650. What is the expected level of due diligence associated with ensuring that transfers or divestment of debt (and, in the case of Venezuela-related General License 9B, equity) in certain blocked persons (in the case of General License 9B) or the Government of Venezuela (in the case of General License 3C) are consistent with the terms of General Licenses 3C and 9B?
Paragraph (a) of General License 9B requires that any divestment or transfer by U.S. persons of debt of, or equity in, Petróleos de Venezuela, S.A. (PdVSA) (or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest), that was issued prior to August 25, 2017, be to a non-U.S. person, absent authorization from OFAC. Similarly, paragraph (a) of General License 3C requires that any divestment or transfer by U.S. persons of holdings in the bonds listed in the Annex to...
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 amended on 11 Feb, 2019 to account for the amendment to GL 9, expanding the scope of the GL from "debt" to "debt" and "equity," as well as the amendment to GL 3, adding to that GL a provision requiring transfers of covered instruments to be to non-U.S. persons.
2) OFAC offers a "safe harbor" for financial institutions or registered broker-dealers processing transactions in securities that may be subject to prohibitions. The structure of the safe harbor is awkward as it blends the language of the one afforded to intermediary financial institutions (expectation of diligence with respect to...