New Venezuela-related Sanctions
The Office of Foreign Assets Control (“OFAC”) has dusted off Executive Order 13692 issued on March 8, 2015 by former president Barack Obama to impose additional sanctions on Maduro’s regime in Venezuela. This executive order authorizes OFAC to include individuals and entities in its list of Specially Designated Nationals and Blocked Persons (“SDN List”) when OFAC, in consultation with the Secretary of State, determines that they have engaged in actions against democracy or freedom of expression, human rights abuses, or corruption in Venezuela.
Executive Order 13692 also authorizes OFAC to sanction any current or former official of the Government of Venezuela, and persons who have assisted, in any way, individuals or entities that have been previously sanctioned by OFAC.
First, on June 27, 2019, OFAC added the former minister of Electric Power and President of the National Electric Corporation (CORPOELEC), Luis Alfredo Motta Dominguez, and the Deputy Minister of Finance, Investments, and Strategic Alliances for the Ministry of Electric Power, Eustiquio Jose Lugo Gomez to its list of Specially Designated Nationals and Blocked Persons (“SDN List”). OFAC sanctioned these individuals for being “two Maduro regime officials who continue to engage in significant corruption and fraud to the detriment of the people of Venezuela.” Specifically, OFAC referred to the negative consequences that the constant power outages have had in Venezuela, including additional restrictions to the people’s access to basic goods, services, potable water supplies, and health services.
OFAC also imposed its sanction after Motta and Lugo were charged in an indictment returned on June 27, 2019 for conspiring with others to launder the proceeds of violations of the Foreign Corrupt Practices Act (FCPA) through bank accounts located in the Southern District of Florida. The indictment alleges that beginning in or around January 2016 and continuing through December 2018, Motta and Lugo awarded three Florida-based companies more than $60 Million in procurement contracts with CORPOELEC in exchange for bribes paid to them or for their benefit.
This indictment followed the guilty pleas of two businessman on June 24, 2019 before U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida to one count of conspiracy to violate the FCPA in connection with the corrupt payment scheme at CORPOELEC.
Second, on June 28, 2019, OFAC added Nicolas Maduro’s son, “Nicolasito” Ernesto Maduro Guerra, for being a current or former official of the Government of Venezuela. OFAC also referenced that Maduro Guerra has been involved “in propaganda and censorship efforts, and has profited from Venezuelan mines along with Maduro and his wife, Cilia Flores.”
Accordingly, all property or interest in property of Luis Alfredo Motta Domínguez, Eustiquio José Lugo Gómez, and Nicolas Maduro Guerra, within or transiting U.S. jurisdiction has been blocked. Additionally, if they are not authorized by a general or specific license issued by OFAC, U.S. persons are prohibited from engaging in transactions with them or entities in which they have, directly or indirectly, 50% or greater ownership interest.
The number of individuals and entities added to the SDN List pursuant to Executive Order 13692 is expected to grow in the following days.