OFAC Authorizes Broader Venezuela Deals Under New General Licenses
OFAC issued General Licenses 56 and 57, expanding U.S. contract negotiations and financial transactions with specified Venezuelan entities.
Why it matters: Legal and compliance teams must reassess sanctions protocols as these licenses allow more U.S. engagement with Venezuelan government entities and financial institutions, but require precise reporting and strict adherence to authorization limits. Missing new obligations or acting without separate authorization could trigger penalties or create compliance gaps.
- General License 56 permits negotiating conditional commercial contracts with the Venezuelan government—but contract performance still needs separate OFAC approval.
- General License 57 authorizes certain financial transactions involving four named Venezuelan banks and their majority-owned subsidiaries.
- Only the party conducting the main licensed activity must file required reports with OFAC, as clarified in FAQ 1248.
- OFAC requires reports within 10 business days after a transaction under either license; failure to comply risks enforcement.
The U.S. Treasury’s Office of Foreign Assets Control (OFAC) on April 14, 2026, issued Venezuela General Licenses 56 and 57, marking a notable expansion of permissible U.S. engagement in Venezuela.
- General License 56 allows U.S. persons to negotiate and enter into contracts with the Venezuelan government or the state oil company (PdVSA), but these deals must remain contingent—actual performance or delivery of services is forbidden without separate OFAC authorization. This newly allowed negotiation phase aims to streamline pre-contract planning without breaching sanctions, but any execution still faces strict controls. LexBlog explains that this permits "the negotiation and entry into contingent contracts, but requires that the performance of any such contract remain expressly contingent upon separate authorization from OFAC."
- General License 57 covers specific financial services transactions with Banco Central de Venezuela, Banco de Venezuela, Banco Digital de los Trabajadores Banco Universal C.A., Banco del Tesoro, C.A. Banco Universal, their owned subsidiaries, and certain government officials or entities. U.S. companies can now process payments or provide services normally blocked, so long as they fall under the “ordinarily incident and necessary” standard, according to Diaz Reus.
OFAC’s FAQ 1248 confirms reporting responsibilities: only those directly conducting the main authorized activity must report within 10 business days of the transaction. Correspondent banks or payment processors are not obligated if they merely facilitate related payments (OFAC FAQ 1248).
Legal, compliance, and risk teams will need to revise internal protocols, flag reporting deadlines, and train staff to distinguish between negotiation and actual contract performance. These changes seek to enable more legitimate U.S.-Venezuela business links while upholding core sanctions restrictions.
By the numbers:
- 4 — Venezuelan banks included under General License 57 (and affiliates)
- 10 business days — Deadline for reporting activities conducted under either license to OFAC
- April 14, 2026 — Date OFAC issued General Licenses 56 and 57
Yes, but: Critical ambiguities remain, including how OFAC will assess 'ordinarily incident and necessary' for financial transactions, and what documentation suffices as proof of contingent (not executed) contracts.
What's next: Further OFAC guidance or enforcement actions may clarify what constitutes authorized activity and acceptable documentation in upcoming months.