Prohibiting Certain Additional Transactions With Respect to Venezuela

This executive order expands U.S. financial sanctions against Venezuela by prohibiting Americans and those in the U.S. from purchasing Venezuelan government debt, dealing in newly pledged Venezuelan debt as collateral, and preventing the Venezuelan government from selling or pledging equity interests in entities where it holds 50% or greater ownership. The order took effect immediately upon signing and builds on prior sanctions targeting the Maduro regime.

Federal Register Open PDF 83 FR 24001

Impact dates

May 21, 2018
Order effective at 12:30 p.m. EDT

Key directives

Prohibit all transactions related to purchase of debt owed to Government of Venezuela
Prohibit dealings in any Venezuelan government debt pledged as collateral after effective date
Prohibit sale, transfer, assignment, or pledging as collateral of equity interests in entities where Venezuelan government holds 50% or greater ownership
Override pre-existing contracts and licenses for prohibited activities
Prohibit evasion, avoidance, and conspiracy to violate order
Authorize Treasury Secretary to promulgate implementing regulations
Direct all agencies to take appropriate measures to carry out provisions

Who is ordered

Timeline

Immediate

Prohibitions effective at 12:30 p.m. EDT on May 21, 2018
All covered transactions by U.S. persons halted
Existing contracts/licenses overridden for prohibited activities

Near term (90d)

Treasury Department rulemaking and regulatory guidance expected
Financial institutions adjusting compliance frameworks
Market repricing of Venezuelan debt instruments

Long term

Structural constriction of Venezuelan government financing options
Potential expansion of sanctions architecture
Lasting precedent for sovereign debt sanctions as foreign policy tool

Risks & tensions

Immediate effective date with no grace period creates compliance shock for ongoing transactions
50% ownership threshold for equity prohibitions may create complex beneficial ownership tracing challenges
Collateral prohibition applies only to debt pledged 'after' effective date—temporal boundary creates valuation and legal uncertainty for pre-existing arrangements
Broad 'evasion' prohibition in Section 2 risks over-deterrence and chilling of permissible activity
Exception clause ('except to the extent provided by statutes, or in regulations, orders, directives, or licenses') delegates substantial discretion to Treasury, creating regulatory uncertainty until guidance issued
Humanitarian carve-out not explicit in text—potential tension with deepening crisis cited as justification