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  • DOJ unveils charges against Maduro, Venezuelan government officials

    Financial Crimes

    On March 26, the DOJ announced criminal charges against numerous current and former Venezuelan government officials, including “Former President” Nicolás Maduro Moros and two Fuerzas Armadas Revolucionarias de Colombia (FARC) leaders. The charges include allegedly engaging in drug trafficking, laundering drug proceeds using Florida real estate and luxury goods, corruption, and bribery. According to an unsealed four-count superseding indictment filed in the Southern District of New York, Maduro, along with five other high-ranking officials, participated in a “narco-terrorism conspiracy,” conspired to import large-scale cocaine shipments into the U.S., and used—or conspired to use—“machine guns and destructive devices” to further the narco-terrorism conspiracies. The charges also allege that Maduro and the officials negotiated and facilitated FARC-produced cocaine shipments, coordinated “foreign affairs with Honduras and other countries to facilitate large-scale drug trafficking,” and solicited assistance from FARC leadership with respect to militia training.

    A separate indictment unsealed in the District of Columbia charges the current Venezuelan Minister of Defense with conspiracy to distribute cocaine on a U.S.-registered aircraft. That individual was previously sanctioned in 2018 by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC). (Covered by InfoBytes here.)

    A criminal complaint was also filed in the Southern District of Florida charging the current Chief Justice of the Venezuelan Supreme Court with accepting “tens of millions of dollars and bribes to illegally fix dozens of civil and criminal cases,” including a case in which the defendant authorized the dismissal of charges brought against a Venezuelan who was “charged in a multibillion-dollar fraud scheme against the Venezuelan state-owned oil company.” According to the complaint, the defendant laundered the proceeds through U.S. bank accounts, and spent approximately $3 million in South Florida on a private aircraft and luxury goods.

    Another unsealed indictment in the Southern District of New York charges three additional Venezuelans with evading OFAC sanctions by working “with U.S. persons and U.S.-based entities to provide private flight services for the benefit of Maduro’s 2018 presidential campaign.”

    Additional separate indictments accuse various former Venezuelan officials of drug trafficking and military aircraft smuggling. In addition, several individuals were charged with FCPA violations, including: (i) two individuals for allegedly receiving bribes to award business to U.S.-based companies; and (ii) several individuals for allegedly participating in an international money laundering scheme and conspiring to solicit Petróleos de Venezuela, S.A. (PDVSA) vendors “for bribes and kickbacks in exchange for providing assistance to those vendors in connection with their PDVSA business.” According to the DOJ’s press release, the scheme involved “bribes paid by the owners of U.S.-based companies to Venezuelan government officials to corruptly secure energy contracts and payment priority on outstanding invoices.”

    Financial Crimes DOJ Indictment Of Interest to Non-US Persons Venezuela Petroleos de Venezuela Anti-Money Laundering Bribery FCPA OFAC Sanctions Courts

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  • OFAC sanctions additional Russian oil brokerage firm for doing business with Venezuela

    Financial Crimes

    On March 12, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions pursuant to Executive Order (E.O.) 13850 against a Russian oil brokerage firm for operating in the oil sector of the Venezuelan economy. According to OFAC, following the February 18 designation of a Swiss-incorporated, Russian-controlled oil brokerage and its board chairman and president (covered by InfoBytes here), cargoes of Venezuelan oil allocated to the designated company were charged to the newly sanctioned brokerage firm in order to evade U.S. sanctions. In connection with the designation, OFAC issued Venezuela General License 36A, which 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 amended FAQ 817 and FAQ 818 to address the significance of OFAC’s designation of the company, and whether there is a wind-down period. OFAC reiterated that “all property and interests in property of [the brokerage firm] 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.”

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

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  • Treasury sanctions Russian company for doing business with Venezuela

    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.”

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

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  • Venezuela’s state-owned airline subject to OFAC sanctions

    Financial Crimes

    On February 7, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced that it identified a previously blocked state-owned Venezuelan airline and its fleet of aircraft pursuant to Executive Order (E.O.) 13884. The entities—subject to sanctions under E.O. 13884, which blocks property of the Venezuelan government—have been added to OFAC’s Specially Designated Nationals (SDN) List. According to OFAC’s press release, the commercial airline and its fleet have been used by Venezuela’s illegitimate government “to promote its own political agenda, including shuttling regime officials to countries such as North Korea, Cuba, and Iran.” OFAC observed that Venezuelan citizens may still travel by air on a number of other airlines that provide domestic service as well as service to and from Venezuela. OFAC also reiterated that its “regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked persons.”

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

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  • Iranian company employee charged in $115 million international bank fraud scheme

    Financial Crimes

    On January 31, the U.S. Attorney’s Office for the Southern District of New York announced charges against an employee (defendant) of an Iranian company for bank fraud, conspiracy to commit bank fraud, and for making false statements to federal agents regarding financial transactions made through U.S. banks to benefit Iranian entities and individuals. According to the indictment, an agreement between the Iranian government and the Venezuelan government resulted in a construction contract for housing units in Venezuela where an Iranian company would construct the units and be paid with money funneled through U.S. banks by a Venezuelan state-owned company subsidiary. The defendant was purportedly part of a committee formed to guide the project. In coordination with other individuals, the defendant allegedly directed money from the Venezuelan company to the Iranian company through bank accounts—set up to hide the transactions from U.S. banks—in Switzerland. The indictment charges that, among other things, the defendant “knowingly and willfully” conspired with others to commit bank fraud against an FDIC-insured institution by directing the Venezuelan company to route $115 million in payments for the Iranian company to the Swiss bank account through correspondent U.S. banks in New York. Additionally, when the defendant was interviewed by federal agents, he “knowingly and willfully” concealed the scheme and made materially false statements about his knowledge of the applicability of sanctions against Iran. The indictment seeks forfeiture of any proceeds or property obtained by the defendant in the course of the alleged offenses.

    Financial Crimes DOJ Iran Venezuela Combating the Financing of Terrorism Of Interest to Non-US Persons OFAC Sanctions Fraud FDIC

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  • OFAC identifies Venezuelan aircraft as blocked property, issues amended Venezuela-related general licenses

    Financial Crimes

    On January 21, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced amendments to the list of property implicated by the Specially Designated Nationals List (SDN List) pursuant to Executive Order (E.O.) 13884, which blocks the property of the Venezuelan government. OFAC identified 15 aircraft that either transported senior members of the Maduro regime or “operated in an unsafe and unprofessional manner in proximity to U.S. military aircraft, while in international air space.” OFAC reiterated that its “regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked persons.”

    In connection with the designations, OFAC issued amended Venezuela General License (GL) 20B, titled “Authorizing Official Activities of Certain International Organizations Involving the Government of Venezuela.” GL 20B authorizes certain transactions and activities otherwise prohibited under E.O.s 13850 and 13857 involving Banco Central de Venezuela, and E.O. 13884 involving the Government of Venezuela.

    Earlier, on January 17, OFAC issued two additional amended Venezuela GLs. GL 5B provides that on or after April 22, all transactions related to the financing for, and other dealings in the Petróleos de Venezuela SA 2020 8.5 Percent Bond that would be prohibited under a certain subsection of E.O. 13835, as amended by E.O. 13857, are authorized. GL 8E, titled “Authorizing Transactions Involving Petróleos de Venezuela, S.A. (PdVSA) Necessary for Maintenance of Operations for Certain Entities in Venezuela,” supersedes GL 8D to extend the expiration date for certain authorizations through April 22.

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

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  • OFAC publishes new Venezuela-related FAQs

    Financial Crimes

    On December 9, the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) published two new Venezuela-related FAQs. FAQ 808 stipulates that a specific license from OFAC is not “ordinarily required” when initiating or continuing U.S. legal proceedings against persons designated or blocked pursuant to OFAC’s Venezuela sanctions programs. Specific licenses are also not required for a U.S. court or court personnel to hear such a case. However, a specific license from OFAC is required in order to enter into a settlement agreement or to enforce a lien, judgment, or other order “through execution, garnishment, or other judicial process purporting to transfer or otherwise alter or affect property or interests in property blocked pursuant to the Venezuela Sanctions Regulations.” OFAC also provides a list of measures where a specific license is required. Additionally, FAQ 809 clarifies when a specific license is required to conduct an auction or other type of sale involving shares of a Venezuelan government entity whose property and interests in property are blocked pursuant to the Venezuela Sanctions Regulations. Additionally, OFAC “urges caution in proceeding with any step in furtherance of measures which might alter or affect blocked property or interests in blocked property.” 

    Visit here for additional InfoBytes coverage of actions related to Venezuela.

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

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  • OFAC identifies Venezuelan oil tankers as blocked property

    Financial Crimes

    On December 3, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced additions to the Specially Designated Nationals List (SDN List) pursuant to Executive Order 13884, which blocks the property of the Venezuelan government. OFAC identified six tankers of Venezuela’s state-owned oil company as property of the Venezuelan Government and therefore as blocked property, after all the vessels recently transported petroleum to Cuba. A seventh tanker also was identified as a blocked property, pursuant to Executive Order 13850 for operating in the oil sector of the Venezuelan economy, after delivering Venezuelan petroleum to Cuba. According to the press release, the vessel’s name had been changed to circumvent sanctions as it moved Venezuelan oil to Cuba. The SDN List was updated to link the new name of the vessel to its former name. OFAC reiterated that its “regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of blocked or designated persons.”

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

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  • OFAC amends the Venezuela Sanctions Regulations

    Financial Crimes

    On November 21, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced that the Venezuela Sanctions Regulations (Regulations) have been amended to incorporate additional Executive Orders (E.O.s), a new general license, and a new interpretive provision. Specifically, since the Regulations were published in July 2015, six E.O.s have been issued pursuant to E.O. 13692, “Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Venezuela.” OFAC is amending the Regulations to specify that the prohibitions include all transactions prohibited by E.O. 13692 or any further E.O issued pursuant to the national emergency declared in E.O. 13692. Moreover, OFAC is amending the Regulations to incorporate a general license, which authorizes the U.S. Government to engage in certain activities related to Venezuela (see previous InfoBytes coverage on actions related to Venezuela, including general licenses here). Lastly, an interpretive provision has been added to clarify that “the entry into a settlement agreement or the enforcement of any lien, judgment, arbitral award, decree, or other order through execution, garnishment, or other judicial process purporting to transfer or otherwise alter or affect property or interests in property blocked pursuant to [the Regulations] is prohibited unless authorized pursuant to a specific license issued by OFAC pursuant to this part.” The amendments were effective November 22.

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

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  • OFAC sanctions additional Venezuelan government officials, amends and adds general licenses

    Financial Crimes

    On November 5, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced sanctions against five current Venezuelan government officials. The sanctions—issued pursuant to Executive Order (E.O.) 13884, which prevents all property and property interests of the Government of Venezuela existing within the U.S. or in the possession of a U.S. person from being transferred, paid, exported, withdrawn, or otherwise dealt in (previous InfoBytes coverage here)—reflects Treasury’s continued efforts against persons who offer support to the Maduro regime.

    In conjunction with the sanctions, OFAC also issued amended Venezuelan General License (GL) 34A, which supersedes and replaces GL 34, and authorizes transactions with certain Venezuelan government individuals blocked by E.O. 13884. OFAC also issued GL 35, titled “Authorizing Certain Administrative Transactions with the Government of Venezuela,” which permits certain transactions “necessary and ordinarily incident” to day-to-day operations. New and amended FAQs provide additional guidance.

    Visit here for additional InfoBytes coverage of actions related to Venezuela.

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

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