During the month of May while President Donald Trump’s escalating trade war with China was garnering most of the headlines, the Trump administration also continued to apply economic pressure on Venezuela. In May, the Departments of Commerce, State and the Treasury further tightened sanctions and export restrictions on Venezuela.
On May 10, 2019, the Department of State announced that, pursuant to Executive Order 13850, the United States determined persons operating in the defense and security sector of the Venezuelan economy may be subject to economic sanctions. On the same date, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned two companies that operate in the oil sector of the Venezuelan economy, and also sanctioned two vessels, which transported oil from Venezuela to Cuba:
- Monsoon Navigation Corporation is based in Majuro, Marshall Islands, and is the registered owner of the vessel, Ocean Elegance.
- Ocean Elegance is a crude oil tanker (IMO: 9038749) that delivered crude oil from Venezuela to Cuba from late 2018 through March 2019.
- Serenity Maritime Limited is based in Monrovia, Liberia, and is the registered owner of the vessel, Leon Dias.
- Leon Dias is a chemical and oil tanker (IMO: 9396385) that delivered crude oil from Venezuela to Cuba from late 2018 through March 2019.
As a result of this action, these entities and vessels have been placed on OFAC’s Specially Designated Nationals (SDN) List and all property and interests in property of these entities, and of any entities that are owned, directly or indirectly, 50 percent or more by the two entities, that are in the United States or in the possession or control of U.S. persons, are blocked and must be reported to OFAC. Also, OFAC’s regulations generally prohibit all dealings by U.S. persons with entities and persons placed on the SDN List.
On May 7, OFAC actually removed sanctions imposed on Manuel Ricardo Cristopher Figuera (Cristopher), who turned against the Maduro regime. Cristopher was the former director general of Venezuela’s National Intelligence Service, more commonly known as SEBIN. This action was viewed as an effort by the Trump administration to encourage other officials in the Maduro regime to oppose Nicolas Maduro Moros and recognize Juan Guaidó as the legitimate president of Venezuela.
On May 24, 2019, the Department of Commerce’s Bureau of Industry and Security (BIS) amended the Export Administration Regulations (EAR) to remove Venezuela from Country Group B (a country group offering more favorable treatment for certain exports) and place it into Country Group D:1 (which lists countries of national security concern). BIS also added Venezuela to Country Groups D:2-4, which cover countries of concern for nuclear, chemical and biological weapons, and missile technology purposes. BIS stated that this change reflects “current national security concerns related to Venezuela, e.g., the introduction of foreign military personnel and equipment into Venezuela, and to better protect U.S. national security.” The changes in this final rule also better align the Country Group designations for Venezuela with other EAR national security-related provisions that already apply to Venezuela, e.g., the military end-use and end-user controls that apply to certain items for export, reexport or transfer (in-country) and provisions that are specific to countries subject to U.S. arms embargoes. These changes will make exports and reexports to Venezuela under the EAR ineligible for certain license exceptions and increases the potential for the imposition of conditions on any export license granted for Venezuela entities or license denials.