The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) issued General License 46, “Authorizing Certain Activities Involving Venezuelan-Origin Oil” (General License), on January 29, 2026, permitting U.S. entities to engage in limited oil-related activity in Venezuela that is otherwise prohibited under U.S. sanctions. The General License is the latest development in the Trump administration’s approach to Venezuela, which seeks to open U.S. economic opportunities involving the Venezuelan oil market within strict confines imposed by the U.S. government. Importantly, the General License places limits on contractual and payment terms that companies will need to bear in mind when engaging in authorized activity.

Key Aspects of the OFAC General License

The General License authorizes “an established U.S. entity” to conduct otherwise prohibited transactions that are “ordinarily incident and necessary to the lifting, exportation, reexportation, sale, resale, supply, storage, marketing, purchase, delivery, or transportation of Venezuelan-origin oil, including the refining of such oil” with the Government of Venezuela, Petróleos de Venezuela, S.A. (PdVSA), and their subsidiaries. An “established U.S. entity” is an entity organized under the U.S. laws on or before January 29, 2026. This limitation ensures that foreign entities cannot establish new U.S. entities solely for the purpose of taking advantage of the General License.

Any payment to a blocked person that is made as part of authorized dealings must be made into either the Foreign Government Deposit Funds or another account that the U.S. Treasury Department chooses. Therefore, to the extent transactions would require payment to PdVSA, the Government of Venezuela, or a subsidiary that is “blocked” as a result of sanctioned ownership, the payments must comply with this limitation.

The Foreign Government Deposit Funds were established under Executive Order 14373, “Safeguarding Venezuelan Oil Revenue for the Good of the American and Venezuelan People,” to keep funds received by the Government of Venezuela and its agencies from oil sales in a designated U.S. government-controlled account. This account is currently held in Qatar. Payments can also be made through commercially reasonable swaps of crude oil, diluents, or refined petroleum products

The General License imposes the following additional restrictions and requirements:

• U.S. laws must govern the contract, and payment terms must be commercially reasonable and not involve debt swaps or payments in gold or digital currency.
• The transaction cannot involve persons located in or owned, controlled, or in a joint venture with an entity in, Cuba, Iran, North Korea, or Russia.
• The U.S. or Venezuelan entities in the transaction cannot be owned, controlled, or in a joint venture with a Chinese entity.
• The transaction cannot involve a blocked vessel or the unblocking of blocked property.
• If the acquired Venezuelan oil will be supplied to persons outside the United States, a report must be filed with the State Department and Department of Energy with information about the transaction.

The General License takes immediate effect and does not have an expiration date. OFAC has not yet published any frequently asked questions related to the General License.

Considerations for Companies Engaging in Transactions Under the General License

• Companies should make sure they qualify as an established U.S. entity and that the transaction otherwise falls within the scope of authorized activity related to Venezuelan-origin oil.
• Contractual terms will need to account for the payment restrictions and allow for termination if the General License is withdrawn.
• Companies should diligence all parties to the transaction to ensure no nexus to countries of concern that are prohibited by the General License.
• It is important to establish procedures to comply with reporting requirements and to keep adequate records demonstrating compliance with the scope of the General License.
  Source: Fenwick & West LLP