The sanctions imposed by the Trump administration on Venezuela's national oil conglomerate, Petroleos de Venezuela SA, are expected to impact companies and institutions well beyond the borders of the U.S. and Venezuela.

“Anybody outside of the U.S. can be sanctioned because the U.S. can take the view that it's supporting” PDVSA, said Sanjay Mullick, international trade and national security partner at Kirkland & Ellis in Washington. “It indicates that the U.S. seeks to apply these sanctions extraterritoriality.”

Sanctions levied by the United States are generally designed to have the broadest impact possible, Mullick said. Non-U.S. institutions and individuals run the risk of jeopardizing access to the U.S. financial system if the U.S. Department of the Treasury's Office of Foreign Assets Control determines they are providing significant support to PDVSA.

The sanctions directed at Venezuela's state-owned oil company are the Trump administration's latest effort to ratchet up pressure on Venezuelan President Nicolas Maduro's government. In January, 19 countries, including Canada, Colombia, France and the U.S., recognized Venezuelan opposition leader Juan Guaido as the nation's interim president. U.S. National Security Adviser John Bolton estimates the sanctions will affect $7 billion in PDVSA assets.

Venezuela relies heavily on crude exports to prop up its economy. The U.S. takes in more than 500,000 barrels a day as Venezuela's second-largest consumer of crude exports. A dozen tankers loaded with Venezuelan crude have been spotted idling for days as exporters scramble to find a new destination to unload the cargo.

U.S. companies that deal with PDVSA have a reprieve, however. PDVSA subsidiaries CITGO Holdings and PDV Holdings have received six-month general licenses, though revenue must be placed in a U.S.-based escrow account. The licenses extend to other companies that had long been doing business with the Venezuelan company, including Baker Hughes, Chevron, Valero, Halliburton and Schlumberger, with the caveat that they do not send diluents, a compound which would allow PDVSA to process its heavy crude in other international refineries.

But when companies must choose between the U.S. and countries under U.S. sanctions, it is the U.S. interests that usually prevail, primarily because of the dollar's status as the preferred denomination for global finance, Mullick said.

Since the U.S. exit from the Iranian nuclear deal and the reimposition of sanctions, European banks have shied away from Iranian business.

“The U.S. has long gotten non-U.S. banks to heel because of their dependency on the dollar,” Mullick said.

As a result of the newly imposed sanctions, companies must take stock of all deals and holdings as even indirect touch points with Venezuela can be seen as violating the sanctions, said Holland & Knight sanctions attorney Gabriel Caballero. Violations carry penalties that include civil fines, blocked transactions or even criminal charges.

“Let's say your company creates valves and you export them to a distributor in Latin America. If that distributor re-exports your product to Venezuela, you run the risk of getting hit with sanctions,” said Caballero, who is part of Holland & Knight's 20-attorney Venezuela focus team.

The broad nature of the sanctions means industries outside of the petroleum space may see some sanctions, including logistics companies that ship to Venezuela and even attorneys who represent Venezuelan clients in transactions or litigation.

Despite all of the restrictions, Caballero stresses Venezuela has not yet gone the way of Cuba or Iran. Commercial and humanitarian activities related to such items as medical devices, for example, are still allowed.

“I would characterize Venezuela as a yellow light,” Caballero said.

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