When considering Venezuela in the context of U.S. export controls and sanctions, it’s essential to grasp the fundamental aspects, such as the specific sanctions in place and Venezuela’s status under the International Traffic in Arms Regulation (ITAR) and the Export Administration Regulations (EAR).
Under ITAR and EAR, Venezuela is subject to stringent restrictions and controls due to U.S. foreign policy and national security concerns. Since 2005, Venezuela has been under targeted U.S. sanctions aimed at the governments of Nicolás Maduro (and previously Hugo Chávez), as well as individuals engaged in criminal activities, corruption, and anti-democratic practices. These sanctions encompass not only sanctions on Venezuelan individuals and entities but also sectoral and financial restrictions.
Venezuela and the ITAR
Under the ITAR, Venezuela is included in the 126.1 proscribed list, which prohibits the import, export, and sales from and to particular countries. This list is mainly determined by three key factors: 1.) United Nations Security Council sanctions that mandate the prohibition of exports and sales to specified countries, 2.) prohibition on the export or temporary import of defense articles or services to countries designated as State Sponsors of Terrorism by the Secretary of State, and 3.) countries subject to US arms embargoes.
Venezuela specifically falls under category d(1) of the proscribed list which refers to the policy of denial for defense articles and defense services. In addition, under the ITAR the US has placed prohibition on all commercial arms sales and retransfers to Venezuela. It is important to note that if an arms embargo is placed under the ITAR, it also applies to the EAR, even if it is yet to be reflected in the regulations.
Venezuela and the EAR
Regarding the Export Administration Regulations (EAR), Venezuela is designated within Country Group D. Venezuela’s inclusion to this list also means exports and reexports to, and transfers within Venezuela, are ineligible for specific license exceptions outlined in Part 740 of the EAR. Nations classified in this group face heightened restrictions and generally have access to fewer license exceptions. This inclusion is driven by national security concerns and aims to curtail these countries’ capabilities to proliferate weapons of mass destruction (WMDs), ballistic missiles, and arms. Specifically, Venezuela is identified as a country of concern across all five of Country Group D subgroups D:1-D:5. These are:
- D:1: National security concerns
- D:2: Nuclear proliferation concerns
- D:3: Chemical & biological proliferation concerns
- D:4: Missile technology proliferation concerns
- D:5: U.S. arms embargoed countries
For more information on the impact of the Country Groups and other country lists under the EAR take a look here.
Venezuela is also affected by section 744.21 of the EAR, which imposes controls on specific items detailed in Supplement No. 2 to Part 744 for their export, reexport, and in-country transfers when there is knowledge that the item is intended for a military end use or a military end user in Venezuela (or certain other countries). 744.22 similarly imposes license requirements on exports, reexports, or transfers to Venezuela of all items subject to EAR when they are intended for a military-intelligence end use or a military-intelligence end-user.
Exporters to Venezuela must file Electronic Export Information (EEI) in the Automated Export System (AES) for items subject to the EAR. This applies to all exports of items on the Commerce Control List to Venezuela, regardless of value.
U.S. Sanctions on Venezuela
Regarding sanctions on Venezuela, the United States, under the Trump administration, imposed further targeted sanctions in 2019. Specifically, the U.S. sanctioned the Maduro government through Executive Order (EO) 13884. This order prohibits U.S. persons and entities from engaging in transactions with the Venezuelan government unless explicitly authorized by the Office of Foreign Assets Control (OFAC). However the people of Venezuela are not subject to comprehensive US sanctions. U.S. persons can still export or reexport goods to Venezuela, provided they avoid transactions with sanctioned individuals or entities and refrain from prohibited activities. Those involved in such exports and reexports are also advised to consult the Department of Commerce’s Bureau of Industry and Security to ensure compliance with their regulations regarding the eligibility of exports and reexports.
It is also important to note that EO 13884 does not proscribe transactions involved with the Venezuelan government involving food, medicine, clothing, and others used to alleviate human suffering. In relation to this, OFAC issued General License 4C to allow such transactions for export and reexport of medicine, medicine devices, agricultural commodities, replacement parts and components for medical devices, software updates for medical devices to Venezuela or to individuals in third countries purchasing items to resale to Venezuela.
In 2024, OFAC amended licenses to authorize certain transactions to Venezuela. Under the Biden administration, these licenses aimed to encourage Nicolás Maduro’s government to hold fair and competitive elections. In 2022, OFAC allowed Chevron to resume operations with Venezuela’s state oil company, PdVSA, and issued a license to resume import and export of petroleum. Following this, in 2023, Maduro and the opposition signed the Barbados Agreement focusing on a pathway to conduct fair elections. Consequently, General License 43 (authorizing transactions with Minerven) and General License 44 (authorized transactions with the oil and gas sector) were issued. However, due to undemocratic practices from the Maduro government, OFAC revised these licenses in early 2024 to GL 43A (winding down transactions with CVG Compania General de Mineria) and GL 44A (winding down oil and gas sector operations).
Most recently on May 10 2024, OFAC issued a General License 8N to allow specific transactions that were previously prohibited by the Venezuelan Sanctions Regulations. This license replaces the previous General License 8M and is valid until November 15, 2024. This license permits limited transactions with Venezuela’s state oil company, PdVSA, under specific conditions, and facilitates the wind down of operations for certain entities. The license allows companies such as Halliburton, Schlumberger Limited, Baker Hughes Holdings LLC, and Weatherford International to perform necessary maintenance or wind down activities involving PdVSA, provided these agreements were in effect before July 26, 2019. However, the license does not authorize activities such as drilling, processing, purchasing, or shipping Venezuelan oil, repairing facilities, paying dividends to PdVSA, etc. This measure is designed to enable limited interactions while maintaining broad restrictions on business activities with PdVSA.
These sanctions and regulations may change as the political climate in Venezuela evolves, particularly with the upcoming elections on July 28, 2024. Although enhanced democratic processes may not be evident during these elections, it seems that U.S. sanctions and export controls towards Venezuela have relaxed and may continue to do so depending on the election outcomes.
Resources
- Venezuela sanctions from OFAC’s website
- OFAC’s information related to General Licenses and FAQs on Venezuela
Do you have questions about your organization’s export controls?
Visit fld4.ccst-med.com to learn about our company, our faculty, our staff and our esteemed Export Compliance Professional (ECoP®) certification program. To find upcoming e-seminars, live seminars in the U.S., Europe and elsewhere, and live webinars and browse our catalog of 80-plus on-demand webinars, visit our ECTI Academy. You can also call the Export Compliance Training Institute at 540-433-3977 for more information.
Maria G. Ferree is Export Controls Associate at ECTI
