PRINT
1232. What does OFAC consider "commercially reasonable terms," as described in Venezuela General License (GL) 46?
"Commercially reasonable terms" means terms that are consistent with prevailing market and industry standards for like or similar products produced by a company of similar size and scope, while taking into account characteristics such as quality, quantity, pricing, performance, and safety, among others. Commercially reasonable terms include terms related to, among other things, the governance, economics, operations, and legal/compliance requirements of a contract negotiated at arm’s length between two or more parties.
Released on Feb 06, 2026
Click the appropriate link below for access to this file.
Click the appropriate link below for access to this file.
1) See comments to Venezuela GL 46 for consolidated comment on the GL.
2) To the extent that the “commercially reasonable terms” portion of the interpretive note to paragraph (a) of GL 46 serves as an explicit statement of what is always required of “ordinarily incident” transactions, this statement has cross-programmatic relevance. Notably, OFAC evidently does not consider the inherent market distortions that arise from the “military-involved” nature of the Venezuelan oil export context as a whole to render the terms on which such oil is sold “commercially unreasonable”. Instead of indicating that terms must reflect those of an undistorted market, the “commercially reasonable terms” condition appears aimed primarily at precluding circumvention of sanctions by, for example, making or receiving payments in kind that benefit PdVSA beyond what could be justified by the value of...