648. What types of activities are considered "maintenance" as the term is used in Venezuela-related General Licenses 6 and 11?
As a general matter, the authorization for "maintenance" in General Licenses 6 and 11 includes all transactions ordinarily incident to the continuity of operations, provided that, in the case of General License 11, U.S. financial institutions may not process transactions to or for the benefit of Petróleos de Venezuela, S.A. (PdVSA) or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest. (See FAQ 654 for further information on this requirement). Additionally, for the purposes of General Licenses 6 and 11, the authorization for "maintenance" generally includes all transactions and activities ordinarily incident to performing under a contract or agreement in effect prior to the sanctions effective date (in the case of General License 6, January 8, 2019, and in the case of General License 11, January 28, 2019), provided that the level of performance is consistent with the terms of the general license and consistent with past practices that existed between the party and the blocked entity prior to the applicable sanctions effective date. Notwithstanding the absence of a contract or agreement in effect prior to the applicable sanctions effective date, the authorization for "maintenance" also generally includes all transactions and activities ordinarily incident to obtaining goods or services from or providing goods or services to a blocked entity listed in such authorization in a manner consistent with the terms of the relevant general license and consistent with past practices that existed between the party and the blocked entity prior to the applicable sanctions effective date. OFAC will consider the transaction history between the party, or any intermediary party, and the blocked entity prior to the applicable sanctions effective date in assessing whether activity is consistent with past practices. The authorization for "maintenance" also generally includes authorization to enter into contingent contracts for transactions and activities consistent with the above, where any performance after the expiration of the relevant general license is contingent on such performance either not being prohibited or being authorized by OFAC.
For example, transactions and activities authorized by General Licenses 6 and 11 could include entering into or renewing contracts, paying invoices, or receiving services, consistent with the terms of the relevant general license, that were initiated after the applicable sanctions effective date involving the blocked entities if such activity is ordinarily incident and necessary to contracts in effect prior to the applicable sanctions effective date (provided the terms are consistent with past practices, as demonstrated by transaction history). Similarly, transactions and activities that are not within the framework of a preexisting agreement may be considered "maintenance" if such activity is consistent with the transaction history between the person and the blocked entity prior to the applicable sanctions effective date. Conversely, General Licenses 6 and 11 would not authorize entering into contracts, paying invoices, or receiving services involving the blocked entities where there was no preexisting relationship between a person and a blocked entity or where the contemplated activity exceeds past practices that existed between the party and the blocked entity prior to the applicable sanctions effective date as demonstrated by transaction history. [01-31-2019]
*FAQ removed at some point in 2020, presumably because both of the GLs referred to have expired.
Note: this FAQ and comments thereto were posted/written prior to the blocking of the Government of Venezuela pursuant to EO 13884. Neither the FAQ nor the comment have been updated in light of that development.
1) FAQ initially issued on Jan. 8, 2019, concerning Ukraine GL 6, amended on Jan. 31, 2019, to reflect addition of Ukraine GL 11 to the scope of the FAQ. GL 11 expired on March 29, 2019.
2) Compare FAQ 625, and comments thereto, which is virtually identical substantively as it relates to the scope of the "maintenance" GL, but tailored to goods providers, rather than service providers. See also FAQ 806.
3) See also interpretive Guidance letter in Case No. Ukraine-EO13662-2018-354754-1, dealing with the question of the scope of "maintenance" in the secondary sanctions context.
4) See also the interpretive guidance letters and other documents dealing with the scope of "winding down" operations generally, as those transactions are also permitted under GL 6, but the authorization is of a different scope than the authorization for the "maintenance" of operations.
5) See generally Examples of Transactions Deemed to be, and not to be, Within the Scope of the Standard "Wind-down" and "Maintenance" GLs