New OFAC License Permits Sales of US-Origin Diluents to Venezuela
The Office of Foreign Assets Control issued a new general license this week to authorize the sale to Venezuela of U.S.-origin diluents, a fuel needed to make exportable crude oil.
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General License 47 authorizes the export, reexport, sale, resale, supply, storage, marketing, delivery or transportation of U.S.-origin diluents to Venezuela as long as any contract with the Venezuelan government, state-owned energy company Petroleos de Venezuela, or any PdVSA majority-owned entity specifies that the "laws of the United States or any jurisdiction within the United States govern the contract and that any dispute resolution under the contract occur in the United States."
Transactions that are authorized include the processing of payments, arranging shipping and logistics services, obtaining marine insurance and protection and indemnity coverage, and arranging port and terminal services, including with Venezuelan government port authorities or terminal operators.
The license doesn't authorize payment terms that are "not commercially reasonable, involve debt swaps or payments in gold, or are denominated in digital currency, digital coin, or digital tokens issued by, for, or on behalf of" the Venezuelan government, including the petro. The license also can't be used for transactions involving people or entities in Russia, Iran, North Korea or Cuba or any entities owned or indirectly controlled by them, along with any sanctioned vessels.
Any person who uses this license to export, sell or supply U.S.-origin diluents to Venezuela must send a "detailed report" to the State and Energy departments that includes the parties involved; the quantities and values; and the dates the transactions occurred. Those reports are due 10 days after the "execution of the first of such transactions and every 90 days thereafter while such transactions are ongoing."
In addition, the license notes that "nothing in this general license relieves any person from compliance with the requirements of other Federal agencies, including the Department of Commerce’s Bureau of Industry and Security." The license has no expiration date.