On January 8, 2019, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) added approximately 30 individuals and entities to its Specially Designated Nationals and Blocked Persons List (the “SDN List”) due to their engagement in corrupt currency exchange transactions which enriched themselves by at least $2.4 billion at the expense of Venezuela’s citizens.  These sanctioned persons include two former Venezuelan National Treasurers – Claudia Patricia Diaz Guillen (“Diaz”) and Alejandro Jose Andrade Cedeno (“Andrade”) – who authorized a Venezuelan businessman named Raul Antonio Gorrin Belisario (“Gorrin”) to convert Venezuelan bolivars into U.S. dollars at highly favorable exchange rates at currency exchange houses under his control.  Gorrin then shared the resulting excess currency conversion profits with Diaz and Andrade by engaging in deceptive practices to purchase a wide variety of properties, aircraft and other luxury assets on behalf of Diaz, Andrade, their family members and their other business associates.  The Treasury Department published a diagram which explains the scheme in further detail.

These SDN List designations generally prohibit U.S. persons from transacting with the sanctioned persons and also require U.S. financial institutions to freeze any assets belonging to the sanctioned persons which transit through the U.S. financial system.  These sanctions also apply to any business entities in which these SDN List designees hold an ownership interest of 50% or greater.  Other sanctioned entities include Globovision Tele C.A. and Globovision Tele CA, Corp., which are both owned and controlled by Gorrin and his brother-in-law, Gustavo Adolfo Perdomo Rosales.  However, OFAC also issued a new General License No. 6 (available here) which authorizes limited maintenance and wind down transactions with Globovision Tele C.A., Globovision Tele CA, Corp and their 50%-or-greater-owned subsidiaries for a 1-year winding down period.  OFAC has published a new FAQ which provides guidance on the scope of “maintenance” and “wind down” transactions permitted under General License No. 6.  Anyone seeking to utilize this General License No. 6 should be aware that they must report any transactions conducted under the License to OFAC within ten (10) business days following its expiration on January 8, 2020.

For a full list of the sanctioned individuals and entities covered under this announcement, click here.