On March 22, 2019, the Office of Foreign Assets Control (OFAC) designated Venezeula’s national development bank, Banco de Desarrollo Economico y Social de Venezuela (BANDES), as a Specially Designated National (SDN). BANDES was designated as an SDN for operating in the financial sector of the Venezuelan economy. OFAC made this designation pursuant to Executive Order 13850 (on which we previously reported), and has now placed sanctions on entities operating in the financial, gold, and energy sectors of Venezuela for their roles in supporting the Maduro Administration and its corrupt activities. With this designation, the U.S. Government continues to place economic pressure on the Maduro regime in an effort to force it from power in Venezuela.
The designation of BANDES also covers any entity in which it owns a 50% or greater interest, and OFAC specifically designated BANDES affiliates in Uruguay and Bolivia. In addition, Banco de Venezuela, Banco Bicentenario del Pueblo, and Banco Prodem S.A. were placed on the SDN List. OFAC amended General License 4 and issued new General Licenses 15 through 18 to allow U.S. financial institutions and U.S. registered money transmitters to process transactions involving the newly designated banks, as long as the underlying transaction or activity is authorized by the relevant general license.
U.S. companies that do business with these newly sanctioned entities, including U.S. banks with relationships with these Venezuelan banks, should take immediate action to determine whether winding down contracts or agreements, or taking other action to reduce exposure to the relevant entity, is appropriate for their business. Additionally, Secretary of State Mike Pompeo recently denounced Russia's involvement in Venezuela, stating that the United States would "not stand idly by as Russia exacerbates tensions in Venezuela." While the U.S. Government has not announced any particular course of action in response to these recent developments, we are continuing to watch this space.