OFAC FAQ (Current) # 553 - Venezuela Sanctions - Executive Order 13808 of August 24, 2017

Ed. Note: if you’re new to TURBOFAC, please take note that the text string filtration function generally shouldn’t be used for terms such as “ordinarily resident,” “causing” or “new debt”. For research on the meaning of words and phrases such as those, i.e. terms central to the key legal issues in sanctions law that appear on a cross-programmatic basis, you’re typically better off locating and checking the appropriate box in the “Key Legal Issues” search category, which will limit the results to those that have been manually assessed as being relevant for the interpretation of the terms at issue.

Try typing your search term (“ordinarily resident,” “new debt,” or something else) in the “Find a Search Filter” box at the top of the page, and the corresponding “Key Legal Issues” check box will pop up instantly, if one exists. Once you check the box (e.g. “new debt,” with ~55 results), you can always use the text string filtration function to further refine your search (e.g. by typing “invoice” and narrowing the ~55 results to ~10).

Note in addition that the same applies to text string searches such as “14071” (if you’re looking for items related to EO 14071). By typing “14071” in the “Find a Search Filter” field up top, you will be able to instantly narrow the results down to items manually assessed as relating to EO 14071. Ditto terms such as “515.204” or “Iran General License G” (try the “Discrete Legal Provision” search category). Please contact [email protected] or [email protected] with any questions on search results and efficiency.

Please click "Apply Text String Filters" again after clicking the "Close" button immediately below.

TURBOFAC Commentary (238 words)

Notes:

1) Compare FAQ 409; with substantive overlap in the Russia/Ukraine SSI Directive context. There appears to be no indication in the Russia and Venezuela FAQs as the scope of "new debt" is different across sanctions programs, but the difference between the prohibitions on "dealings in" such debt (Russia/Ukraine SSI) and all "transactions related to" such debt may mean have significance at the margins.

2) There are presumably some procedural aspects of "old debt" agreements that could be modified without triggering the "new debt" prohibition—e.g. the replacement of a transfer agent in the event that the transfer agent whose name is included in the original agreement ceases to exist. See Dresser-Rand Company v. Petroleos De Venezuela, S.A. (1:19-cv-02689, dkt. 150) (SDNY, 2021), interpreting this FAQ.

See also FAQ # 956 ("material" changes to pre-existing debt convert such debt to "new debt").

3) OFAC clarifies that, for pre-sanctions debt, "U.S. persons may collect and accept payment for such debt regardless of whether the relevant [sanctioned person] pays during the agreed-upon payment period". Implicitly, this means that the failure to pay on a pre-existing debt does not convert the pre-existing debt to "new debt". However, "new debt" may be created by, e.g., settlement agreements that relate back to pre-existing debts.

* See generally General Note on the Prohibitions on Dealings in “New Debt” of Certain Sanctions Targets (System Ed. Note)

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OFAC FAQ (Current) # 553 - Venezuela Sanctions - Executive Order 13808 of August 24, 2017

TURBOFAC Commentary (238 words)