectives from our lawyers in our offices in both the United States and Venezuela.
