U.S. Sanctions New Debt and Equity Issuances by Venezuelan Government

On August 25, 2017, President Trump issued an Executive Order severely restricting transactions in debt and equity of the Government of Venezuela and of state-owned entities, including Petroleos de Venezuela, S.A. (PdVSA).

Simultaneously with the Executive Order, OFAC issued a number of general licenses and Frequently Asked Questions relating to the new sanctions. These new actions build on sanctions targeting Venezuelan officials, discussed here, and continue the trend toward targeted “bespoke” sanctions short of full blocking of all transactions with a targeted regime or country.

The new sanctions:

• Prohibit dealings in existing debt of the Government of Venezuela (and its controlled entities) by U.S. persons or within U.S. jurisdiction, subject to an extensive list of exceptions for specified issuances;
• Prohibit all dealings by U.S. persons or within U.S. jurisdiction in new debt of the Government of Venezuela with a duration of longer than 30 days and of PdVSA with a duration of longer than 90 days, or new equity of any state-controlled entity;
• Bar the purchase of securities from the Government of Venezuela within U.S. jurisdiction, other than permitted new debt; and
• Bar all distributions of profits and earnings within U.S. jurisdiction to the Government of Venezuela by state-owned entities.