Key Takeaways
Certain Administrative Transactions Authorized: Venezuela-related General License 35 authorizes certain transactions with the government of Venezuela otherwise prohibited by EO 13884. Companies may now pay taxes, fees and import duties to, and purchase permits, licenses, registrations, certifications and public utility services from, the government of Venezuela where such transactions are “necessary and ordinarily incident to [their] day-to-day operations.”
Until the issuance of this general license, U.S. persons could conduct certain business in Venezuela only to the extent they were not dealing with the government of Venezuela or other blocked persons or blocked property. However, in practice, it was extremely difficult to conduct any business in Venezuela that did not engage the government of Venezuela in some way, including through paying import duties, taxes or utility bills. The issuance of the long-awaited General License 35 authorizes these administrative payments, allowing U.S. persons to now conduct otherwise authorized business in Venezuela.
Mandatory Reporting Requirements: U.S. persons relying on the authorization in General License 35 must submit regular reports to OFAC and the Department of State detailing any U.S. dollar payments made to the government of Venezuela pursuant to the authorization of the general license. (U.S. banks that process these payments are not required to report – OFAC’s concern appears to be focused on U.S. persons who engage directly with the Government of Venezuela.) Companies must submit an initial report by February 10, 2020, as well as biannual reports in August and February of each year the authorization remains in place. OFAC maintains that the U.S. will continue to target corruption in Venezuela and encourages companies that rely on General License 35 “to exercise appropriate due diligence to ensure compliance with the terms of the authorization.”
Certain Transactions With Individuals Authorized: Venezuela-related General License 34A authorizes transactions with certain government of Venezuela individuals. Specifically, General License 34A amends General License 34 of September 9, 2019, to include a new category of authorized individuals: “current employees and contractors of the Government of Venezuela who provide health or education services in Venezuela, including at hospitals, schools, and universities.” It continues to authorize transactions involving the four categories of individuals originally covered in General License 34: (i) U.S. citizens; (ii) permanent resident aliens of the United States; (iii) individuals who have a valid U.S. immigrant or nonimmigrant visa, other than individuals in the United States as part of Venezuela’s mission to the United Nations; and (iv) former employees and contractors of the government of Venezuela. Further, General License 34A adds a new authorization for transactions related to a covered individual’s receipt of a salary, pension, annuity or other employment-related payments of benefits from the government of Venezuela.
