On July 26, 2017, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) designated 13 current and former senior officials of the Venezuelan government as Specially Designated Nationals (SDNs) due to their activities undermining democracy or supporting corruption. U.S. persons are prohibited from dealing with SDNs. These sanctions come in the lead-up to the controversial July 30, 2017 Venezuelan national constituent assembly election that U.S. politicians have condemned. The United States has also left the door open for additional sanctions if Venezuela proceeds with the election. Any U.S. company or individual doing business in or with Venezuela should remain alert to this situation and carefully consider the effect of sanctions on their transactions and business dealings.
The designations include the following group of individuals:
• Four senior Venezuelan government officials that are actively pursuing the upcoming election or otherwise undermining democracy or human rights in Venezuela;
• Five current and former Venezuelan government officials responsible for violence against and repression of Venezuelan protesters and other citizens; and
• Four current and former Venezuelan government officials tied to Venezuelan governmental corruption. These individuals are associated with Petroleos de Venezuela, S.A. (PDVSA), the Venezuelan state-owned oil enterprise, and the National Center for Foreign Commerce (CENCOEX), the institution in charge of setting Venezuelan exchange rates. PDVSA and CENCOEX themselves were not designated as SDNs.
This is the latest round of sanctions against Venezuelan government officials in response to the continued anti-democratic crackdown. President Obama had previously signed the Venezuela Defense of Human Rights and Civil Society Act of 2014 into law and issued Executive Order 13692 to impose sanctions on Venezuelan officials (on which we previously reported). This year, Venezuelan President Nicolas Maduro has scheduled a national vote to elect a constituent assembly to rewrite the Venezuelan constitution, a vote which the opposition plans to boycott. There is also international concern regarding the legitimacy of this election and its potential to strengthen Maduro’s power at the expense of the opposition-controlled legislature. U.S. Senators Marco Rubio and Bob Menendez sent a letter to President Trump early this week urging sanctions ahead of the planned vote in Venezuela, which the letter described as “fraudulent.”
In OFAC’s press release, it described the planned vote as “flawed,” and one that may “dissolve Venezuelan state institutions.”
The Trump administration has stated that if Venezuela’s government proceeds with the planned vote on Sunday, it is prepared to impose additional sanctions. New sanctions could potentially take the form of additional asset freezes targeting Venezuelan government officials, or more extreme measures restricting Venezuela’s access to the U.S. financial system or Venezuelan oil imports to the United States. Venezuela is currently the third largest supplier of oil to the United States.