OFFICE OF FOREIGN ASSETS CONTROL
Venezuela Sanctions Regulations
31 CFR part 591
GENERAL LICENSE NO. 56
Authorizing Commercial-Related Negotiations of Contingent Contracts with the Government of Venezuela
(a) Except as provided in paragraph (b) of this general license, all transactions prohibited by Executive Order (E.O.) 13884 that are ordinarily incident and necessary to engaging in commercial-related negotiations of contingent contracts with the Government of Venezuela are authorized, provided that the entry into and performance of any such contract is made expressly contingent upon separate authorization from the Office of Foreign Assets Control (“contingent contracts”).
Note 1 to paragraph (a). For purposes of this general license, the term “Government of Venezuela” has the meaning set forth in section 6(d) of E.O. 13884 and includes the state and Government of Venezuela, any political subdivision, agency, or instrumentality thereof, any person owned or controlled, directly or indirectly, by the foregoing, and any person who has acted or purported to act, directly or indirectly, for or on behalf of the foregoing.
Note 2 to paragraph (a). For purposes of this general license, the term “contingent contracts” includes executory contracts, executory pro forma invoices, agreements in principle, executory offers capable of acceptance such as bids or proposals in response to public tenders, binding memoranda of understanding, or any other similar agreement.
(b) This general license does not authorize:
(1) Transactions otherwise prohibited by the Venezuela Sanctions Regulations, 31 CFR part 591 (VSR), such as transactions prohibited by E.O. 13808 related to bonds and certain other debt of the Government of Venezuela or Petróleos de Venezuela, S.A. (PdVSA), including transactions to settle such bonds and debt, as well as transactions prohibited by E.O. 13835, including transactions related to the sale, transfer, assignment, or pledging as collateral by the Government of Venezuela of any equity interest in PdVSA or any other entity in which the Government of Venezuela has a 50 percent or greater ownership interest;
(2) Payment terms that are not commercially reasonable, involve debt swaps or payments in gold, or are denominated in digital currency, digital coin, or digital tokens issued by, for, or on behalf of the Government of Venezuela, including the petro;
(3) The entry into a settlement agreement or the enforcement of any lien, judgment, arbitral award, decree, or other order through execution, garnishment, or other judicial process purporting to transfer or otherwise alter or affect property or interests in property blocked pursuant to the VSR;
(4) Any transaction involving a person located in the Russian Federation, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, or the Republic of Cuba, or any entity that is owned or controlled by or in a joint venture with such persons;
(5) Any transaction involving an entity located in or organized under the laws of Venezuela or the United States that is owned or controlled, directly or indirectly, by or in a joint venture with a person located in or organized under the laws of the People’s Republic of China;
(6) Any transaction involving any individual or entity identified on the Office of Foreign Assets Control’s List of Specially Designated Nationals and Blocked Persons (SDN List), as well as any entity in which one or more of such persons identified on the SDN List own, directly or indirectly, individually or in the aggregate, a 50 percent or greater interest; or
(7) The unblocking of any property blocked pursuant to 31 CFR Chapter V.
Bradley T. Smith
Director
Office of Foreign Assets Control
Dated: April 14, 2026
1) This is one of three “contingent contracts” GLs issued as of the date of the issuance of GL 56. The other two (Venezuela GL 49 and Venezuela GL 55) license against the entirety of the VSR but are sector specific, while this GL licenses against EO 13884 only, but is not bounded by economic sector. This GL does not have the “Note 2 to Paragraph (a)” that the others have, but it should be assumed that transactions “ordinarily incident and necessary to engaging in commercial-related negotiations of contingent contracts” can include the “include prefatory steps for the aforementioned activities, such as conducting commercial, legal, technical, safety, and environmental due diligence and assessments” that are explicitly described as covered in the context of the other two GLs.
2) It is notable that while the other two contingent contracts GLs contain limited carveouts, this one contains something approximating the full suite of carveouts that appear in post- Jan. 2026 Venezuela GLs that apply on a non-contingent basis. Compare e.g. paragraph (c) of Venezuela GL 52.
3) A notable difference between the carveout section in this GL and that of GL 52 is that the bolded text is removed from this GL, while is appears in GL 52 and others.
Any transaction involving a person located in or organized under the laws of the Russian Federation, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, the Republic of Cuba, or any entity that is owned or controlled, directly or indirectly, by or in a joint venture with such persons;
The removal of “or organized under the laws of” is a bit of a mystery, perhaps OFAC considered it redundant given longstanding policy that an entity organized under the laws of a given country is “in” that country. The removal of “directly or indirectly” is easier to explain, since the notion of “indirect control” is not something that has ever featured in OFAC sanctions law and “owned or controlled” is a standard (without the directly or indirectly) that appears and has been interpreted in many contexts, including the definition of “Government of Venezuela”.
4) One of the carveouts is for “transactions prohibited by E.O. 13808 related to bonds and certain other debt of the [GOV], including transactions to settle such bonds and debt, as well as transactions prohibited by E.O. 13835, including transactions related to the sale, transfer, assignment, or pledging as collateral by the Government of Venezuela of any equity interest in PdVSA or any other entity in which the Government of Venezuela has a 50 percent or greater ownership interest.” Does this include the potential formation of a JV with the GoV where the GoV would “control” the entity formed, but equity in the JV will not exist until OFAC signs off on the contract?
5) Note that a feature of this and the other contingent contract GLs is that the contract need not involve an established U.S. entity. This GL allows U.S. person involvement in negotiations of non-U.S. persons with the GoV.
6) Every other “contingent contracts” GL in the Research System as of the date of the issuance of Venezuela GL 56 authorizes “negotiation of and entry into contingent contracts” (see e.g. 515.534, Russia-related General License 131, Iran General License (No. I), Venezuela General License 49 and Venezuela General License 55. This GL authorizes “negotiations of contingent contracts” but where “entry into and performance of any such contract is made expressly contingent upon separate authorization from” OFAC. This doesn’t make much sense. The hallmark of a “contingent contract” (as OFAC uses the term) is that it is a binding agreement that takes effect upon OFAC authorizing performance of the contract (i.e. removing the contingency). Here, the text of the GL suggests that one can only “negotiate” a “contingent contract,” and then seek OFAC authorization for “entry into and performance” for the contingent contract. Does this mean that no binding obligations can be made contingent on OFAC authorization? If not, what is the purpose of the GL? If so, then the parties would be “entering into” a contingent contract. Put differently, what sense would it make to approach OFAC for authorization to enter into a contract the effectiveness of which is contingent on OFAC authorization?