Sanctions on Venezuela: taking resources out is authorized, investing needs a permit

On March 6 Washington authorized exports of Venezuelan gold to the United States. The table discussing how the National Electoral Council gets renewed convened five months later. Between those two dates the Treasury signed licenses covering crude, diluents, petrochemicals, electricity and critical minerals.

That distance is not an impression. It is on paper, with license numbers and issue dates, and it describes an architecture nobody has yet set out on a single page: what takes resources out of the country was authorized by general license, once and for everyone; what puts capital in or creates ownership still requires an additional permit, one at a time.

Taking out runs on a general license; putting capital in does not

License 48A authorizes supplying goods, technology, software and services to explore, develop and produce oil, gas and petrochemicals, and also to generate, transmit, store and distribute electricity. In the same text it expressly prohibits forming new joint ventures or entities in Venezuela. You may bring the crew, the rig and the turbine. You may not incorporate the company that would own anything.

That bar was not transitional. On August 27 the agency rewrote eight licenses and 48A became 48C. The veto survived word for word, in paragraph (b)(5): it does not authorize "the formation of new joint ventures or other entities in Venezuela" to explore or produce oil, gas or petrochemicals, nor to generate, transmit, store or distribute electricity. Six months and two rewrites later, the sentence is still in the text.

Twelve days earlier, Caracas had removed its own lock on that very company. The Organic Hydrocarbons Law reform published on January 29 replaced the "prior approval of the National Assembly" — which until then could "modify the proposed terms" of any joint venture — with authorization by the President of the Republic and mere notification to parliament. Venezuela made incorporating the company easier on January 29; the United States barred it on February 10. The bottleneck did not disappear: it changed capitals.

August's deal shows where the capital lands when the Venezuelan door is shut. The White House fact sheet of August 31 places the 35% U.S. stake not in the Venezuelan operator but "in its corporate parent." The holding sits one floor above the border: outside the reach of 48A's bar, and outside the Venezuelan contract. The restriction did not stop the investment; it chose its domicile.

That is what 49A is for: it authorizes negotiating contingent contracts for new investment in oil, gas, petrochemicals and electricity. Negotiating, not performing: the license itself requires obtaining a further authorization from the agency to carry out what was signed. On April 14 came 56, of the same cut, for negotiating contingent contracts with the Government of Venezuela.

The sharpest case arrived on August 21. The telecommunications licenses authorize supplying equipment, software and services to install, repair and operate the Venezuelan network, and in the same document bar setting up the joint venture that would put in the capital: the August 24 analysis. You may repair the network. You may not own a piece of it.

Nine months on there is no announced election date, no renewed National Electoral Council, and the committee that must filter Supreme Tribunal candidates has not a single member named. On September 6 the U.S. energy secretary said in Caracas that there will be elections and that this "is coming," with no date. The head of the opposition delegation put the Tribunal’s renewal in November and the electoral arbiter’s in December. Fourteen civil society organizations objected to that timetable in writing: they hold that current law allows renewing the electoral body in about two months, and that October is possible if there is political will.

Who may cross the door

The conditions say as much as the authorizations. The crude and gold licenses serve only an "established U.S. entity," defined as one organized under U.S. law on or before January 29, 2025. The formulation is narrower than "U.S. person" and excludes any company incorporated later, which also closes the route of a non-U.S. firm opening a subsidiary to use the permit.

Added to that is the bar on participation by entities from China, Cuba, Iran, North Korea and Russia, or any controlled by them. And one condition that appears in the crude license, the goods and services license, the six-majors license and the gold license alike: mandatory payment mechanics designed to secure U.S. government control over the funds.

That clause was sharpened on August 27, and China now has its own paragraph. In the license authorizing operations with the state oil company, paragraph (c)(5) excludes persons from Russia, Iran, North Korea and Cuba and any entity controlled by them or in a joint venture with them. Paragraph (c)(6), separate, reaches the entity "organized under the laws of Venezuela or the United States" that is controlled by a person organized under the laws of China, or in a joint venture with one. The exclusion stopped chasing the foreign parent and began chasing the local company.

That collides with what Caracas promises. On Sunday September 6 the hydrocarbons minister said the joint ventures with China and Russia "will keep carrying out their activities," and those are literally the companies that paragraph leaves outside the permit. Five days earlier, China's foreign ministry spokesman had asked that his country's rights and interests in Venezuela be safeguarded. Which venture has which partner is not published, and the U.S. buyer seeking cover under the license needs to know before signing.

None of that began with the August deal. Since January 7, by decision of the Energy Department, the money from Venezuelan crude lands in accounts under U.S. control and is handed out, in the document's own wording, "at the discretion of the U.S. government." Eight months later that is still the collection route, royalties included.

The first dated proof: up to 120 days

Until this week all of the above was read in the text of the licenses. On September 3 it began to be read in a company’s file. GeoPark filed with the U.S. securities commission the form informing its shareholders of its entry into the Bare block, in the Orinoco Belt, and there it wrote that the contract’s effective date remains subject to approvals, authorizations, regulatory requirements and sanctions-related compliance requirements, with an estimated maximum period of one hundred twenty days.

The window matters less than who writes it and before whom. A press note allows the conditional; a filing to the securities commission puts the company on the hook for what it states. One hundred twenty days from September 3 push the start into early January 2027. And within that same contract the operator funds one hundred percent of the capital of approved work programs and retains a 65% interest, so the wait is carried by whoever puts up the money.

On September 2 the architecture extended to coal and minerals. License 55A authorizes negotiating and entering into new investment contracts in those sectors provided performance is made expressly contingent upon separate authorization from the agency itself, and its second note clarifies that forming new joint ventures is among what may be signed. Signing the company, yes; putting it to work, with a separate permit. Five days later the president of Venezuela’s Mining Chamber described it from the ground: the licenses, he said, center on buying the final raw material and exclude direct capital injection.

Eight months of licenses described an architecture. Now there is a number that measures it, written by the party that bears it and before the body that can sanction it for writing it wrong.

The Treasury’s file on the signatory

On September 25, 2018 the Office of Foreign Assets Control added four names to its sanctions list in an action whose press release was titled "Treasury Targets Venezuelan President Maduro's Inner Circle." The four: Cilia Flores, Vladimir Padrino López, Jorge Jesús Rodríguez Gómez and Delcy Eloína Rodríguez Gómez, ID number 10353667.

On April 1, 2026 the same agency deleted that last person’s two entries, with the same ID number. The action records no other deletion. On April 14 it deleted the former attorney general’s. Five months after the first, the signature that came off the list is the one appearing on the Venezuelan side of the agreement over seventeen fields: the anatomy of that deal, here.

Between the two dates sits a third act. In March the United States formally recognized the acting president before a New York federal court as the authority empowered to act on behalf of the Venezuelan State. That recognition is what makes her signature operative before a U.S. court today, and it is an executive act, revocable by the next executive.

None of those documents says one thing was traded for the other, and no paper links the delisting to the deal. What is established is the order: first the formal obstacle to dealing with the person was lifted, then her authority was recognized, and at the end it was signed. In the same window the criminal case against the former president remains open, with trial set for June 2027, and the signatory’s brother — who presides over the National Assembly and heads the official delegation at the dialogue — remains on the list.

The argument on the other side, and the dates

There is a defensible reading of all this and it is worth taking in its strong form. You do not let foreign capital into a sector before a legal framework exists, and Venezuela had no new oil fiscal regime until April and no regulation until July. Gating investment while opening trade is orthodox risk management, and licenses 49 and 56 exist precisely so companies can negotiate while the framework is finished. Lifting sanctions on officials is, besides, the ordinary currency of any negotiated transition.

And it worked on what it promised. Output reached 1,200,000 barrels a day in July, the highest since 2019, and the Central Bank certified 7.14% year-on-year expansion in the second quarter. On the law governing contracts the framework even gave ground on August 27: the U.S.-law requirement vanished from eight licenses.

The trouble with the argument is the dates. Gold was authorized on March 6, when there was no new mining framework either, and there the caution did not apply. The hydrocarbons regulation was published on July 7, and the bar on incorporating new companies was still standing on August 21, six weeks later, when the telecommunications package was rewritten. If the bar was temporary until a legal framework existed, the framework has existed since July.

On the other side of the ledger, the worker in Venezuelan private manufacturing earned 298 dollars a month in the second quarter according to the industry’s own survey, against 19.9% inflation in July. On the night of August 29, while the deal was being explained on state television, five western states were without power. And fourteen human rights organizations hold that more than three hundred political prisoners remain despite the amnesty law.

Eight months after the first license, Venezuela is producing the most oil since 2019 and the worker in its industry earns 298 dollars a month. Both are true and both come out of the same file.