A merican Club Circular No. 23 / 21 1 OCTOBER 26, 2021 CIRCULAR NO. 23/21 TO MEMBERS OF THE ASSOCIATION Dear Member: SANCTIONS REFRESHER: VENEZUELA AND CUBA Venezuela This Circular provides information and guidance in conjunction with General License 40 issued by the United States, which authorizes certain transactions involving the exportation or re-exportation of liquified petroleum gas (LPG) to Venezuela. Under Executive Order (EO) 13850 (November 2018), as amended by EO 13857 (January 2019), and under the Determination Pursuant to Section 1(a)(i) of EO 13850 (January 2019), US persons are prohibited from engaging in any transaction involving any person who operates in the oil sector of the Venezuelan economy as determined by the Secretary of the Treasury, in consultation with the Secretary of State. Since August 2019, under EO 13884, US persons are prohibited from engaging in any transaction involving the Government of Venezuela. The definition of the Government of Venezuela is broad, according to section 6(d) of the EO 13884, and includes Petróleos de Venezuela, S.A. (PdVSA) and “any person owned or controlled, directly or indirectly, by the Government of Venezuela, and any person who has acted or purported to act directly or indirectly for or on behalf of, any of the foregoing.” In addition, PdVSA is also listed as a Specially Designated National, and therefore, US persons or persons subject to U.S. jurisdiction are prohibited from dealing with it. There are exceptions to the above-mentioned prohibitions, expressed through General Licenses (GL), the most relevant of which is GL 10A (August 2019). According to GL 10A, US persons in Venezuela are authorized to purchase refined petroleum products for personal, commercial, or humanitarian uses from PdVSA or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest. Nevertheless, this GL does not authorize any commercial resale, transfer, exportation or re-exportation of refined petroleum products. In July 2021, the US Treasury Department issued GL 40 with effect through July 8, 2022. Under GL 40, all transactions and activities related to exportation or re-exportation, directly or indirectly, of LPG to Venezuela, involving the Government of Venezuela, PdVSA, or any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest, are now authorized. This GL does not authorize any payment-in-kind of petroleum or petroleum products, or any transaction or activity otherwise prohibited by the Venezuela Sanctions Regulation, prohibited by any other part of 31 CFR chapter V, or involving any blocked persons other than PdVSA, any entity in which PdVSA owns, directly or indirectly, a 50 percent or greater interest, or any Government of Venezuela person that is blocked solely pursuant to EO 13884. As has been clarified by the US Treasury Department, for purposes of GL 40, the term “liquefied petroleum gas” refers to the definition provided by the US Energy Information Administration, namely a group of hydrocarbon gases, primarily propane, normal butane, and isobutane, derived from crude A merican Club Circular No. 23 / 2 1 2 oil refining or natural gas processing. These gases may be marketed individually or mixed. They can be liquefied through pressurization (without requiring cryogenic refrigeration) for convenience of transportation or storage. The definition excludes ethane and olefins. While General Licenses apply to US persons and activit