FCPAméricas Blog
The United States Sanctions Venezuela (and the sanctions are expected to broaden)
3.17.2015
The following guest post is from Timothy O’Toole, a Member of Miller & Chevalier who focuses on sanctions, export controls, and other international regulatory and compliance issues.
Two weeks ago, the Venezuelan government took action directed toward the United States, expelling most U.S. Diplomats from the country and requiring Americans to get visas to enter Venezuela. In response, on March 7, 2015, President Obama entered an executive order that blocked the property of seven high level Venezuelan officials, and suspended their ability to enter into the United States. The Executive Order contains a finding by the President that the current Venezuelan government has eroded human rights guarantees, persecuted political opponents, curtailed press freedoms, used violence and violated the human rights of protestors, and engaged in “significant public corruption.”
Based on these findings, the President not only imposed sanctions against the same named individuals – the blocking of assets and restriction of travel – but empowered the US Secretary of the Treasury, in consultation with the US Secretary of State, to impose similar sanctions against any individual whom it determined was responsible for or complicit in, or responsible for ordering, controlling, or otherwise directing, or to have participated in, directly or indirectly, actions undermining democratic institutions, penalties against free expression, serious human rights violations “including against persons involved in antigovernment protests in Venezuela in or since February 2014;” and or high-level public corruption.
The new executive order also permits the imposition of sanctions against any person that the Secretary of the Treasury determines to be a leader of a group that engaged in the sort of actions described above and against any person who has provided material support, directly or indirectly, to a sanctioned person or to anyone engaging the activities described in the order (undermining democratic processes, engaging in acts of violence against protestors, impeding free expression and engaging in significant public corruption).
The seven individuals named in the initial Executive Order include Gustavo Enrique González López, the director general of Venezuela’s national intelligence service, and the head of Venezuela’s Bolivarian National Police, Manuel Eduardo Pérez Urdaneta. The White House’s list also includes prosecutor Katherine Nayarith Haringhton Padron, who is accused of charging members of Venezuela’s opposition with implausible and/or fabricated crimes.
It is likely that this list will grow in coming weeks, as the Treasury Department through the Office of Foreign Asset Control (OFAC) begins a review of other individuals who qualify. In addition, it is likely that OFAC will provide more guidance on the scope of the sanctions, since the Executive Order empowers the Treasury Department, in consultation with the State Department, to draft regulations to enforce these sanctions.
For companies doing business in Venezuela, there are a couple of takeaways. First, companies must carefully review these sanctions in light of their business in Venezuela to ensure they are not engaging in improper transactions with sanctioned individuals. Second, companies doing business in Venezuela should begin to carefully monitor further actions on this issue by the US Department of the Treasury because, as the sanctions order makes clear, this is just the first step of what will likely be a growing Venezuelan sanctions regime.
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