Continued Calibration In Venezuela Sanctions: New OFAC Licenses Expand Access While Tightening Execution Controls

A More Functional Opening, Not a Fundamental Shift

U.S. sanctions on Venezuela continue to evolve in measured steps. Since our last alert, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) has issued a new set of general licenses and related guidance that further refine how U.S. companies may engage with the Venezuelan market. These actions build on OFAC’s earlier recalibration by authorizing broader use of contingent contracting with the Government of Venezuela and opening limited financial services channels involving key Venezuelan banks, while keeping the core restrictions firmly in place.

For companies considering opportunities in Venezuela, these developments create additional room to act — but not a clear path to full operations. OFAC’s recent measures continue to emphasize that progress will occur in stages. What matters now is not just what activity is allowed, but how companies structure transactions, select counterparties, and handle payments. As a practical matter, success under these licenses will depend on careful planning, disciplined execution, and close attention to how deals are negotiated and carried out from the outset.

GL 56: Expanding Contingent Contracting with the Government of Venezuela

On April 14, 2026, OFAC issued General License 56 (“GL 56”), authorizing transactions ordinarily incident and necessary to the negotiation of contingent commercial contracts with the Government of Venezuela, provided that any entry into or performance of those contracts remains expressly subject to further OFAC authorization.

Building on prior licenses, GL 56 expands “ordinary and necessary” activity by authorizing companies to engage in the full range of contingent contracting steps with the Government of Venezuela — including bids, proposals, and preliminary agreements — beyond the sector-specific limits of earlier general licenses, while continuing to prohibit contract performance absent further OFAC authorization.

GL 56 also embeds familiar restrictions. It excludes debt-related transactions, prohibits non-commercial payment structures such as gold or digital currency issued by, for, or on behalf of the Government of Venezuela, and bars dealings involving Specially Designated Nationals and Blocked Persons (“SDNs”) and certain foreign counterparties. These limits reinforce that companies must structure contracts in a manner consistent with likely OFAC conditions from the outset.

GL 57: Opening Limited Financial Pathways

Issued the same day, General License 57 (“GL 57”) authorizes “ordinary and necessary” financial services — such as payments, transfers, and account activity — involving Banco Central de Venezuela, Banco de Venezuela, Banco Digital de los Trabajadores, and Banco del Tesoro, and their majority owned entities, while not authorizing the unblocking of any blocked property or any other transactions otherwise prohibited by the Venezuela Sanctions Regulations, and permitting U.S. financial institutions to rely on originator or beneficiary representations for compliance so long as they do not know or have reason to know that a transaction is not authorized by GL 57.

Clarifying Reporting Obligations Under Existing Licenses

OFAC also used recent guidance to address a practical compliance question arising from earlier Venezuela-related licenses. In FAQ 1248, issued on April 14, 2026, OFAC clarified which parties bear responsibility for reporting requirements under licenses such as GL 48A and GL 50A.

The agency confirmed that reporting obligations fall on the parties engaged in the primary authorized activity, rather than on ancillary service providers. For example, a company directly performing authorized operations in Venezuela must submit the required reports, while a financial institution processing payments related to that activity does not. The same distinction applies under GL 50A, where the companies listed in the license annex are responsible for reporting their authorized activities, but supporting entities are not.

This guidance answers a previously open question by assigning reporting obligations under licenses such as GL 48A and GL 50A to parties directly performing the authorized activity, not to financial institutions or other service providers that facilitate those transactions.

GL 5W: Continued Delay of PdVSA 2020 Bond Enforcement

OFAC also addressed long-running restrictions tied to the PdVSA 2020 8.5% bond through General License 5W (“GL 5W”), issued on May 4, 2026. The license authorizes transactions relating to the bond — but only on or after June 19, 2026, continuing OFAC’s practice of deferring when bondholders may act on their rights.

GL 5W replaces GL 5V and extends the effective date of authorization, continuing the prohibition on transactions tied to the bond — including actions that could result in the transfer of pledged collateral — until June 19, 2026. As OFAC has clarified in related guidance, no authorization is in effect prior to that date for bondholders to pursue enforcement or similar remedies.

This repeated extension is not procedural — it reflects a deliberate policy choice. By controlling the timing of authorization, OFAC preserves leverage over a highly sensitive asset while preventing unilateral creditor action that could disrupt broader diplomatic or restructuring efforts.

OFAC Confirms Continued Restrictions on CITGO-Related Enforcement

OFAC further clarified the scope and effect of GL 5W in FAQ 595, confirming that the license continues a long-standing policy of delaying enforcement activity tied to the PdVSA 2020 bond and its CITGO collateral.

The guidance explains that, although earlier versions of the license removed certain legal barriers to bondholder enforcement, OFAC has repeatedly delayed when that authorization becomes effective. Under the current framework, no authorization is in place prior to June 19, 2026 that would permit transactions involving the sale or transfer of CITGO shares securing the bond, absent a specific license.

At the same time, OFAC signals some flexibility. The agency notes that it would take a favorable view toward licensing requests tied to potential restructuring or refinancing arrangements involving the bond, indicating a willingness to consider negotiated solutions rather than immediate enforcement actions.

GL 58: Authorizing Advisory Work While Deferring Debt Restructuring

OFAC also addressed potential sovereign and PdVSA-related debt issues through General License 58 (“GL 58”), issued on May 5, 2026. The license authorizes the provision of legal, financial advisory, and consulting services to the Government of Venezuela and PdVSA entities in connection with potential debt restructuring.

The scope of authorized activity is limited to preparatory work. Companies may assess restructuring options, develop proposals, and prepare related materials, but may not engage in actual restructuring, settlement, or direct negotiations with creditors. GL 58 also maintains standard restrictions, including prohibitions on non-commercial payment terms, dealings with SDNs or certain foreign counterparties, and any unblocking of property. In addition, parties providing services must submit their contracts to U.S. government agencies within a specified timeframe.

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