[co-author: Daniela Melendez]*

Easy come, easy go. On January 29, 2024, OFAC published General License 43A under the Venezuela Sanctions Regulations, which partially rolled back a piece of the sanctions relief it provided to the country only a few months prior. General License 43A replaces General License 43, which effectively removes the authorization allowing transactions with CVG Compania General de Mineria de Venezuela CA (“CVG Minerven”), Venezuela’s gold mining company. The new license replaces that authorization with a wind down period requiring companies to wind down any transactions currently in process before a February 13, 2024 deadline. As such, OFAC sanctions will once again prohibit U.S. Persons from transactions with CVG Minerven

On October 18, 2023, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) took several steps to provide Venezuela with some limited relief from its economic sanctions. The relief included General Licenses that authorized transactions and business with Venezuela. Most notably, OFAC issued General License 44, which provided relief to Venezuela’s oil and gas sector. In November 2023, the Maduro government announced that candidates barred from running for office could appeal to the Supreme Court and thus, Maria Corina Machado (Venezuela’s opposition leader) appealed. Later, in December 2023, the Maduro government released 20 political prisoners, including 10 imprisoned Americans. In return, the United States released Alex Saab, a U.S. sanctioned ally of Maduro indicted on U.S. money laundering charges.

However, this sanctions relief was always conditioned on President Nicolas Maduro and his regime providing an electoral roadmap for a democratic process for the Venezuelan citizens (the Barbados Agreement). Despite Venezuela’s representations of ensuring a free and fair election, Venezuela’s Supreme Court recently barred Machado from running as a presidential candidate.

Following this development, OFAC issued the aforementioned General License 43A. While the remaining relief remains intact—specifically, General License 44 is still active which broadly authorizes transactions with Venezuela’s oil and gas industry—OFAC has indicated more roll backs will follow if necessary. The Biden Administration announced that if Venezuela does not uphold their commitment in the Barbados Agreement, the U.S. will not renew General License 44, which will expire on April 18, 2024. Matthew Miller, spokesperson for the Department of State, noted that the U.S. government continues to support and encourage the Venezuelan government to provide an electoral roadmap. According to the U.S. government, Venezuela will only overcome its longstanding political, economic, and humanitarian crisis if competitive and inclusive elections are held in Venezuela.

These events highlight the risks of operating in Venezuela, even pursuant to a license. While the sanctions relief creates potential commercial opportunities, the country still remains fraught with legal risks, as we previously warned. We will continue to update as things progress.

*Associate, Volkov Law Group