US eases some Venezuela sanctions, permits select PDVSA dealings

The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) has issued General License No. 52, authorising certain transactions involving Petróleos de Venezuela, S.A. (PDVSA) and its affiliated entities in accordance with the Venezuela Sanctions Regulations.

The measure maintains the broader framework of US sanctions while creating a limited framework that permits specific transactions with Venezuela’s state-owned oil company.

Subject to strict conditions, the license allows transactions that were previously prohibited under Executive Orders 13884 and 13850 for established US companies.

The authorisation applies to PDVSA and any entity in which it holds, directly or indirectly, a 50% or greater ownership interest.

Financial and legal protections

A number of financial and legal safeguards must be met for the authorisation to apply.

Any dispute resolution must take place within the United States, and contracts with PDVSA must be governed by US law or the law of a US jurisdiction.

Payments to sanctioned individuals are strictly restricted and tightly controlled.

All financial transfers must be made into Foreign Government Deposit Funds or another account designated by the U.S. Treasury, excluding payments for local taxes, permits, or fees.

This requirement ensures that financial flows remain subject to US oversight.

The license defines “established U.S. entities” as those organised under US law on or before January 29, 2025, thereby limiting participation to pre-existing entities rather than new market entrants.

Important prohibitions are still in effect

OFAC maintains several restrictions despite the limited authorization.

Transactions prohibited under prior executive orders—such as those related to PDVSA bonds and Venezuelan sovereign debt, as well as any transactions involving the sale or pledge of state-owned equity interests—are expressly excluded from the license.

To preserve the integrity of existing sanctions, the license also prohibits settlement agreements or enforcement actions that would transfer or alter blocked property.

Except for PDVSA and its covered entities, transactions with individuals or entities on OFAC’s Specially Designated Nationals (SDN) list remain prohibited.

The license also prohibits non-commercial arrangements, debt swaps, and transactions involving gold or digital assets such as Venezuelan government-issued cryptocurrency.

Requirements for reporting oil exports

Organisations that export, reexport, or resell oil or petrochemical products of Venezuelan origin to destinations outside the United States are subject to comprehensive reporting requirements.

They must submit detailed reports to US authorities, including information on destination countries, product volumes, values, transaction details, and the parties involved.

Any taxes, fees, or payments made to the Venezuelan government must also be disclosed in these reports.

Initial reporting must be completed within ten days of the first transaction, with updates submitted every ninety days while operations continue.