The International Group of P&I Clubs has released an update to Circular No.23-015 (December 6th 2023) regarding temporary authorization of certain transactions involving oil, gas and gold in Venezuela.
Following the US’s dissatisfaction with the performance of the Venezuelan government relating to President Maduro’s promise to offer “free and fair elections” by mid 2024, General License 44, which authorized transactions relating to oil and gas sector operations in Venezuela expired without renewal at 12:01am eastern daylight time on April 18th 2024.
It has been replaced by General License 44A, which authorizes through to May 31st 2024 the winding down of transactions previously permitted under General License 44.
OFAC also issued an updated list of FAQs which made it plain that entering into new business, including new investment, that was previously authorized under GL 44, would not be considered wind-down activity under General License 44A. This meant that all activities conducted during the wind-down period must be performed pursuant to business entered into prior to April 17th 2024.
The FAQs further clarified that US and non-US persons could continue to rely on other authorizations related to Venezuela’s oil or gas sector operations in Venezuela. These include General License 8M, which authorized transactions involving PdVSA “Necessary for the Limited Maintenance of Essential Operations in Venezuela or the Wind Down of Operations in Venezuela for Certain Entities” and General License 41, which authorized “Certain Transactions Related to Chevron Corporation’s Joint Ventures in Venezuela.”
Group Members were therefore “strongly advised” to conclude all carriage of Venezuelan oil cargoes by May 31st 2024.
The IG also noted that on January 29th 2024 OFAC issued General License 43A. which allowed for a wind-down until February 13th 2024 of transactions involving CVG Compania General de Mineria de Venezuela CA (Minerven) (and entities of which it owns it owns 50% or more), which were previously authorised by General License 43. After February 13th it was no longer permitted to engage in any transactions with Minerven.
The IG said that cover was unavailable for trade that breaches applicable sanctions. Members were recommended “to exercise the highest caution when considering shipments to/from Venezuela, when dealing with Venezuelan /individuals, and most importantly, when lifting Venezuelan origin cargoes”.
Members should conduct their own enhanced due diligence investigations to avoid any element of illegality (i.e., prohibited cargoes, /or prohibited activities, /or SDNs) in their fixtures, the IG said.
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