GL 49A: The license that allows negotiation without execution — and why it matters most for investors who haven't entered yet
GL 49A authorizes something previously impossible: negotiating and signing contingent investment contracts in oil, gas, petrochemicals, and electricity without prior OFAC approval.
GL 49A authorizes something that was previously impossible: negotiating and signing contingent investment contracts in oil, gas, petrochemicals, and electricity without requiring prior OFAC approval. The condition: each contract must include an explicit contingency clause regarding OFAC authorization for execution. It is the deal-making license.
GL 49A does not authorize investment. It authorizes the step prior to investment: negotiation, due diligence, and the signing of agreements that are only executed if OFAC authorizes them. It seems minor. It is not. Before GL 49A, a U.S. company could not legally sit at a negotiation table with PDVSA to discuss an investment contract. It could not send geologists. It could not hire lawyers to evaluate a block. It could not sign an MOU. Each of those activities required a specific OFAC license.
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GL 62 — Negotiations of and Entry Into Contingent Contracts for Investment in the Telecommunications Sector of Venezuela
Authorizes transactions prohibited by the VSR — including those involving the Government of Venezuela, CONATEL, and CANTV — related to the negotiation of and entry into contingent contracts for new investment in the telecommunications sector of Venezuela, provided that performance of any such contract is made expressly contingent upon separate authorization from OFAC. Covers establishing new telecommunication service providers, expanding existing operations, and forming new joint ventures or other entities, along with prefatory steps such as commercial, legal, technical, safety, and environmental due diligence and assessments. No periodic reporting and no expiration date.