Sanctions on PDVSA Need Not Be Permanent
On April 3, 2020, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) issued General License 13E extending the deadline established by General License 13D for Nynas AB, a subsidiary of Petroleos de Venezuela S.A. (“PDVSA), to conduct certain transactions and activities otherwise prohibited under the Venezuela-related Sanctions. Originally, these transactions and activities had to be conducted before April 13, 2020. With General License 13E, OFAC’s authorization is extended through 12:01 a.m. eastern daylight time, May 14, 2020.
OFAC issued General License 13E because Nynas AB is “engaged with OFAC on a proposed corporate restructuring that could potentially result in significant changes to Nynas AB’s ownership and control.”
With its April 3, 2020 action, OFAC reaffirms that Sanctions seek to bring about a positive change of the behavior of individuals and entities designated in OFAC’s List of Specially Designated Nationals (“SDN List”). Accordingly, OFAC will consider removing sanctions from these individuals and entities if they prove that an insufficient basis exists for OFAC’s sanctions or that the circumstances resulting in OFAC’s sanctions no longer exist.
For example, OFAC’s guidelines define that the best path to sanctions removal for PDVSA and its subsidiaries is through a transfer of ownership and control that ensures the U.S. Government that the assets of Venezuela are preserved for that country’s people.
Anyone placed on the SDN List by OFAC has the right to seek removal under an administrative process known as “De-Listing.” To be removed, listed individuals and entities can file a written request for reconsideration with OFAC. If OFAC denies this request for De-Listing, administrative remedies are deemed exhausted and listed individuals and entities can subsequently file a civil action with a U.S. District Court seeking judicial review of OFAC’s actions under the Administrative Procedure Act.