On July 10, 2015, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) published, in abbreviated form, Venezuela Sanctions Regulations (VSR) in 31 C.F.R. Part 591. The VSR implement the Venezuela Defense of Human Rights and Civil Society Act (“the Act”) and Executive Order 13692 (see prior post from March 11, 2015). Consistent with the existing restrictions, the VSR prohibit transactions with the individuals and entities designated under Executive Order 13692. Currently, this list identifies seven individuals but could be expanded by the President pursuant to the Act. These regulations also reiterate OFAC’s position that an entity in which a designated party owns a 50 percent or greater interest is blocked even if OFAC has not specifically designated that entity. This rule consequently expands the scope of these designations and requires parties doing business in Venezuela to conduct additional diligence of counterparties to ensure compliance.
The VSR also identify limited general licenses authorizing otherwise restricted activities. For instance, licenses exist for the provision of certain legal services to blocked parties and for the withdrawal of normal service charges by U.S. financial institutions from blocked accounts.
As noted above, OFAC considers these regulations to be preliminary and intends to supplement the VSR with a more comprehensive set of regulations. The next iteration of the VSR will apparently include “additional interpretative and definitional guidance and additional general licenses and statements of licensing policy.”
