OFAC Revises The Venezuela Playbook: New Telecommunications Licenses, Relief Clarifications, And Continued CITGO Restrictions

Continued Developments in OFAC-Venezuela Sanctions

Since our last alert, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) has continued to refine the Venezuela sanctions program through targeted licensing actions and related guidance. Recent developments expand authorizations related to Venezuela’s telecommunications sector, clarify the scope of earthquake-relief activities authorized under General License 60, and further delay enforcement activity involving the PdVSA 2020 bond and its CITGO collateral.

FAQ 1263: OFAC Clarifies Payment Processing for GL 60 Earthquake Relief Activities

On June 25, 2026, OFAC issued FAQ 1263, clarifying that payments to the Government of Venezuela that are authorized under General License 60 (“GL 60”), including taxes, tolls, and government fees related to earthquake relief efforts, do not need to be deposited into the Foreign Government Deposit Funds Account (“FGDF”).

At the same time, OFAC emphasized that this exception applies only to transactions authorized by GL 60. Activities authorized under other Venezuela-related general licenses that require FGDF payments remain subject to those requirements and may not be recharacterized as earthquake relief efforts to avoid compliance. This clarification further supports OFAC’s effort to facilitate humanitarian assistance while maintaining controls on other authorized dealings with the Government of Venezuela.

GL 5Y: OFAC Again Extends the PdVSA 2020 Bond Enforcement Timeline

On August 3, 2026, OFAC issued General License 5Y (“GL 5Y”), replacing and superseding GL 5X. Like its predecessors, GL 5Y authorizes transactions related to the PdVSA 2020 8.5% bond, but beginning only on September 17, 2026, extending the prior authorization date by approximately six weeks.

In updated FAQ 595, OFAC reiterated that, until September 17, 2026, there remains no effective authorization permitting transactions involving the sale or transfer of the CITGO shares pledged as collateral for the bond, absent specific authorization from OFAC. OFAC further noted that it would maintain a favorable licensing policy toward applications supporting a restructuring or refinancing of the PdVSA 2020 bond. By once again delaying the authorization date, OFAC continues to control the timing of potential enforcement activity while preserving the possibility of a negotiated resolution.

GLs 61 and 62 and FAQ 1266: OFAC Expands Telecommunications Opportunities in Venezuela

On August 21, 2026, OFAC issued General License 61 (“GL 61”), General License 62 (“GL 62”), and accompanying FAQ 1266, significantly expanding authorized telecommunications-related activities in Venezuela. GL 61 authorizes U.S. persons to provide goods, technology, software, and services related to the installation, maintenance, repair, upgrade, operation, and support of telecommunications networks in Venezuela, including transactions involving the Government of Venezuela, CONATEL, CANTV, and Movilnet. The authorization covers a broad range of activities, including internet connectivity, data services, software licensing and support, cloud services, submarine cable infrastructure, network equipment, payment processing, logistics, and related support services.

The authorization is subject to several important conditions. Contracts with the Government of Venezuela must be governed by U.S. law and provide for dispute resolution in the United States, United Kingdom, France, or Singapore. In addition, GL 61 prohibits debt swaps, payments in gold, and payments using digital assets issued by or on behalf of the Government of Venezuela, including the petro. The license also excludes transactions involving specified parties connected to Russia, Iran, North Korea, Cuba, or China, blocked vessels, and the formation of new telecommunications joint ventures or investment vehicles in Venezuela. Companies relying on the authorization must submit detailed reports regarding covered transactions to the U.S. Department of State within ten days of the first transaction and every ninety days thereafter.

At the same time, OFAC issued GL 62, authorizing parties to negotiate and enter into contingent contracts for new investments in Venezuela’s telecommunications sector, including agreements to establish new telecommunications providers, expand existing operations, form joint ventures, and conduct related commercial, legal, technical, and environmental due diligence. Any such agreement, however, must expressly provide that performance remains contingent upon obtaining separate OFAC authorization.

These measures expand opportunities for telecommunications-related engagement in Venezuela while maintaining significant restrictions on investment activity and other dealings involving the Government of Venezuela.