The U.S. Department of the Treasury, Office of Foreign Assets Control (“OFAC”) is reportedly taking steps toward a limited easing of certain sanctions targeting Venezuela. If the public reporting is accurate, these limited concessions are being made by the Biden administration in connection with the resumption of negotiations between the Maduro regime and Venezuelan opposition leaders regarding the political situation and future elections in Venezuela. As of the date of this blog post, no official U.S. government announcements regarding such measures have been made.
Specifically, according to public reporting, which is based on unattributed statements by U.S. government officials, OFAC issued a license authorizing Chevron to engage in negotiations regarding its relationship with Petróleos de Venezuela, S.A., or PDVSA, the Venezuela state-owned oil and gas company that has been subject to blocking sanctions since 2019. Public reports suggest that the license does not allow the resumption of drilling or other operations in Venezuela at this time.
Under an existing general license, Chevron (along with certain other oil companies) is permitted to engage in limited maintenance operations in Venezuela, but full scale operations involving or relating to PDVSA remain prohibited. This general license was set to expire on June 1, 2022, but OFAC extended it on May 27, 2022 without any substantive changes. The license is now set to expire on December 1, 2022.
In addition to the reported OFAC license, at least one PDVSA executive who has familial ties to President Maduro reportedly will be removed from the Specially Designated Nationals and Blocked Persons List maintained by OFAC.
We will update this blog post if there are further developments, including official U.S. government announcements. Although the reported measures are quite limited, any such measures may suggest that the Biden administration is willing to consider further easing of sanctions on Venezuela if the political situation in Venezuela improves.
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*Special thanks to Margaret Carroll, a Law Clerk working in our Washington D.C. office, for her assistance on this blog post.