U.S. steps up pressure on Venezuela with further sanction measures
On Monday 5 August, 2019, President Trump issued Executive Order 13884, effectively blocking the assets of the Government of Venezuela in the United States or in the possession and control of any United States person.
In their latest Client Alert, Freehill Hogan & Mahar LLP go on to clarify that any United States persons are essentially prohibited from engaging in any transactions with the Government of Venezuela, its agencies, or any entity that government owns or controls.
In addition, non-U.S. persons may have their assets in the United States blocked if they are determined to have “materially assisted” or supplied goods or services in support of the Government of Venezuela, its agencies and any entity in which it holds a 50% or greater interest. This includes PdVSA.
There is uncertainty as to what constitutes as “material assistance” in this case (food, medicine and clothing continue to be exempt). It is worth noting that the EO is designed to be as forceful as possible towards the Venezuelan Government, therefore “material assistance” may be interpreted by the U.S. aggressively and expose shipowners to sanctions accordingly.
In light of the above, Members who consider trade that involves the Government of Venezuela, its agencies and any entity in which it holds a 50% or greater interest, including PdVSA, are advised by the Club to read the attached client alert, as well as the U.S Executive Order and carefully evaluate the risk of doing so.
The Executive Order is available to view. If Members have any questions regarding the above development, they should get in touch with their usual Club contact.