Venezuela Oil Sector Sanctions Update: Analyzing OFAC General License 46

After weeks of anticipation, the Office of Foreign Assets Control is authorizing certain transactions involving Venezuelan-origin oil by “established US entities.” Likely not the broad sanctions relief the Venezuelan government was hoping for, this newly issued general license allows for the sale and transport of Venezuelan oil, with the US government retaining control over all funds payable to the Government of Venezuela.

OVERVIEW OF GENERAL LICENSE 46

On January 29, 2026, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License No. 46 (GL 46), Authorizing Certain Activities Involving Venezuelan-Origin Oil, which authorizes “all transactions prohibited by the Venezuela-Sanctions Regulations…that are ordinarily incident and necessary to the lifting, exportation, reexportation, sale, resale, supply, storage, marketing, purchase, delivery, or transportation of Venezuelan-origin oil, including the refining of such oil, by an established U.S. entity.” (emphasis added)

Unlike certain other general licenses that may broadly protect both US and non-US persons from sanctions risk for covered activities, [1] GL 46 speaks only to “established US entities,” defined to mean any entity organized under the laws of the United States or any jurisdiction within the United States on or before January 29, 2026. However, such an entity cannot be owned or controlled, directly or indirectly, by or in a joint venture with a person located in or organized under the laws of the People’s Republic of China. Additionally, the entity cannot be owned or controlled, directly or indirectly, by a person located in or organized under the laws of the Russian Federation, the Islamic Republic of Iran, the Democratic Peoples’ Republic of Korea, or the Republic of Cuba.

Where nearly all petroleum-related transactions in Venezuela involve state-owned entities, this authorization applies where the Government of Venezuela (GoV) and Petróleos de Venezuela, S.A. (PdVSA) and its subsidiaries (collectively PdVSA Entities) are involved, including where monies are owed to such parties; provided, however, that any such payment to them or any other blocked person is made into a Foreign Government Deposit Fund or any other account as instructed by the Department of Treasury, as discussed further below. However, contracts for authorized transactions with PdVSA Entities must be governed by the laws of the United States and require that any dispute resolution that arrives thereunder occurs within the United States.

Typically issued separately through Frequently Asked Questions published on its website, here OFAC included in the text of the general license examples of authorized activities: namely, arranging shipping and logistics services, including chartering vessels; obtaining marine insurance and protection and indemnity (P&I) coverage; and arranging port and terminal services, including with port authorities or terminal operators that are part of the GoV.

The license also authorizes commercially reasonable payments in the form of swaps of crude, diluents, and refined petroleum products, but explicitly does not authorize payment terms that are not commercially reasonable, involve debt swaps or payments in gold, or are denominated in any digital currency, coin, or token issued by, for, or on behalf of the GoV.

In normal fashion, the license contains a number of other conditions/limitations on authorized activities. GL 46 does not authorize:

• Any transaction involving a person located in or organized under the laws of the Russian Federation, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, the Republic of Cuba, or any entity that is owned or controlled, directly or indirectly, by or in a joint venture with such persons;
• Any transaction involving an entity located in or organized under the laws of Venezuela or the United States that is owned or controlled, directly or indirectly, by or in a joint venture with a person located in or organized under the laws of the People’s Republic of China;
• The unblocking of any blocked property; or
• Any transaction involving a blocked vessel.

FOREIGN GOVERNMENT DEPOSIT FUNDS

On January 9, 2026, six days after the United States captured Nicolas Maduro, President Trump issued Executive Order 14373, Safeguarding Venezuelan Oil Revenue for the Good of the American and Venezuelan People (EO 14373). Through this executive order, the President determined that the threat of attachment or the imposition of judicial processes against Venezuelan oil-related funds held in US Treasury accounts would interfere with US efforts to ensure economic and political stability in Venezuela.

This concern is carried through in the implementation of GL 46, which requires that payments to the GoV pursuant to GL 46’s authorization be made into “Foreign Government Deposit Funds,” as defined in EO 14373. Such funds include:

funds paid to or held by the United States Government in designated United States Department of the Treasury accounts or funds on behalf of the Government of Venezuela or its agencies or instrumentalities, including the Central Bank of Venezuela and Petroleos de Venezuela, S.A., that are derived from either the sale of natural resources from, or the sale of diluents to, the Government of Venezuela or its agencies or instrumentalities.

Prioritizing US foreign policy over potential creditors, EO 14373 then prohibits and nullifies any unlicensed or otherwise authorized attachment, judgement decree, lien, or other judicial process with respect to the Foreign Government Deposit Funds. In practical terms, this protects the revenues from creditors, including bond holders and holders of judgements and arbitral awards against the GoV.

REPORTING REQUIREMENTS

Staying within the theme of retaining maximum control over Venezuelan oil sales, the license contains a requirement to provide certain information to the US Department of State and the US Department of Energy where exports, reexports, sales, or resales are made to countries other than the United States. The information is due within days of the first transaction and includes, among other things, details as to the taxes, fees, or other payments provided to the GoV.

TAKEAWAYS

Established US entities relying on GL 46 should be mindful of several things in pursuing transactions within authorizations of GL 46.

First, as noted above, GL 46 expressly does not authorize transactions involving entities in Venezuela or the United States that are owned or controlled by or in a joint venture with a person in or organized under certain specified countries of concern. Because of this prohibition, persons relying on GL 46 must conduct enhanced diligence to verify ownership and control of entities involved.

Additionally, the general license does not currently have an expiration date. However, as with all general licenses, OFAC reserves the right to revoke or amend GL 46 at any time. To that end, the longevity of this general license depends on the actions of the GoV. Recall that an earlier OFAC general license (General License 44), predicated on the GoV allowing free elections, was revoked by OFAC in 2024 after the US government determined that the GoV failed to meet its commitments to restore democracy and competitive elections.

Similarly, whether OFAC GL 46 expands GL 46 to provide additional sanctions relief will depend on the actions of the GoV implementing any United States requirements. Under the terms of the general license, the US government retains control of the funds and may release or withhold them based on the GoV’s response to future US determinations. Parties relying on the general license should be mindful of the fact that the sanctions landscape can change with little notice. As such, they should ensure proper contractual documentation and thorough recordkeeping.

Finally, how GL 46 interplays with the Trump administration’s plans for Cuba also remains to seen. On the same day that OFAC issued GL 46, President Trump signed an executive order declaring a national emergency and establishing a process to impose tariffs on countries that provide oil to Cuba. [2] Venezuela, together with Mexico, was a leading supplier of oil to Cuba.

The US government has now cut off the Venezuelan supply to Cuba and has taken actions to encourage Mexico to do the same. This action may lead to a bilateral Mexico–US trade issue because official Mexican policy favors trade with Cuba and the Mexican government has invoked its blocking statute on compliance with the US embargo of Cuba. The impact of this action will likely play out in the coming weeks, so parties should stay tuned for how it could impact their dealings across these jurisdictions.

STAY INFORMED

Our team continues to closely monitor developments related to Venezuela. Visit our Venezuela Global Capabilities page for an overview of how we advise clients on Venezuela-related legal, regulatory, and risk considerations, and for ongoing updates and related insights.

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