Sanctions On Venezuela Ease, But Legal Risk And Cross-border Complexity Persist

On January 29, 2026, the US Department of the Treasury's Office of Foreign Assets Control (OFAC) initiated a notable, but carefully tailored, easing of US sanctions targeting Venezuela's oil sector. First, OFAC issued Venezuela-related General License 46, later amended on February 10, 2026 (GL 46A), authorizing certain otherwise-prohibited transactions involving Venezuelan-origin oil by qualifying US entities. Along with amended GL 46A, OFAC also issued General License 48 (GL 48), authorizing the supply of certain items to Venezuela; and General License 30B (GL 30B), authorizing activities that are necessary for the operation of Venezuelan ports and airports. Second, on February 13, 2026, OFAC broadened its authorizations related to the Venezuelan oil sector by issuing General License 49 (GL 49), authorizing US persons to negotiate and enter into contingent contracts for certain investments in Venezuela; and General License 50, later amended on February 18, 2026 (GL 50A), authorizing transactions with specified entities that relate to oil- or gas-sector operations in Venezuela.

In Depth

While these new Venezuela-related general licenses (collectively, the general licenses) expand permissible activity for a limited category of US persons, their scope is narrow, highly conditioned, and subject to extensive reporting and compliance obligations. The general licenses follow a series of OFAC actions in recent years permitting limited engagement with Venezuela through specific licenses and short-term general licenses. Unlike some prior authorizations, the general licenses are not expressly tied to political benchmarks but remain subject to amendment or revocation at OFAC's discretion. Moreover, the general licenses do not affect the application of non-US sanctions regimes, creating additional legal and operational complexity for multinational companies operating across jurisdictions.

The general licenses and their impact on US persons

US sanctions generally prohibit US persons from engaging in transactions involving the government of Venezuela and its political subdivisions, agencies, or instrumentalities, including the state-owned oil company Petróleos de Venezuela, S.A. (PdVSA), absent authorization from OFAC. These prohibitions remain largely intact notwithstanding the general licenses, which operate as a targeted authorization of certain activities rather than a broad rollback of the Venezuela sanctions framework.

GL 46A

Under GL 46A, US persons are authorized to engage in activities that would otherwise be prohibited under US sanctions (including engaging with the government of Venezuela and PdVSA) in connection with the purchase of Venezuelan oil. Similarly, transactions that are ordinarily incident and necessary to lifting (i.e., loading and removal of oil from a terminal, storage facility, or production site for delivery to a buyer), exportation, re-exportation, sale, resale, supply, storage, marketing, purchase, delivery, or transportation of Venezuelan-origin oil, including the refining of such oil, also are authorized. This authorization extends to, among other activities:

• Engaging in commercial, legal, and technical discussions relating to the purchase of Venezuelan-origin oil
• Conducting site surveys
• Arranging logistics
• Conducting downstream activities such as refining and resale of Venezuela-origin oil
• Coordinating payment structures
• Maintaining pipelines, storage, or port infrastructure
• Financing of related cargos and receivables.

The authorizations under GL 46A are only available to “established US entities,” defined as entities organized under US law on or before January 29, 2025. It also is important to note that GL 46A expressly does not authorize the following:

• Transactions involving exploration or production activities, including geological surveys, drilling wells, or oil extraction in Venezuela, or investments related to the development or operation of oil fields (note that such transactions may fall under the authorizations provided in other general licenses).
• The unblocking of any blocked property, including PdVSA assets.
• Transactions involving blocked vessels.
• Transactions involving entities located in, organized under the laws of, or owned or controlled by persons in Russia, Iran, North Korea, or Cuba, including joint ventures with such persons.
• Transactions involving Venezuelan or US entities owned or controlled by, or in a joint venture with, persons organized or located in the People's Republic of China.
• Payment structures that are not commercially reasonable, or that involve debt swaps, payments in gold, or payments denominated in digital currency, digital coins, or digital tokens issued by or on behalf of the government of Venezuela.

Transactions conducted pursuant to GL 46A are subject to the following conditions:

• Any contract with the government of Venezuela, PdVSA, or PdVSA-controlled entities must be governed by US law, and disputes must be resolved in the United States.
• Monetary payments to blocked persons, such as the government of Venezuela and PdVSA, must be made into foreign government deposit funds or other accounts specifically designated by the Treasury (excluding payments for local taxes, permits, or fees), and payment terms must be commercially reasonable.
• Any person exporting, reexporting, selling, reselling, or supplying Venezuelan-origin oil to destinations outside the US must submit a detailed report to the US Departments of State and Energy within 10 days of executing the first covered transaction and every 90 days thereafter while such transactions continue.

Failure to satisfy these conditions, or engagement in any unauthorized transaction, may result in the loss of authorization and potential enforcement action.

GL 48 and GL 30B

OFAC's other general licenses introduced on February 10 similarly aim to broaden the scope of authorized commercial activity in Venezuela. GL 48 allows US persons to conduct certain otherwise-prohibited transactions to provide goods, technology, software, or services for the exploration, development, or production of oil or gas. This includes processing payments, arranging shipping and logistics services (including chartering vessels), obtaining marine insurance and protection and indemnity coverage, and arranging port and terminal services (including with port authorities or terminal operators that are part of the government of Venezuela). GL 30B supersedes GL 30A, removing the prohibition on transactions that are ordinarily incident and necessary to the operation or use of ports and airports.

GL 49 and GL 50A

OFAC's general licenses introduced on February 13 aim to further broaden the scope of authorized activity in the Venezuelan oil sector. GL 49 authorizes otherwise-prohibited transactions that are related to the negotiation of and entry into contingent contracts for investments in oil- or gas-sector operations in Venezuela (provided that the performance of any such contract is made expressly contingent upon separate authorization from OFAC) – activities that the earlier general licenses did not expressly cover. GL 50A similarly authorizes otherwise-prohibited transactions related to oil- or gas-sector operations in Venezuela, but only applies to a handful of specified entities and their subsidiaries (BP PLC, Chevron Corporation, Eni S.p.A., Repsol S.A., and Shell PLC), but GL 50A does not require further OFAC authorization to complete such transactions, provided that any contract for such transactions specifies that it is subject to the laws of the US and any dispute resolution occurs in the US, and that any related monetary payments to blocked persons, such as the government of Venezuela and PdVSA, must be made into foreign government deposit funds or other accounts specifically designated by the Treasury. Although earlier general licenses authorized oil transactions and related support activities, GL 50A expressly authorizes ongoing oil- and gas-sector operations in Venezuela for the specified entities, providing greater certainty for operational activities.

The continued role of specific licenses

Companies should avoid operating on the assumption that simply because a general license is now in force, the need for specific licenses falls away. While the general licenses provide an immediately available authorization for certain oil-related activities, the range of activities they permit is limited. For companies looking to undertake a broader range of activities, it may still be prudent to submit an application to OFAC for a specific license. Similarly, for companies that need more legal certainty to give the green light for business in Venezuela, a specific license is likely to provide the necessary certainty for long-term planning, given they are typically issued for a defined term.

Ultimately, the decision to rely on the general licenses or to pursue a specific license will depend on a factual analysis of the company's risk profile, business objectives with respect to Venezuela, and the anticipated duration and complexity of Venezuela-related activities.

Cross-border considerations

While the general licenses only authorize activities conducted by certain US persons, based on prior guidance from OFAC in other sanctions regimes, non-US persons are unlikely to face exposure under US “secondary” sanctions for engaging in activities authorized by the general licenses for US persons. The United Kingdom and the European Union also apply targeted sanctions regimes with respect to Venezuela. Financial sanctions and asset freezes only reach designated persons who, at the time of this alert, do not include the Venezuelan government at large, PdVSA, or any other state entities (aside from the Venezuelan military). Trade sanctions and export controls are broadly limited to dual-use goods. Several members of the Venezuelan government are designated persons in both the UK and EU, though there is growing suggestion in the EU of removing certain of these designations – such as the recent proposal from EU High Representative for Foreign Affairs Kaja Kalla to lift sanctions on Delcy Rodríguez, Venezuela's interim president.

The targeted nature of the sanctions means that strong systems and controls are essential. Rigorous, regular screening is required of all counterparties and their ultimate beneficial owners with a nexus to any Venezuelan business to minimize the risk of being caught out by changing sanctions frameworks. Where goods are being moved into Venezuela as part of any deal (regardless of whether they leave from the UK or EU), a comprehensive understanding of the goods and their intended uses is critical.

Regulated firms should expect their systems and controls to be tested by regulators. Methodologies for their approaches to sanctions screening and compliance must be explainable and defensible, particularly as operations in Venezuela are likely to attract additional scrutiny given the increased activity and uncertain risk profile of the jurisdiction.

Key takeaways

The general licenses offer limited, highly conditioned relief for certain oil-related transactions involving Venezuela while leaving the broader US and global sanctions framework largely unchanged. For certain firms, the general licenses open up a new market for their key activities, however a specific license may still be either necessary or prudent for some US firms to ensure that they have the appropriate authorization for the full range of commercial activities necessary to do business in Venezuela and provide a higher level of legal certainty.

For firms with a UK and EU nexus, regulators are aware of the increased sanctions risk and will no doubt increase scrutiny of firms seeking to engage in Venezuela-related activities. While oil-related activities are not prohibited under UK and EU sanctions, regulators will expect suitable systems and controls to be in place to properly manage the sanctions-related risk from the jurisdiction, and, importantly, regulators will expect that these controls will be regularly tested and will seek to test them themselves.

Taken as a whole, while there appears to be a clear shift toward the “opening up” of Venezuela, legal and regulatory complexity remains such that companies must exercise caution when entering the market or dealing with counterparties in the space.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.