1233. Are all entities engaged in a transaction authorized by Venezuela General License (GL) 46 required to have contracts with the dispute resolution requirement included in paragraph (a)(1)?
No. The dispute resolution requirement in paragraph (a)(1) of GL 46 applies only to contracts governing transactions undertaken by an established U.S. entity when the contract is with the Government of Venezuela (GOV), Petróleos de Venezuela, S.A. (PdVSA), or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest (PdVSA Entities).
This requirement does not apply to indirect parties or indirect counterparties involved in transactions authorized by GL 46, such as downstream transactions involving the provision of shipping, insurance, or other services to an entity engaged in a transaction involving PdVSA. For example, this provision would not apply to a contract between an insurance provider and an established U.S. entity engaged in a...
1) See comments to Venezuela GL 46 for consolidated comment on the GL.
2) This FAQ interprets the term “such transactions with the Government of Venezuela, PdVSA, or PdVSA Entities” as it appears in paragraph (a) of GL 46. OFAC’s guidance makes clear that “transactions with” does not mean “transactions involving”. Instead, it applies only when the actual “contract” at issue is “with” GoV entities (i.e. they are a party to the contract). Query how this works in the context of a situation where a U.S. entity purchases product from a non-U.S. entity, who in turn has purchased it from PdVSA. Does the U.S. entity’s ability to transaction depend on whether the underlying transaction between PdVSA and a non-U.S. person was pursuant to a contract that met the governing law and dispute resolution requirements? The...