Sanctions Guide: Venezuela

Our Comprehensive Guide on Sanctions Against Venezuela by the EU, UK, and US

Overview

Sanctions against Venezuela from the European Union (EU), the United Kingdom (UK), and the United States (US) have been imposed in response to the country’s political instability, democratic deterioration, human rights violations, and corruption. Notably, there are no United Nations (UN) sanctions on Venezuela.

Key Facts:

• EU and UK: Sanctions target those undermining democracy and repressing civil society.

• US: Sanctions, first imposed in 2005/2006, address anti-drug efforts, counter-terrorism cooperation, and sector-specific measures (especially in the energy sector).

  
  

National Competent Authorities

For effective compliance with sanctions, exporters, and businesses must understand the role of National Competent Authorities (NCAs) responsible for enforcing them. These NCAs monitor and authorize transactions and licences and ensure that sanctions are followed in trade with Venezuela.

• EU:

  • National authorities of each EU Member State oversee the application of sanctions. Exporters should refer to the national guidance for specific licensing and reporting requirements.

• UK:

  • The Office of Financial Sanctions Implementation (OFSI) under HM Treasury enforces sanctions and offers guidance to exporters.

• US:

  • The Office of Foreign Assets Control (OFAC), which is part of the Department of the Treasury, administers and enforces economic and trade sanctions.

    
    

Legislation Concerning Sanctions Against Venezuela

EU Sanctions

The EU imposed sanctions in 2017 through Council Regulation (EU) 2017/2063 and Council Decision (CFSP) 2017/2074 in response to human rights abuses, repression of civil society, and attacks on democracy. These sanctions include:

• Arms Embargo: Prohibits the export of military equipment and technology.

• Asset Freezes: Targets individuals and entities responsible for human rights abuses or undermining the rule of law.

• Travel Restrictions: Prevents travel within EU member states for sanctioned individuals

  
  

UK Sanctions

Following Brexit, the UK introduced its own Venezuela-specific sanctions under the Venezuela (Sanctions) (EU Exit) Regulations 2019. These sanctions mirror those of the EU and include:

• Arms Embargo: Prohibits the sale of arms to Venezuela.

• Asset Freezes: Freezes the assets of individuals undermining democracy.

• Travel Bans: Restricts the entry of critical figures into the UK.

  
  

US Sanctions

The US sanctions framework against Venezuela has evolved since its inception in 2005/2006, largely driven by concerns about terrorism, drug trafficking, and human rights abuses.

• Early Sanctions (2005/2006): Initial measures aimed at preventing arms sales and arms re-transfers due to Venezuela’s failure to cooperate with US anti-drug and counter-terrorism efforts.

• Executive Orders (E.O.s):

  • E.O. 13692 (2015): Targets individuals involved in actions undermining democracy or committing human rights abuses.

  • E.O. 13808 (2017): Restricts access to US financial markets for Venezuela’s government and state energy company, Petróleos de Venezuela S.A. (PdVSA).

  • E.O. 13850 (2018): Blocks assets of persons involved in sectors of the Venezuelan economy, notably those engaging in corrupt transactions with the Maduro regime.

  • E.O. 13884 (2019): Freezes assets and properties of the Venezuelan government in the US and prohibits any dealings by US persons with the Maduro government.

    
    

Sanctions Lists Applicable to Venezuela

Exporters need to screen transactions and ensure compliance by checking against the following sanctions lists:

• EU Sanctions List: Consolidated list of individuals, entities, and bodies subject to restrictive measures (asset freezes and travel bans).

• UK Sanctions List: Maintained by OFSI, this list includes all individuals and entities under UK sanctions, including Venezuelan officials.

• US OFAC Sanctions List: The Specially Designated Nationals (SDN) list identifies individuals and entities, including Venezuelan officials and companies, whose assets are blocked.

  
  

Guidance Requirements for Exporters to Venezuela

Exporters must adhere to various requirements and restrictions before conducting trade with Venezuela:

• EU: Exporters must ensure they are not engaging with sanctioned individuals or entities and must obtain appropriate licenses for controlled goods (e.g., military or dual-use items).

• UK: Businesses should refer to OFSI for detailed guidance on trade restrictions and the required licenses, particularly concerning arms, equipment, or financial services.

• US: Exporters must comply with OFAC’s sectoral sanctions, especially restrictions on the oil sector and financial transactions. Any dealings with PdVSA, for instance, require compliance with sectoral sanctions and general licenses.

  
  

Licensing Requirements for Exporters to Venezuela

Sanction regimes generally allow for some exemptions through licensing, especially for humanitarian purposes. Exporters should consult the relevant authorities for up-to-date licensing processes:

• EU: Licensing requirements for restricted items such as military equipment are processed through Member States' competent authorities.

• UK: The Export Control Joint Unit (ECJU) handles export licensing for dual-use goods and military equipment.

• US: OFAC issues licenses under specific circumstances (e.g., humanitarian trade, legal services), with general licenses permitting continued operations with PdVSA under limited conditions.

  
  

Reporting Requirements for Exporters to Venezuela

Exporters must follow reporting obligations to ensure transparency in their dealings with Venezuela:

• EU: Businesses must report any dealings with sanctioned individuals or entities to their national authorities.

• UK: Financial institutions and companies are required to report frozen assets or attempted transactions involving sanctioned persons to OFSI.

• US: Companies must file regular reports to OFAC, especially if they have been granted licenses or are involved in authorized activities with PdVSA.

  
  

UN Sanctions

No UN sanctions are imposed on Venezuela, as the UN Security Council has not collectively agreed on measures against the country. This distinguishes Venezuela from other sanctioned states like North Korea or Iran, where UN sanctions play a critical role in shaping global trade policies.

Conclusion

Sanctions on Venezuela reflect a global response to human rights violations, corruption, and the erosion of democratic principles. Exporters must carefully navigate the complexities of these sanctions, ensuring they adhere to legal requirements while staying informed about the evolving nature of these measures.