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Financial Services Law Insights and Observations

Treasury sanctions Russian company for doing business with Venezuela

Financial Crimes Venezuela Petroleos de Venezuela Department of Treasury OFAC Combating the Financing of Terrorism Of Interest to Non-US Persons Sanctions

Financial Crimes

On February 18, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order (E.O.) 13850, as amended, against a Swiss-incorporated, Russian-controlled oil brokerage and its board chairman and president for operating in the oil sector of the Venezuelan economy. According to the press release, the company assisted Venezuela state-owned Petroleos de Venezuela, S.A., in brokering, selling, and transporting Venezuelan petroleum products.

In connection with the designations, OFAC issued Venezuela General License (GL) 36, titled “Authorizing Certain Activities Necessary to the Wind Down of Transactions Involving [company].” GL 36, which expires on May 20, authorizes certain transactions and activities otherwise prohibited under E.O.s 13850 and 13857 that are required in order to wind down business with the company. Concurrently, OFAC issued a new Venezuela-related frequently asked question regarding GL 36, addressing the significance of OFAC’s designation of the company, and whether the E.O. 13850 blocking sanctions on the company apply to its corporate parent and affiliates. In its press release, OFAC added that “all property and interests in property of [the company] and [its president] that are in the United States or in the possession or control of U.S. persons, and of any entities that are owned, directly or indirectly, 50 percent or more by the designated individual and entity, are blocked and must be reported to OFAC.”

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