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President Trump issues new Executive Order prohibiting the purchase of debt from the Venezuelan government
On May 21, President Trump issued an Executive Order (E.O.) prohibiting U.S. companies or individuals from buying debt or accounts receivable from the Venezuelan government “in light of the recent activities of the Maduro regime, including endemic economic mismanagement and public corruption at the expense of the Venezuelan people and their prosperity.” The sanctions specifically prohibit transactions related to the following: (i) “the purchase of debt owed to the Venezualan government, including accounts receivable;” (ii) debt pledged as collateral after May 21, including accounts receivable; and (iii) “the sale, transfer, assignment, or pledging as collateral by the Government of Venezuela of any equity interest in any entity in which the Government of Venezuela has a 50 percent or greater ownership interest.”
The E.O., issued in conjunction with E.O. 13692, follows two prior E.O.s, which also targeted the Maduro regime—E.O. 13827, which prohibits U.S. persons from engaging in transactions that involve digital currency issued by, for, or on behalf of the Venezuelan government, and E.O. 13808, which prohibits transactions related to new debt, bonds, and dividend payments in conjunction with the Venezuelan government and the state-owned oil company. (See previous InfoBytes coverage here and here.). The E.O. took effect on May 21 at 12:30 p.m. EDT.
See here for continuing InfoBytes coverage of actions related to Venezuela.
OFAC adds additional Venezuelan government officials to Specially Designated Nationals List
On May 18, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) made additions to the Specially Designated Nationals List pursuant to Executive Order 13692. OFAC’s additions to the list include four current or former Venezuelan government officials identified as persons who have “exploit[ed] their official positions to engage in narcotics trafficking, money laundering, embezzlement of state funds, and other corrupt activities.” OFAC additionally blocked three companies and 14 properties located in Florida and New York owned by one of the recently added officials. As a result, all assets belonging to the identified individuals and entities subject to U.S. jurisdiction are blocked and must be reported to OFAC, and U.S. persons are generally prohibited from dealing with them.
See here for continuing InfoBytes coverage of actions related to Venezuela.
OFAC adds Venezuelans to Specially Designated Nationals List
On May 7, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) made additions to the Specially Designated Nationals List under the Foreign Narcotics Kingpin Designation Act. OFAC’s additions to the list include a former Venezuelan financial intelligence service official, two of his aides, and 20 companies located in Venezuela and Panama, owned or controlled by the three individuals. The designations identify persons who have materially assisted in, or provided financial or technological support for or to, the former official’s international narcotics trafficking activities, which include the laundering of narcotics proceeds and other illicit funds. As a result, all assets belonging to the identified individuals and entities subject to U.S. jurisdiction are blocked and must be reported to OFAC, and U.S. persons are generally prohibited from dealing with them.
See here for continuing InfoBytes coverage of Venezuelan actions.
Former Venezuelan official pleads guilty in bribery scheme
The DOJ announced on April 19, that a former Venezuelan official had pleaded guilty to one count of conspiracy to commit money laundering. The charge arose from the former official’s role in a bribery scheme involving bribes paid by the owners of U.S. companies to Venezuelan government officials to secure energy contracts and payments on outstanding invoices. As the former general manager of a procurement subsidiary of a Venezuelan state-owned energy company, he had solicited and accepted bribes. The judge entered a personal money judgment of $7,033,504.71. As a government official receiving the bribes, he could not be charged himself with FCPA offenses (which are targeted at those paying the bribes). Related charges against four other individuals remain pending, including charges of conspiracy to violate the FCPA; 11 individuals have already pleaded guilty in previous cases.
For prior coverage of the company's enforcement actions, please see here.
President Trump issues Executive Order prohibiting Venezuelan cryptocurrency transactions; OFAC sanctions additional Venezuelan officials
On March 19, President Trump issued Executive Order 13827 (E.O.) prohibiting transactions within the U.S. that involve any digital currency issued by, for, or on behalf of the Venezuelan government since January 9, and authorizing the U.S. Treasury Department to “employ all powers” necessary to carry out the E.O.’s provisions. President Trump issued the E.O. in conjunction with E.O. 13692 and E.O. 13808 and because of recent steps taken by Venezuelan President Maduro to “circumvent U.S. sanctions” by issuing a digital currency that the Venezuelan legislature “denounced as unlawful.” The E.O. took effect on March 19 at 12:15 p.m. EDT.
On the same day, the Treasury’s Office of Foreign Assets Control (OFAC) announced additional sanctions pursuant to E.O. 13692 against four current or former Venezuelan government officials as part of “ongoing efforts to highlight the economic mismanagement and endemic corruption that have been the defining features of the Maduro regime.” Pursuant to OFAC’s sanctions, all assets belonging to the designated persons within U.S. jurisdiction are blocked, and U.S. persons are “generally prohibited” from participating in transactions with these individuals. OFAC also published answers to several related FAQs concerning President Trump’s E.O., as well as new FAQs related to virtual currency.
Visit here for additional InfoBytes coverage on Venezuelan sanctions.
Houston-based energy company sues former Venezuelan government officials for bribery related conduct related to national oil company
On February 16, 2018, a Houston-based energy corporation that formally dissolved in May 2017 filed suit in the Southern District of Texas against two former presidents of a Venezuelan national oil company and others who allegedly worked for them. According to the complaint filed by the energy company, Venezuela’s Ministerio del Poder Popular de Petroleo y Mineria twice refused to allow the company to sell energy assets co-owned with the oil company because the energy company refused to pay bribes requested by the defendants. According to the energy company, the denials forced the company to sell the same assets at a loss of $470 million. The energy company has sued the defendants alleging civil violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), the Sherman Act, the Robinson-Patman Act, and the Texas Free Enterprise and Antitrust Act.
This suit was filed days after the DOJ unsealed charges against five former Venezuelan government officials for their involvement in a money laundering scheme at the oil company. Previous FCPA Scorecard coverage of the ongoing DOJ and ICE-HIS investigation into bribery at the national oil company can be found here.
DOJ unseals charges against former Venezuelan government officials for money laundering and FCPA violations in state-owned energy company scheme
On February 12, the DOJ unsealed charges against five former Venezuelan government officials for their involvement in a money laundering scheme at Venezuela’s state-owned energy company. The five defendants are each charged with conspiracy to commit money laundering. Two defendants are also charged with conspiracy to violate the FCPA.
Four of the defendants were arrested in Spain in October 2017 on arrest warrants based on an indictment filed in the Southern District of Texas last August. One has been extradited from Spain, while the others are pending extradition.
The indictment alleges that the five defendants possessed significant influence within the company, which permitted them to solicit vendors for “bribes and kickbacks in exchange for providing assistance to those vendors in connection with their [company] business.” The company vendors included residents of the U.S. and vendors who owned U.S.-based businesses. According to the indictment, two company vendors transferred more than $27 million to accounts in Switzerland that were connected to two of the defendants. The two company vendors previously pleaded guilty in the Southern District of Texas to FCPA charges related to the bribery of company officials.
The charges are part of an ongoing investigation by the DOJ and ICE-HSI into bribery at the company, which has resulted in charges against fifteen individuals, ten of whom have pleaded guilty.
OFAC updates Venezuela-related FAQs, addresses new debt prohibitions
On February 12, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced the release of updated FAQs to provide additional guidance on debt-related prohibitions outlined in Executive Order 13808 (E.O. 13808). Specifically, under E.O. 13808, U.S. persons (along with persons within the U.S.) are prohibited from “engaging in transactions related to, providing financing for, or otherwise dealing in new debt” with maturities longer than 90 days for Venezuela’s state-owned oil company or 30 days for other segments of the Government of Venezuela. “New debt” is defined as debt created on or after August 25, 2017, which includes the extension of credit for the sale of goods or services. OFAC cautioned that receiving payments outside of the stipulated maturity payments is generally prohibited. The FAQs also address the handling of certain late payments related to new debt incurred by the state-owned oil company or the Government of Venezuela.
See here for previous InfoBytes coverage of Venezuelan sanctions.
OFAC releases updated Venezuela-related FAQs
On January 19, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced the release of updated FAQs to address the prohibition of United States persons from purchasing or dealing in the Venezuelan government’s proposed digital currency under Executive Order 13808.
See here for previous InfoBytes coverage of Venezuelan sanctions.
OFAC expands Venezuelan and Iranian sanctions
On January 5, the Treasury Department’s Office of Foreign Assets Control (OFAC) imposed additional sanctions against four current or former officials of the Venezuelan government. The designations, issued pursuant to Executive Order 13692, identify officials who are “associated with corruption and repression in Venezuela” and have “forsaken the professional republican mission of the military institution, which . . . is to be ‘with no political orientation … and in no case at the service of any person or political partisanship.’” All assets belonging to the identified individuals subject to U.S. jurisdiction are frozen, and U.S. persons are generally prohibited from dealing with them. See here for previous InfoBytes coverage of Venezuelan sanctions.
Separately on January 4, OFAC designated five Iranian entities, pursuant to Executive Order 13382 (E.O. 13382), for their ties to Iran’s ballistic missile program. The five entities identified in the designation are either owned or controlled by an Iranian group that is “responsible for the development and production of Iran's solid-propellant ballistic missiles, is listed in the Annex to E.O. 13382 and is currently sanctioned by the U.S., UN, and EU.” In addition to freezing assets subject to U.S. jurisdiction and prohibiting U.S. persons from engaging in transactions with the entities, “foreign financial institutions that knowingly facilitate significant transactions for, or persons that provide material or certain other support to, the entities designated today risk exposure to sanctions that could sever their access to the U.S. financial system or block their property and interests in property under U.S. jurisdiction.” See here for previous InfoBytes coverage of Iranian sanctions.