Prohibiting Certain Additional Transactions With Respect to Venezuela

May 24, 2018

Summary

Stops U.S. people and companies from doing certain money deals with the government of Venezuela, like buying its debt or selling its property.

What problem does this solve?

The Venezuelan government under the Maduro regime is corrupt, undemocratic, and causing a humanitarian crisis. This order prevents the regime from raising money by selling off government debt and assets to U.S. persons.

What does this order do?

Prohibits purchasing debt from the Venezuelan government

Forbids any U.S. person or entity from buying any debt owed to the Government of Venezuela, including accounts receivable.

Bans dealings in Venezuelan government assets

Prohibits the sale, transfer, or use as collateral by the Venezuelan government of any ownership stake in an entity where it holds 50% or more ownership.

Forbids using Venezuelan debt as collateral

Bans any transaction involving debt owed to the Venezuelan government that is pledged as collateral after the order's effective date.

Defines 'Government of Venezuela' broadly

Includes the government, its agencies, the Central Bank of Venezuela, and the state-owned oil company Petroleos de Venezuela, S.A. (PdVSA) in the definition of the sanctioned body.

Prohibits attempts to evade sanctions

Forbids any transaction or conspiracy that tries to avoid, or causes a violation of, the prohibitions set forth in the order.

Who does this affect?

Government of Venezuela
U.S. financial institutions
U.S. persons or companies doing business with Venezuela

What is the real world impact?

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Applies economic pressure on the Maduro regime

Restricts the Venezuelan government's ability to get cash by selling assets or debt. This action aims to pressure the regime to change its behavior regarding democratic processes and human rights.

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Prevents U.S. involvement in propping up a corrupt government

Stops U.S. individuals and companies from participating in financial transactions that could benefit a government accused of corruption, economic mismanagement, and repression of its people.

When does this start?

This order became effective at 12:30 p.m. eastern daylight time on May 21, 2018.