On 29 January 2018, the United Kingdom’s Secretary of State for International Trade, Liam Fox, issued a document called “The Export Control (Venezuela Sanctions) Order 2018” identified with number 2018 No. 108 (hereinafter “the UK Order”), applicable to any person in the United Kingdom (UK), or any UK Person anywhere in the world in regards to the enforcement of trade restrictions against Venezuela as enacted in the European Union (EU) Council Regulation No. 2017/2063 dated 13 November 2017, (hereinafter “the Venezuelan Sanctions Regulation”).
The offenses and prohibitions in regards to the Venezuelan Sanctions Regulations are found in articles 3, 4 and 5 of the UK Order, which refer to those certain Military goods and technology contained in the EU Common List of Military Equipment (available at http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2013:090:0001:0037:EN:PDF ), as well as in Annex I and II of the Venezuela Sanctions Regulations (available at Available at http://eur-lex.europa.eu/legalcontent/EN/TXT/?uri=CELEX%3A32017R2063).
The restriction is not commercial in nature as it refers to weapons and materials that may be used for internal repression in Venezuela. However, it lists certain activities such as insurance, reinsurance and financing or financial assistance that may be applicable to the London Market and/or UK’s Financial Business Activities. Specifically, the prohibited offences, inter alia, include
• In respect to the EU Common Military List:
2(a) to provide, directly or indirectly, technical assistance, brokering services and other services related to the goods and technology, and to the provision, manufacture, maintenance and use of goods and technology listed in the Common Military List to any natural or legal person, entity or body in, or for use in, Venezuela;
2(b) to provide, directly or indirectly, financing or financial assistance related to the goods and technology, including in particular grants, loans and export credit insurance, as well as insurance and reinsurance, for any sale, supply, transfer or export of such items, or for the provision of related technical assistance, brokering services and other services, directly or indirectly to any person, entity or body in, or for use in, Venezuela.
The prohibition in 2(a) and (b) above does not apply to the execution of contracts concluded before 13 November 2017 or to ancillary contracts necessary for the execution of such contracts, provided that they comply with Council Common Position 2008/944/CFSP (4), in particular with the criteria set out in Article 2 thereof and that the natural or legal persons, entities or bodies seeking to perform the contract have notified the contract to the competent authority of the Member State in which they are established within 5 working days of the entry into force of this Regulation.
• In respect to the Annex I and II of the Venezuela Sanctions Regulations:
3(a) To sell, supply, transfer or export, directly or indirectly, equipment which might be used for internal repression as listed in Annex I, whether or not originating in the Union, to any natural or legal person, entity or body in, or for use in, Venezuela.
3(b) to provide technical assistance and brokering and other services related to the equipment referred to in point 3(a), directly or indirectly to any natural or legal person, entity or body in, or for use in, Venezuela.
3(c) to provide financing or financial assistance, including in particular grants, loans and export credit insurance, as well as insurance and reinsurance, related to the equipment referred to in point 3(a), directly or indirectly to any natural or legal person, entity or body in, or for use in, Venezuela.
The UK Order also creates an offence for the circumvention of the trade restrictions in the Venezuela Sanctions Regulations and for knowingly and/or recklessly making false statements or providing false documentation or information to obtain a EU Authorization.
Depending on the offense, penalties in the UK Order include imprisonment and/or fines, ranging from six months to ten years.
Finally, Export Control (Venezuela Sanctions) Order 2018 adds Venezuela to the list of countries which are embargoed and subject to transit control for military goods, along with Zimbabwe.
The UK Order enters into force on 26 February 2018. We advise insurers, reinsurers and financial institutions that work with or otherwise have an interest in Venezuela to carefully review the above sanctions. Should have any questions, feel free to contact our Sanctions team in Caracas: