OFAC issues clarification on Venezuela debt
For debt created on or after 25 August 2017 (‘new debt’), US persons are not permitted to accept payment from PdVSA ‘or other segments of the Government of Venezuela if payment for a debt is not received within the applicable period specified in E.O. 13808’ – i.e., 90 days for PdVSA, 30 days for other segments of the Government of Venezuela) – in the absence of a specific OFAC licence.
So explains an FAQ recently published by the US Treasury’s Office of Foreign Assets Control (‘OFAC’), which adds that ‘because receiving payments outside of these specified maturity periods generally constitutes a prohibited dealing in debt, U.S. persons should ensure that payment terms accord with the applicable debt prohibition.’
It says: ‘If, however, PdVSA or another segment of the Government of Venezuela fails to pay a debt in full within 90 or 30 days, as applicable, U.S. persons must obtain a specific license from OFAC before accepting payment after the expiration of the applicable period.’
The FAQ adds that ‘OFAC will, on a case-by-case basis, grant specific licenses to U.S. persons to deal in the collection or receipt of such payment, provided that:
- PdVSA or another segment of the Government of Venezuela is in debt to the applicant based on an agreement that complies with applicable sanctions requirements and prohibitions;
- the debt is “new debt” created before March 14, 2018;
- the relevant segment of the Government of Venezuela failed to pay its debt within the agreed-upon, authorized payment period; and
- the transaction is not otherwise prohibited under E.O. 13808, E.O. 13692, or any part of 31 C.F.R. Chapter V.’
See:
https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180212.aspx
