On April 17, 2024, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Venezuela-related General License 44A, “Authorizing the Wind Down of Transactions Related to Oil or Gas Sector Operations in Venezuela.” This license replaces General License (GL) 44 that was issued in October 2023 allowing for certain activities in this sector, including those involving Petróleos de Venezuela S.A. (PdVSA) and its 50% or more owned entities (PdVSA Entities), otherwise prohibited under the Venezuela Sanctions Regulations. New GL 44A is significantly different in that it provides authorization for the wind down of such transactions related to oil or gas sector operations in Venezuela. Accordingly, all transactions previously authorized under GL44 must be wound down no later than 12:01 a.m. EDT, May 31, 2024.

As noted, this GL originally temporarily authorized transactions that are related to oil and gas sector operations in Venezuela that would otherwise be prohibited under the Venezuela Sanctions Regulations. This authorization was granted in October 2023, in response to a political agreement between Venezuelan President Nicolás Maduro’s representatives and the Unitary Platform as a step forward in restoring democracy in Venezuela. See Thompson Hine Update of October 24, 2023. At that time, OFAC made clear that the easing of these sanctions was conditional and could be rescinded if commitments were not met by Venezuela. On January 30, 2024, the Department of State announced the United States would be reinstating certain sanctions actions on Venezuela in light of activities by President Maduro that undermined these commitments. In this announcement, the State Department noted that “absent progress … [in] allowing all presidential candidates to compete in this year’s election,” GL 44 would not be renewed when it expired on April 18, 2024. See Thompson Hine Update of February 1, 2024

In a press statement on April 17, 2024, the State Department indicated that, “After a careful review of the current situation in Venezuela, the United States determined Nicolás Maduro and his representatives have not fully met the commitments made under the electoral roadmap agreement, which was signed by Maduro representatives and the opposition in Barbados in October 2023.” Thus, replacement Venezuela GL 44A, will allow for an orderly 45-day process to wind down any ongoing activities.

In a separate set of FAQs on this topic, OFAC made clear that entering into new business, including new investment, as of April 17, 2024, that was previously authorized under GL 44 is not considered wind-down activity. Further, U.S. persons unable to complete transactions previously authorized by GL 44 before May 31, 2024, are encouraged to seek guidance from OFAC on a case-by-case basis.

Finally, and for further clarity, OFAC notes that “U.S. persons may continue to rely on other OFAC authorizations related to Venezuela’s oil or gas sector operations in Venezuela, including GL 8M, “Authorizing Transactions Involving Petróleos de Venezuela, S.A. (PdVSA) Necessary for the Limited Maintenance of Essential Operations in Venezuela or the Wind Down of Operations in Venezuela for Certain Entities” and GL 41, “Authorizing Certain Transactions Related to Chevron Corporation’s Joint Ventures in Venezuela,” despite the issuance of GL 44A.” For details on these GLs, see Thompson Hine Updates of November 28, 2022 (for GL 41) and November 20, 2023 (for GL 8M).