On March 22, 2019, the Trump Administration initiated another round of sanctions against Venezuelan entities, sanctioning the Banco de Desarrollo Economico y Social de Venezuela (“Banco de Bandes”) as well as four other financial institutions owned or controlled by Banco de Bandes. This marks the first time that the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) has used its authority to sanction entities operating in the financial sector of the Venezuelan economy, an indication that the Trump Administration is intent on escalating its pressure on President Maduro and his government.

In its announcement of the sanctions, the Treasury Department has alleged that Banco de Bandes is being used to prop up President Maduro’s government. Treasury also specifically mentions the arrest of opposition leader Juan Guaido’s chief of staff, Roberto Marrero as a basis for the sanctions. In announcing the sanctions, Treasury Secretary Steven Mnuchin stated that the Maduro “regime’s continued use of kidnapping, torture, and murder of Venezuelan citizens will not be tolerated by the U.S. or the international coalition that is united behind President Guaido.” He added that “Roberto Marrero and other political prisoners must be released immediately.”

As previously reported, the Trump Administration has been putting significant economic pressure against the Maduro government over the last several months. Until this month, OFAC has focused on sanctioning Venezuelan companies in the oil and gas sector of Venezuela’s economy, with Petróleos de Venezuela (“PdVSA”), the state-run oil and gas company, being the focus of the sanctions. On March 19, 2019, however, OFAC sanctioned CVG Compania General de Mineria de Venezuela CA (“Minerven”), the Venezuelan state-run ferrous metals mining company, which was the first sign that the Administration would impose sanctions on companies outside Venezuela’s oil and gas sector.

In addition to Banco de Bandes, OFAC placed Banco Bandes Uruguay S.A.; Banco Bicentenario del Pueblo, de la Clase Obrera, Mujer y Comunias, Banco Universal C.A. (“Banco Bicentenario del Pueblo”); Banco de Venezuela SA Banco Universal (“Banco de Venezuela”); and Banco Prodem S.A. on the list of specially designated nationals and blocked persons. Being placed on this list prohibits U.S. persons from engaging in almost any business activity with the designated entity, except as licensed by OFAC. It also requires that U.S. persons block or “freeze” the property of the designated entity.

On a related issue, OFAC published five new general licenses covering its sanctions against Venezuelan entities. Among other things, the licenses allow U.S. persons to maintain accounts in Banco de Venezuela and Banco Bicentenario del Pueblo through March 21, 2020. OFAC also authorized certain financial institutions, such as Visa and Mastercard, to continue to do business with Banco de Venezuela and Banco Bicentenario del Pueblo through March 21, 2020.