INSIGHT: Venezuela Sanctions

Insight

Updated:

Introduction

The United States first imposed sanctions targeting the Venezuelan government in 2015. Both the US and EU have designated individuals associated with the regime. The US measures against the government of Venezuela were significantly extended in January 2019 to target PdVSA. While initially thought to have limited direct impact on non-US persons engaged in trade with no US nexus, statements emerging from the US administration during March and April 2019 included warnings that non-US persons dealing with PdVSA might be exposed even in the absence of a US nexus.  (see US Treasury press release).

An International Group Circular on US Sanctions against the Government of Venezuela and PdVSA was published on 12 September 2019.

A further significant development took place with the publication of Executive Order 13884 on 5 August 2019, together with amended and new FAQs and general licenses.  All property of the Government of Venezuela in the US or within the control or possession of US persons is blocked. The term "Government of Venezuela" is widely defined and includes PdVSA (see E.O. 13850, as amended by E.O. 13857, Sec 6(d)). As with earlier measures, the question arises of application to non-US persons – see EO 13850 Sec 1(a)(iii) below.  E.O. 13884 authorises asset freezing on "any person" determined to (i) have materially assisted or supported any person or entity whose property is blocked pursuant to the E.O., or (ii) be owned or controlled by or to have acted on behalf of any such person or entity. The carriage of cargo may well fall within the scope of material assistance.

The intention behind the E.O. therefore is to expose non-US persons and entities to US sanctions - or at the very least to deter them from doing business with the Maduro regime.

It should be noted that sanctions regulations are subject to change without notice and with immediate effect. The situation in Venezuela is volatile and the US, EU and other States may expand or remove sanctions to reflect political developments. Since the designation of PdVSA, the US has continued to make regular additions to the SDN list.

US

The United States first imposed sanctions targeting the Venezuelan government in 2015. The US measures against the government of Venezuela were significantly extended in January 2019 with issue of Executive Order 13857 which extended the scope of Executive Order 13850 by designating Petroleos de Venezuela, S.A (PdVSA) as a Specially Designated National ("SDN"). This includes entities in which PdVSA owns, directly or indirectly, a 50 percent or greater interest, subject to some limited relief for PdVSA's US subsidiaries CITGO and PDV Holdings.

The designation prohibits US persons from engaging in transactions with PdVSA or its subsidiaries unless they are able to bring themselves within the scope of a General License. All PdVSA property which is subject to US jurisdiction is blocked.

The designation does not on the face of it have extraterritorial effect, but non-US persons may be affected in a number of ways:

  • The US government can impose sanctions an "any person" (including non-US persons) determined to have "...materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of... any person whose property and interests in property are blocked pursuant to this order." (EO 13850 Section 1(a)(iii)).
  • Additionally, sanctions may be imposed against non-U.S. persons that are found to operate or have operated in certain sectors of the Venezuelan economy, including the petroleum sector.
  • Non-US companies involved in the transportation of PdVSA cargo to the US must comply with US sanctions.
  • Non-US companies which make or receive PdVSA related payments in USD bring the transaction under US jurisdiction even in relation to cargo which is not carried to the US.
  • A non-US entity should not assist or facilitate a US person (such as a US employee) in acting in contravention of the measures applicable to US persons.

Following the US Administration’s operations in January 2026 involving the Maduro regime in Venezuela, the United States continues to maintain Venezuela sanctions as a comprehensive regime. On 9 January 2026 a new Executive Order 14373 (9 January 2026) was published establishing a protective legal regime for Venezuelan oil‑related revenues by declaring a U.S. national emergency and prohibiting any attachment, seizure, or judicial process against specified Venezuelan state funds held under U.S. control. The Order defines “Foreign Government Deposit Funds” as proceeds derived from the sale of Venezuelan natural resources or diluents that are paid to or held by the U.S. Government (including on behalf of PdVSA or the Central Bank of Venezuela), confirms these funds remain sovereign property of Venezuela, and centralises U.S. authority over any transfer or use of such funds.

At the same time, OFAC is selectively authorizing limited activity - primarily in the oil sector- through tightly scoped General Licenses for eligible U.S. entities or individual licenses, subject to strict conditions, reporting, and payment controls.

On 29 January 2026, OFAC issued General License 46 (“G.L. 46”), which was replaced on 10 of February with General License 46A  Authorizing Certain Activities Involving Venezuelan-Origin Oil (“GL 46A”) maintaining the authorization framework for certain activities involving Venezuelan-origin oil by established U.S. entities and the Government of Venezuela, PdVSA, provided that certain conditions being satisfied:

  • any contract for transactions authorized by G.L. 46A must specify that the laws of the United States, or any jurisdiction within the United States, govern the contract and that dispute resolution must occur in the United States
  • any monetary payment to a blocked person must be made into the “Foreign Government Deposit Funds” pursuant to E.O. 14373, or any other account as instructed by the U.S. Department of the Treasury.
  • any person that exports, reexports, sells, resells or supplies Venezuelan-origin oil to countries other than the U.S. must provide a detailed report to the US authorities 10 days after execution of the first transaction and every 90 days after if transactions are ongoing.

Further G.L. 46A also includes details that the types of transactions authorized: arranging shipping and logistics services; chartering vessels; obtaining marine insurance and P&I coverage; arranging port and terminal services (including with authorities and operators that are part of the Government of Venezuela); and commercially reasonable payments in the form of swaps of crude oil, diluents, or refined petroleum products.

G.L. 46A further clarifies that certain activities and matters expressly not authorized by G.L. 46A, including:

  • Payment terms that are not commercially reasonable, involve debt swaps or payments in gold, or are denominated by digital currency, tokens, or coins issued by, for, or on behalf of the Government of Venezuela.
  • Any transaction involving a person located in or organized under the laws of the Russian Federation, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, the Republic of Cuba, or any entity that is owned or controlled, directly or indirectly, by or in a joint venture with such persons.
  • The unblocking of any blocked property or transactions with blocked vessels.

The US has so far published 10 FAQs to GL 46 explaining that:

  • Financial institutions can rely on customer statements that transactions are consistent with the GL, unless it knows or has reason to know otherwise.
  • The dispute resolution requirement in GL 46 only applies to Venezuelan state-owned entities and their subsidiaries.
  • GL 46 does not authorise payments that are not commercially reasonable. “Commercially reasonable terms” means terms that are consistent with prevailing market and industry standards for like or similar products produced by a company of similar size and scope, while taking into account characteristics such as quality, quantity, pricing, performance, and safety, among others.
  • Non-US persons may engage in transactions or provide services that are ordinarily incident and necessary to the established US entity’s transactions authorised by GL 46.
  • GL 46 authorises certain activity by an “established US entity”. “Established US entity” means any entity organised under US law or any US jurisdiction on or before 29 January 2025.
  • GL 46 does not permit exploration activity or negotiations for new investment activities.
  • Venezuelan-origin oil means crude oil or petroleum products extracted, refined, or exported from Venezuela, regardless of the nationality of the entity involved in the production or sale of such crude oil or petroleum products.

On 3 February 2026, OFAC issued General License No. 47: “Authorizing the Sale of U.S.-Origin Diluents to Venezuela”  (“G.L. 47”).

GL 47 authorizes transactions involving the Government of Venezuela and/or PdVSA involving the sale of U.S.-origin diluents to Venezuela, provided that many of the same conditions regarding the identity of the parties involved, contractual language and payment terms as set forth in G.L. 46A are met.

Pursuant to section (a) of G.L. 47, all transactions prohibited by the US sanctions, including those involving the Government of Venezuela, PdVSA, or any entity owned, directly or indirectly, by PdVSA that are ordinarily incident and necessary to the exportation, reexportation, sale, resale, supply, storage, marketing, delivery, or transportation of U.S.-origin diluents to Venezuela are authorized, provided that “any contract for such transactions with the Government of Venezuela, PdVSA, or PdVSA Entities specify that the laws of the United States or any jurisdiction within the United States govern the contract and that any dispute resolution under the contract occur in the United States.”

GL 47 further specifies what the types of transactions are authorized:

  • Arranging shipping and logistics services;
  • Chartering vessels;
  • Obtaining marine insurance and P&I coverage;
  • Arranging port and terminal services (including with authorities and operators that are part of the Government of Venezuela).

Importantly, we note that G.L. 47 only applies to U.S.-origin diluents, and does not apply to any non-U.S. origin diluents.

Like GL 46A, GL 47 does not authorise transactions involving persons located in, or organized under the laws of, Iran, North Korea or Cuba, or any entity that is owned or controlled by or in a joint venture with such persons; or transactions involving blocked vessels. There are same mandatory reporting obligations as under GL 46A.

On 10 February 2026 another 2 General licenses were issued - General License 48 Authorizing the Supply of Certain Items and Services to Venezuela (GL 48) . GL 48 permits the provision by U.S. persons of certain goods, technology, software, and services related to the exploration, development, production, and maintenance of oil and gas operations in Venezuela.

GL 48 does not authorise the following activities:

  • Payment terms that are not commercially reasonable, involve debt swaps or payments in gold, or are denominated by digital currency, tokens, or coins issued by, for, or on behalf of the Government of Venezuela.
  • Transactions involving a person located in or organized under the laws of the Russian Federation, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, the Republic of Cuba, the People’s Republic of China, or any entity that is owned or controlled, directly or indirectly, by or in a joint venture with such persons.
  • The unblocking of any blocked property or transactions with blocked vessels.

And General License 30B - Authorizing Certain Transactions Necessary to Port and Airport Operations (GL 30 B).

GL 30B Replaces and supersedes GL 30A, continuing the authorization of transactions ordinarily incident and necessary to the operation or use of ports and airports in Venezuela, including dealings involving Instituto Nacional de los Espacios Acuaticos (INEA).

GL 30B does not authorize any transactions or activities otherwise prohibited by the US Venezuela sanctions, or any transactions or activities with any blocked person other than INEA, or any entity in which INEA owns, directly or indirectly, a 50 percent or greater interest.

On 13 February 2026 the US has issued two Venezuela general licences to authorise transactions for contingent contracts and oil and gas operations in Venezuela ("GL 49 and GL 50"); the latter was replaced with General License 50A on February 18 ("GL 50A").

Venezuela GL 49 authorises transactions related to the "negotiation of and entry into contingent contracts for new investment in oil or gas sector operations in Venezuela".

  • Contingent contract includes executory contracts, executory pro forma invoices, agreements in principle and any other similar agreement. The performance of any such contract must be expressly contingent upon separate authorization from OFAC.
  • The GL extends to entities owned by the Venezuelan government (including the PdVSA).
  • It does not authorise transactions involving people/entities in Russia, Iran, North Korea, Cuba, or China.
  • It also does not authorise transactions involving US-sanctioned vessels.

It is important to note that GL 49 authorizes structuring and documentation of future projects, not operational performance. No exploration, production, exportation, transportation, payment execution, or other operational implementation is authorized under GL 49 unless separately permitted.

Venezuela GL 50A authorises specially named entities to engage in transactions "related to oil or gas sector operations in Venezuela".

  • The entities are BP PLC, Chevron Corporation, Eni S.p.A., Établissements Maurel & Prom SA, Repsol S.A. Shell PLC.
  • Any contract involving the Venezuelan Government, PdVSA, or any of their entities, must have dispute resolution and governing law clauses referring to US law.
  • Any payment to a sanctioned person, excluding payments for local taxes, must be paid into the Foreign Government Deposit Funds as specified in Executive Order 14373. This includes payments of oil or gas tazes or royalties to the Venezuelan Government/PdVSA/their entities.
  • Transactions involving people/entities in Russia, Iran, North Korea, Cuba, or China are not authorised.
  • Transactions are not authorised if they involved a sanctioned vessel.
  • Any person engaging in transactions under GL 50A must report to the US authorities within 10 days of the first transaction and every 90 days thereafter.

It is important to note that these authorizations do not remove sanctions, do not delist PdVSA or the Government of Venezuela, and can be modified or withdrawn. Outside the scope of a valid OFAC license, U.S. sanctions prohibitions remain fully applicable.

For full text of Venezuela Sanctions Regulations  please see: eCFR – 31 CFR Part 591 (Venezuela Sanctions Regulations) [ecfr.gov] and further information about US sanctions is available on US Treasury Resource Center for Venezuela Sanctions.

A check on the OFAC Sanctions Search will identify designated individuals and entities.

EU

The European Union sanctions against the Venezuelan regime are far more limited in scope. There are measures which ban travel and freeze assets of 18 individuals closely connected with the Maduro regime and an embargo on arms and equipment for internal repression. EU's restrictive measures in relation to Venezuela due to their ongoing political, economic, social and humanitarian crisis and satiation with the rule of law and human rights are now extended until 14 November 2023, see Council Decision (CFSP) 2022/2201 and Council Implementing Regulation (EU) 2022/2194. These provisions have been implemented in Norway.

Cover

Members are reminded that cover is unavailable for trade that breaches applicable sanctions. Therefore, members are strongly advised to exercise the highest level of caution when considering shipments to or from Venezuela, when dealing with Venezuelan entities or individuals, and most importantly, when lifting Venezuelan-origin cargoes. In accordance with sanctions regulators' standards, members should conduct their own enhanced due diligence investigations to avoid any element of illegality, such as prohibited cargoes, prohibited activities, or dealings with Specially Designated Nationals (SDNs) in their fixtures. This is particularly important in the light of the volatile situation.

Skuld’s position remains that while Skuld can give guidance, the ultimate responsibility for compliance rests with members and clients.

Our Rules contain exclusion of liability for costs, liabilities or expenses where payment by the Association or the provision of cover in respect thereof may expose the Association to the risk of being subject to a sanction, prohibition or any adverse action (Rule 30.4.6).

We also remind that we exclude the liability of the Association towards the member or assured when there is a shortfall due to an inability to recover reinsurance or pool contributions from other insurers or P&I Clubs which are themselves unable to pay due to sanctions legislation (Rule 32.6). In addition, we have a provision giving the Association the right to terminate cover where, in the opinion of the Association, the member has exposed or may expose the Association to the risk of being or becoming subject to a sanction, prohibition, restriction or other adverse action by a state or international organisation or competent authority (Rule 3.3.2 e). The same provisions are also included in the Terms & Conditions governing Skuld's fixed premium covers.

We also continue to experience difficulties in executing payments to Venezuela due to ongoing banking restrictions and compliance challenges. These issues may affect the availability and reliability of payment channels and provision of security. We advise members and clients to anticipate potential challenges and to consult with their financial institutions for guidance on transaction feasibility.