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U.S. Imposes Sweeping Economic Sanctions against Venezuela Government

James.Treanor@cwt.com's picture
Commentary by James Treanor

On August 5, 2019, the Trump administration imposed sweeping economic sanctions against the Venezuelan Government to further target President Nicolás Maduro's regime.

In the Executive Order, the administration froze all assets held by, and prohibited any transactions with, the Venezuelan Government. As reported in The Wall Street Journal, these "stringent U.S. measures" are the first such action against a government in the Western Hemisphere in over 30 years.

Pursuant to the Executive Order, OFAC (i) updated its FAQs, (ii) amended 12 general licenses, and (iii) issued 13 new general licenses. In addition, OFAC clarified that it is maintaining authorizations permitting U.S. persons to continue providing humanitarian aid and support to the people of Venezuela.

Commentary

The August 5 Executive Order represents a major escalation in U.S. sanctions against Venezuela. The move comes six months after the imposition of sanctions on Petróleos de Venezuela, S.A. (“PdVSA”), the country’s state-owned oil company, and follows scores of designations targeting individuals and companies associated with Venezuelan leader Nicolás Maduro and his regime. The Executive Order is designed to exert even greater pressure on the Maduro regime, and also authorizes additional sanctions against his backers, including those in Russia, China and elsewhere. While the Executive Order does not formally impose a comprehensive embargo on trade and other dealings with the entire country, the heavy involvement of the Government of Venezuela in the country’s economy should give financial institutions and companies serious pause before engaging in further transactions, absent a clear authorization to do so.

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