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Financial Services Law Insights and Observations

OFAC sanctions Chinese tech company for supporting Maduro regime

Financial Crimes OFAC Department of Treasury Sanctions Venezuela Of Interest to Non-US Persons OFAC Designations

Financial Crimes

On November 30, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against a Chinese technology company for allegedly “having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, actions or policies that undermine democratic processes or institutions.” The sanctions, issued pursuant to Executive Order (E.O.) 13692, reflect Treasury’s continued efforts to hold persons who offer support to the Maduro regime accountable. As a result, all property and interests in property belonging to the identified individuals subject to U.S. jurisdiction are blocked, and “any entities that are owned, directly or indirectly, 50 percent or more by the designated individuals, are also blocked.” U.S. persons are generally prohibited from dealing with any property or interests in property of blocked or designated persons.

Concurrently, OFAC issued Venezuela-related General License (GL) 38 and a related frequently asked question. GL 38 authorizes the wind down of transactions and activities involving the sanctioned company or any entity owned—directly or indirectly at a 50 percent or greater interest—through January 14, 2021, which would otherwise be prohibited by E.O. 13692. According to OFAC, GL 38 does not authorize (i) any debit to the sanctioned entity’s accounts on a U.S. financial institution’s books; or (ii) any transactions otherwise prohibited by the Venezuela Sanctions Regulations.

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