Overview of EO 13884
Unlike many other Venezuela sanctions authorities, which impose restrictions on dealing in Venezuelan debt instruments or the provision of financing to GOV entities, EO 13884 is relatively uncomplicated in concept – it imposes full blocking sanctions on the Venezuelan government and all of its owned or controlled entities. Many of those entities – most notably, Petroleos de Venezuela S.A. (“PdVSA”) – were already subject to blocking sanctions by virtue of having previously been added to the List of Specially Designated Nationals and Blocked Persons (”SDN List”) maintained by the Office of Foreign Assets Control (“OFAC”). In this sense, EO 13884 is limited in reach.
However, the potential scope of EO 13884 is broad. That is principally because of two factors. First, EO 13884 includes an expansive definition of the GOV – extending not just to entities owned by the GOV, but also to entities controlled by it or to any persons acting for or on its behalf. Second, EO 13884 authorizes the imposition of sanctions on any non-U.S. entities who materially provide certain financial, material, or technological support to entities blocked pursuant to its authority. That means that non-U.S. companies engaging in even ordinary commercial trade with Venezuela could face a significant risk of being added to the SDN List themselves, to the extent such trade involves the provision of goods, money, or services to the GOV.
As if to underscore how far-reaching EO 13884 might become, OFAC also issued 13 new GLs and 12 amended GLs to narrow the scope of its prohibitions. Many of those were technical revisions to ensure that EO 13884 didn’t layer any new restrictions upon previously authorized transactions. For instance, GL 7C was amended so that US persons may continue engaging in transactions with CITGO Holding, Inc., which had previously been subject to blocking sanctions and authorization under GL 7 as a subsidiary of PdVSA, but which EO 13884 also blocked because of its status as a GOV entity. To that end, EO 13884 does not affect: