On January 28, 2019 the U.S. Treasury’s Office of Foreign Asset Control announced sanctions against Petróleos de Venezuela, S.A. (PDVSA), Venezuela’s state-owned oil company, pursuant to Executive Order (EO) 13850. The purpose of the EO 13850 is to target rampant corruption within the Venezuelan government, which according to the US government has exacerbated “the economic and humanitarian crises afflicting the Venezuelan people.”
As a result, US persons are now broadly prohibited from engaging in transactions with PDVSA, including its majority-owned subsidiaries. Previously, PDVSA had only been subject to limited sanctions imposing restrictions on certain debt and equity transactions.
In light of the impact the blacklisting of an entity such as PDVSA would have on the United States and beyond, OFAC rolled out a slew of general licenses (summarized below) authorizing US persons to engage in certain transactions involving PDVSA and its majority-owned subsidiaries – two of which PDV Holding, Inc. (PDVH) and CITGO Holding Inc. (CITGO) are US entities.