On January 29, 2026, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) issued General License No. 46 (GL 46) authorizing all transactions otherwise prohibited by the Venezuela Sanctions Regulations, 31 C.F.R. part 591, that are "ordinarily incident and necessary" for U.S. persons to purchase and export Venezuelan-origin oil, including transactions that would otherwise be prohibited by blocking sanctions on the Government of Venezuela, Petróleos de Venezuela, S.A. (PDVSA), or any entity where PDVSA owns, directly or indirectly, a 50 percent or greater interest (PDVSA subsidiaries). 

Like all OFAC general licenses, GL 46 is "self-executing," meaning that it allows U.S. persons, and in certain circumstances, non-U.S. persons, to engage in otherwise prohibited transactions without the need to seek a specific license from OFAC, subject to terms and conditions described in the GL. However, many of GL 46's terms and conditions are unprecedented and may be clarified by OFAC in the coming weeks. 

1. An authorized transaction must be ordinarily incident and necessary to lifting, exportation, reexportation, sale, resale, supply, storage, marketing, purchase, delivery, or transportation of Venezuelan-origin oil, including the refining of such oil. This authorization appears to clearly cover purchases of Venezuelan-origin oil from PDVSA or PDVSA subsidiaries. OFAC also explicitly clarifies that the authorization covers "arranging shipping and logistics services, including chartering vessels, obtaining maritime insurance and protection and indemnity ('P&I') coverage, and arranging port and terminal services, including with port authorities or terminal operators that are part of the Government of Venezuela." However, additional questions remain. For example, does the authorization cover activities related to Venezuelan-origin petroleum products that may be the byproduct of authorized activities, such as refining? Similarly, does the authorization cover repairs to Venezuela's dilapidated infrastructure necessary for exportation? 
2. An authorized transaction must be "ordinarily incident and necessary" to a qualifying transaction "by an established U.S. entity." In contrast to most GLs, which authorize activity by U.S. persons and non-U.S. persons where there is a U.S. nexus, GL 46's authorization is narrower, applying only to transactions "ordinarily incident and necessary to certain qualifying activities "by an established U.S. entity," that is, an entity organized under the laws of the U.S. or any jurisdiction within the U.S. on or before January 29, 2025. This unusual condition raises additional questions that OFAC may clarify in coming days. It appears that the authorization allows non-U.S. entities to engage in transactions "ordinarily incident and necessary to" a qualifying transaction by an established U.S. entity – for example, if a U.S. entity purchases Venezuelan-origin oil from PDVSA, a transaction by a non-U.S. company to transport the oil to the U.S. would appear "ordinarily incident and necessary to" the qualifying transaction and thus within the scope of the GL. But what happens if there are no U.S. parties to the underlying project with PDVSA? Under other sanctions programs, OFAC has repeatedly confirmed that non-U.S. persons do not risk exposure to U.S. sanctions for engaging in or facilitating transactions that are authorized for U.S. persons pursuant to a general license. Are non-U.S. persons able to rely on GL 46 to lift, export, reexport, sell, resell, supply, store, market, purchase, deliver, or transport Venezuelan-origin oil in a similar manner? Or does GL 46's narrow authorization for activities by an established U.S. entity mean that non-U.S. persons may still face designation risk for such activities when there is no underlying transaction with an established U.S. entity?
3. U.S. law must govern an authorized transaction. Contracts with the Government of Venezuela, PDVSA, or any of its entities must specify that the contract is governed by U.S. law, and that any dispute resolution arising under the contract will occur within the U.S.
4. Payments to blocked persons under an authorized transaction must be routed to designated U.S. Treasury accounts. Payments owed to blocked persons must be made into "Foreign Government Deposit Funds" as described in Executive Order (E.O.) 14373 or any other account as instructed by the U.S. Department of the Treasury, and not directly to blocked persons. Based on E.O. 14373, this appears to be an effort to safeguard such funds from attachment by the Government of Venezuela's and PDVSA's many creditors. Details for making payment to these accounts are not yet public. 
5. An authorized transaction cannot involve Russian, Iranian, North Korean, or Cuban entities. An authorized transaction cannot involve any person located in or originating under the laws of these countries, nor any entity owned or controlled, directly or indirectly, by or in a joint venture (JV) with such persons. Notably, in contrast to OFAC's long-established 50 Percent Rule, this language does not make clear what ownership stake is sufficient for an entity to be "owned by" a Cuban, Iranian, North Korean, or Russian entity and when an entity can be said to be "controlled by" such an entity. 
6. An authorized transaction cannot involve Venezuelan or U.S. entities owned or controlled by People's Republic of China (PRC) entities. An authorized transaction cannot involve any entity that is both located in or organized under the laws of the U.S. or Venezuela and that is owned or controlled, directly or indirectly, by or in a JV with a person located in or organized under the laws of the PRC. This restriction contrasts with the restriction on Cuban, Iranian, North Korean, or Russian entities in that PRC-owned or -controlled entities outside Venezuela or the U.S. appear to be authorized to take part in the transaction so long as it involves qualifying activities by a U.S. entity. For example, the final customer for the Venezuelan-origin oil can presumably be a PRC entity. However, it also does not make clear what ownership stake or controlling interest is sufficient for a U.S. or Venezuelan entity to be subject to the restriction. In addition, this restriction may be read to exclude many established U.S. entities that may have a joint venture with a PRC partner, even if the JV has no connection with the activity in Venezuela.
7. An authorized transaction cannot involve blocked vessels, which presumably includes vessels that are identified on the Specially Designated Nationals and Blocked Persons list (SDN List) as well as those that are blocked because they are the property of a sanctioned person, even if not separately identified. 
8. Payment terms for an authorized transaction must be "commercially reasonable." Commercially reasonable terms include some but not all non-cash transactions or exchanges — informally known as "swaps" — a shift from prior U.S. government policy on such transactions. Notably, swaps involving crude oil, dilutants, or refined petroleum products are authorized. However, swaps in the form of gold or denominations of digital currency, digital coin, or digital tokens issued by, for, or on behalf of the Government of Venezuela are explicitly prohibited.
9. Authorized shipments outside the U.S. must be notified to the Departments of State and Energy. GL 46 appears to authorize shipments of Venezuelan-origin oil to both the U.S. and destinations outside the U.S. (besides Cuba, Iran, North Korea, and Russia). However, any person (including, presumably non-U.S. persons) exporting, reexporting, selling, re-selling, or supplying Venezuelan-origin oil to non-U.S. countries pursuant to GL 46 must provide a detailed report to the Departments of State and Energy within 10 days if exporting outside U.S., and every 90 days if ongoing. Reports must identify, for each transaction: (1) the parties involved; (2) the quantities, values, and countries of ultimate destination; (3) the dates the transactions occurred; and (4) taxes, fees, or other payments to the Government of Venezuela.

The U.S. sanctions against Venezuela's energy sector are evolving quickly. Separate and apart from GL 46, on February 3, 2026, OFAC issued General License No. 47 (GL 47) a separate authorization for transactions involving the Government of Venezuela, PDVSA, or PDVSA subsidiaries that are ordinarily incident and necessary to the exportation, reexportation, sale, resale, supply, storage, marketing, delivery, or transportation of U.S.-origin diluents to Venezuela. GL 47 includes some, but not all, of the same unusual terms and conditions, including a requirement that U.S. law and dispute resolution must govern the contract and a prohibition on commercially unreasonable payment terms, such as debt swaps and payments in gold or digital currency. 

Activities involving the Government of Venezuela, PDVSA, or PDVSA subsidiaries that do not meet all of these criteria remain prohibited for U.S. persons and non-U.S. persons where there is a sanctions nexus. However, it's possible that OFAC may consider specific license applications for transactions that do not meet all of the criteria, provided the applicant is able to make a compelling argument that such a license supports U.S. national security, U.S. foreign policy, or other grounds. And it remains possible that all of this will change again tomorrow. 

For more information, please contact:

Timothy P. O'Toole, totoole@milchev.com, 202-626-5552

Leah Moushey, lmoushey@milchev.com, 202-626-5896

Melissa Burgess, mburgess@milchev.com, 202-626-5914

Collmann Griffin, cgriffin@milchev.com, 202-626-5836

Caroline J. Watson, cwatson@milchev.com, 202-626-6083

Arooshe P. Giroti, agiroti@milchev.com, 202-626-6060

Peter Kentz, pkentz@milchev.com, 202-626-5891

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