The US Department of the Treasury’s Office of Foreign Assets Control (‘OFAC’) has issued a licence permitting some transactions with PDV Holding, Inc. and CITGO Holding, Inc., which would otherwise be prohibited under Executive Order 13850 of 1 November 2018. The two companies are subsidiaries of Venezuelan national oil company, Petróleos de Venezuela, S.A. (‘PdVSA’), which is sanctioned by the US.
OFAC says that General License No.7A ‘provides an 18-month authorization that renews automatically on a monthly basis, which will enable CITGO to maintain operations in markets that are based on long-term planning and contractual commitments.’
Paragraph (b) of General License NO.7A states that, with provisos, ‘PDVH, CITGO Holding, Inc., and any of their subsidiaries are authorized to engage in all transactions and activities prohibited by Executive Order 13850 that are ordinarily incident and necessary to the purchase and importation of petroleum and petroleum products from PdVSA and any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest. This authorization is valid through 12:01 a.m. eastern daylight time, April 28, 2019.’
The licence does not authorise,
‘(1) Any exportation or reexportation of any goods, services, or technology, directly or indirectly, by U.S. persons, wherever located, or from the United States, to PdVSA or any entity owned 50 percent or more, directly or indirectly, by PdVSA, other than PDVH, CITGO Holding, Inc., or any of their subsidiaries, or to any other blocked persons;
(2) Any transaction that is otherwise prohibited under Executive Order 13850 of November 1, 2018, Executive Order 13835 of May 21, 2018, Executive Order 13827 of March 19, 2018, Executive Order 13808 of August 24, 2017, Executive Order 13692 of March 8, 2015, or any part of 31 C.F.R. chapter V, or any transactions or dealings with any blocked person other than the transactions described in paragraphs ( a) and (b) of this general license; or
(3) The unblocking of any property blocked pursuant to any part of 31 C.F.R. chapter V, except as authorized by paragraphs (a) or (b).’
OFAC says that the extension ‘will further enable CITGO’s ongoing operations while prohibiting any benefit from flowing back to the illegitimate Maduro regime.’