The U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) recently announced new sanctions targeting non-U.S. individuals and entities for operating in key areas of the Venezuelan economy. On February 18, 2020, OFAC designated Rosneft Trading S.A., the Swiss-incorporated oil brokerage firm, for operating in the oil sector of the Venezuelan economy, pursuant to Executive Order 13850. Rosneft Trading S.A. is a subsidiary of Rosneft Oil Company (“Rosneft”), the Russian state-controlled energy company. OFAC also designated Didier Casimiro, the chairman of the board of directors and president of Rosneft Trading S.A.
Recently, on March 12, 2020, OFAC escalated its sanctions against Rosneft and the Maduro regime, designating TNK Trading International S.A. (“TTI”) for operating in the oil sector of the Venezuelan economy. TTI is incorporated in Switzerland and is also a subsidiary of Rosneft Oil Company. TTI was designated pursuant to E.O. 13850.
Implications for Non-U.S. Companies
The designations of Rosneft Trading S.A. and TTI demonstrate OFAC’s commitment to sanctioning individuals and entities that support the Maduro regime, particularly those operating in the petroleum sector. Both Rosneft Trading S.A. and TTI were allegedly involved in the trading, processing, and transport of raw materials, including raw petroleum and petroleum products.
These designations demonstrate the risk to non-U.S. persons operating in the Venezuelan economy, especially those that do business with the Government of Venezuela. Notably, the sanctions imposed on Mr. Casimiro indicate OFAC’s willingness to target individuals. OFAC imposed sanctions against Mr. Casimiro, alleging that he held meetings with Petroleos de Venezuela (“PdVSA”) that involved assessing projects and opportunities to strengthen strategic relationships between PdVSA and Rosneft Trading S.A. Accordingly, senior executives at international companies should be mindful of the risks in transacting with the Government of Venezuela, including companies owned by the Government.
In short, the political landscape is developing quickly, which could mean additional OFAC sanctions in the future. We will continue to closely monitor events in this space and will report on any further developments.
If you have any questions or concerns about U.S. sanctions, please contact Bruce G. Paulsen (212-574-1533), Andrew S. Jacobson (212-574-1477), or Noah S. Czarny (212-574-1642) at Seward & Kissel’s Sanctions Practice Group.
