OFAC Terminates License Authorizing Certain Petroleum-Related Activities in Venezuela
Highlights
- The Trump Administration announced that it would end certain oil-related concessions involving Chevron Corp. operations in Venezuela granted by the Biden Administration.
- The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) issued Venezuela General License 41A, "Authorizing the Wind Down of Certain Transactions Related to Chevron Corporation's Joint Ventures in Venezuela," which allows for previously authorized activities to be subject to a wind-down period.
- Companies operating in, servicing or supplying the Venezuela petroleum sector, or those that previously relied on these concessions, may need to reevaluate their current operations, adopt appropriate controls or pursue other licensing to continue engaging in previously authorized activities.
President Donald Trump announced on Feb. 26, 2025, that he was reversing the authorization granted to Chevron Corp. and its subsidiaries (Chevron) by the Biden Administration as a concession aimed at promoting free elections and human rights reform in Venezuela. The authorization allowed Venezuelan oil into the U.S., historically one of its largest markets, as part of a series of broader concessions provided by the Biden Administration to Venezuelan President Nicolás Maduro's regime. (See Holland & Knight's previous alert, "OFAC Suspends Certain U.S. Sanctions with Respect to Venezuela," Oct. 20, 2023.)
President Trump made the announcement in a Truth Social post, citing failure by the Maduro regime to make electoral reforms as agreed under the prior administration and, furthermore, for failure to expedite migrant returns, which has been a key priority of the Trump Administration. (See Holland & Knight's previous alert, "Trump Threatens Retaliatory Measures vs. Latin American Countries Refusing Repatriation Flights," Jan. 31, 2025.)
Earlier this week, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) issued updated Venezuela General License 41A, "Authorizing the Wind Down of Certain Transactions Related to Chevron Corporation's Joint Ventures in Venezuela" (General License 41A). General License 41A amends the prior General License 41, which, among other things, authorized certain transactions ordinarily incident and necessary to the production, sale, exportation and importation into the U.S. of petroleum and petroleum products produced by Chevron, its subsidiaries or certain Chevron joint ventures in Venezuela.
New General License 41A provides a wind-down period for transactions previously authorized by General License 41 through 12:01 a.m. ET on April 3, 2025. Notably, General License 41A continues to prohibit many of the activities previously prohibited by General License 41.
Notwithstanding the authorizations provided in General License 41A, compliance with the requirements of other federal agencies, including the U.S. Department of Commerce's Bureau of Industry and Security, is still required.
Notably, as of the date of this Holland & Knight alert, OFAC has yet to issue any further guidance regarding General License 41A or the wind-down period associated with activities previously authorized by General License 41.
Looking Ahead
These recent actions by the Trump Administration signify a tightening of U.S. economic measures against the Maduro regime and Venezuela in general, specifically targeting financial flows to the Venezuelan government and its state-owned enterprises, such as Petróleos de Venezuela S.A. These measures affect not only companies operating in the Venezuelan energy sector, but also financial institutions and other organizations that service or supply the Venezuela energy sector (e.g., shipping, import/export, etc.).
U.S. and foreign persons – including financial institutions and other persons who conduct business, directly or indirectly, with companies that operate in these sectors – may need to assess their policies and procedures and implement the necessary controls to comply with the updated regulatory landscape. Other impacted parties that have historically relied on General License 41 may also need to review existing licenses issued by OFAC or pursue new specific licenses should they desire to continue engaging in similar activities going forward.
Holland & Knight's Financial Services Team has vast experience with U.S. sanctions laws, including the sanctions administered by OFAC. For guidance on General License 41A, the VSR or other matters related to U.S. sanctions, please contact the authors.
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