ANALYSIS
Washington updates Venezuelan licenses to boost energy sector and secure commodities market
The licenses also allow companies to supply goods, services, and technology to support Venezuela's electricity and petrochemical sectors, expanding on previous permits that focused primarily on oil and gas.
Treasury Dept.
The United States on Friday expanded sanctions waivers related to Venezuela by updating several licenses issued by the Treasury Department. This move allows for increased investment and activity in the South American country's energy and petrochemical sectors and enables the export of fertilizers to the U.S. market. In a statement, the Treasury said the Trump administration is fulfilling the president's promise to help restore Venezuela's economy in the interest of both the American and Venezuelan people.
The Office of Foreign Assets Control (OFAC) reported that it updated several licenses related to Venezuela with the goal of supporting the revitalization of the country's energy sector and contributing to keeping the global market for raw materials well-supplied.
The Treasury issued three updated general licenses expanding the permitted activities for U.S. companies and entities. The authorized transactions include the purchase of Venezuelan petrochemical products for import into the United States, in addition to oil-related transactions.
According to the statement, the new authorizations allow for expanded investment in the Venezuelan energy industry and enable the direct export of fertilizers to the United States to support U.S. farmers.
Investments in electricity and petrochemicals
The licenses also allow companies to supply goods, services and technology intended to support Venezuela's electricity and petrochemical sectors, expanding previous permits that focused primarily on oil and gas.
Authorized activities include projects related to electricity generation, transmission and distribution, which are considered essential to increase the country's oil production after years of underinvestment.
In addition, companies will be able to negotiate conditional contracts for new investments in the Venezuelan electricity and petrochemical industries, although any final agreement must receive specific authorization from OFAC.
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Adjustments to the sanctions regime
However, transactions involving Russia, Iran, North Korea, China or Cuba continue to be prohibited.
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