As the United States continues its “maximum pressure” campaign on the Maduro regime in Venezuela, the US Department of Treasury’s Office of Foreign Assets Control (“OFAC”) has added 32 additional individuals, entities, and vessels to the Specially Designated Nationals (“SDN”) and Blocked Person List, from June to September 2020. The campaign is designed to cut off sources of revenue and support for the regime.
The designations targeted individuals with political connections to the Maduro regime, as well as individuals, entities, and vessels that—in the US government’s view—assisted the Maduro regime in transporting Venezuela crude oil as part of oil “swap” transactions. For example:
- On June 2 and 18, 2020, OFAC designated three individuals, twelve entities, and six vessels, under presidential Executive Order (“EO”) 13850. EO 13850 generally authorizes sanctions on individuals and entities that are determined to “operate” in the oil sector of Venezuela. Moreover, some of these individuals, entities, and vessels were designated for participating in a “network attempting to evade” sanctions under the order, “to broker the re-sale of over 30 million barrels of Venezuelan-origin crude oil” to benefit the Maduro regime. The June designations follow the issuance of new guidance concerning sanctions evasion practices in the shipping industry (see our previous coverage here).
- On July 23, 2020, OFAC designated brothers Santiago Jose Moron Hernandez and Ricardo Jose Moron Hernandez “for their sustained support of corruption” by the Maduro regime.
- On September 4, 2020, OFAC designated four “key figures”—David Eugenio De Lima Salas, Reinaldo Enrique Muñoz Pedroza, Indira Maira Alfonzo Izaguirre, and Jose Luis Gutierrez Parra—that, according to Treasury, participated in a “broader election interference scheme to prevent free and fair parliamentary elections from taking place in December 2020 by restructuring the National Electoral Council and controlling the state’s wealth and assets for regime purposes through the Solicitor General.” These designations were made under EO 13629, which authorizes sanctions for, among other things, “undermin[ing] democratic processes or institutions” in Venezuela.
- On September 4, 2020, OFAC designated five individuals under EO 13629, who, according to US Secretary of State Michael Pompeo, are “leading puppet opposition parties in the electoral charade planned for December .”
The designations follow comments by Elliot Abrams, the US Department of State (“State Department”)’s special representative for Venezuela, that “sanctions have been extremely effective in reducing income to the [Maduro] regime” and that the State Department would be “doing some things to tighten up in the near future.” The increasing frequency of designations this summer may also suggest that the United States will continue to escalate its pressure campaign through additional designations.
Moreover, although some of the designations focused on persons that, in the US government’s view, are associated with the Maduro regime, the designations of individuals, entities, and vessels engaged in Venezuela oil trade make clear that other individuals and entities operating in Venezuela should continue to carefully monitor their US sanctions positions.