The arrest of Nicolás Maduro Moros, and subsequent developments in US legal and sanctions policy concerning Venezuela, have renewed global attention on the country’s economy, particularly its oil sector. A superseding indictment unsealed in the US District Court for the Southern District of New York charging Maduro and other Venezuelan senior officials with narcotics and corruption offenses, together with the US Treasury’s issuance of Venezuela General License No. 46 authorizing certain previously prohibited oil-related transactions and President Trump’s encouragement of US investment in the country’s oil sector, have fueled expectations that US and international companies will return to Venezuela after years of sanctions-driven disengagement. Although limited in scope, General License 46 signals an incremental shift in US policy towards permitting commercial activity in areas long restricted under the sanctions regime.
While recent developments have centered on the energy sector, their implications extend far beyond oil and gas. Any sustained relaxation of sanctions is likely to affect a range of industries, including logistics, infrastructure, aviation, financial services, hospitality, telecommunications, and professional services, as companies evaluate whether, and how, to re-enter the Venezuelan market. For many, the potential opportunity is accompanied by complex operational, reputational, and regulatory considerations.
As companies assess the prospect of renewed engagement, it is critical to recognize that sanctions relief does not eliminate broader legal risk associated with operating in Venezuela; a risk that takes several forms:
- Venezuela has long been associated with systemic corruption. Its state-owned enterprises, most notably Petróleos de Venezuela, SA (“PDVSA”), have featured prominently in US Foreign Corrupt Practices Act enforcement actions involving bribery, money laundering, and illicit financial schemes. For example, in September 2020, a US asphalt company pled guilty in the US District Court for the Eastern District of New York and agreed to pay a $16.6 million criminal fine to resolve the case arising from its role in conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act after admitting that it paid millions of dollars in bribes to officials in Brazil, Ecuador, and Venezuela, including multiple PDVSA officials, to secure contracts to sell asphalt to state-owned oil companies. While the US may have captured a de facto leader of a corrupt regime, the broader leadership and industry management structures remain in place and will continue to present substantial corruption risk for companies engaging in commercial activity in Venezuela.
- Companies considering re-entry into Venezuela must confront significant compliance risks that extend beyond traditional bribery and corruption concerns. As US enforcement priorities have increasingly targeted transnational criminal organizations, who the US government has designated as Foreign Terrorist Organizations, or FTOs, certain Venezuelan gangs, including the Tren de Aragua and the Cartel de los Soles. These designations carry broad statutory consequences under US law, including prohibitions on providing “material support” to an FTO. Such prohibitions expose companies to civil and criminal liability under statutes such as the Anti-Terrorism Act, and do not recognize defenses based on coercion or extortion. Companies operating in or sourcing from Venezuela must therefore carefully assess relationships, supply chains, and counterparties to avoid inadvertent engagement with individuals or organizations designated as FTOs or otherwise linked to terrorist or criminal activity.
- Companies operating in Venezuela must confront supply-chain vulnerabilities and the heightened regulatory scrutiny associated with operating in a high-risk jurisdiction. Exploration and production companies will likely need substantial capital and supplies to rebuild infrastructure and restore operations, while service companies, including oilfield services firms, may be able to re-engage more quickly due to lower capital exposure. However, both must still navigate regulatory uncertainty, counterparty risk, and the complex compliance challenges inherent in operating in Venezuela.
Companies exploring opportunities in Venezuela thus should move forward cautiously and take a close look at who they are doing business with in what remains a high-risk market. Even as restrictions are relaxed, engaging with individuals or entities linked to corruption, financial crime, or organized criminal activity can create significant reputational, operational, and legal exposure, including potential civil and criminal liability under anti-corruption and anti-terrorism statutes.
Companies should conduct thorough investigative due diligence on counterparties, intermediaries, and supply-chain partners, including beneficial ownership analyses and screening for political or criminal exposure. Investigators will need to take into account the fact that in Venezuela, restricted access to reliable information frustrates traditional open source and public records research. Over the past two decades, government control and closure of independent media outlets, intimidation of journalists and opposition figures, and limited publication and transparency of official government data have significantly reduced the availability of trustworthy public information. Independent reporting has been constrained and access to reliable information is limited, complicating efforts to verify counterparties and business relationships.
These challenges are further compounded by structural limitations in public registries and corporate recordkeeping. Many government and commercial records are kept on paper. Digitization efforts have lagged, and formal record-retention practices have historically been inconsistent, resulting in incomplete or outdated corporate, property, and litigation records. As a result, concurrent with open-source research, effective risk mitigation often requires deeper investigative capabilities, including in-country insight and vetted human intelligence networks capable of identifying risks that may not appear in public sources. Combining these capabilities with financial and forensic analysis of transactions and vendor relationships is critical to addressing both anti-bribery and anti-corruption exposure and potential liability under statutes such as the Anti-Terrorism Act.
Venezuela remains a complex environment in which to conduct business. Accordingly, companies should seek the assistance of experienced investigative firms, those with access to reliable data and established networks of confidential sources capable of identifying potential red flags in a timely manner. Strengthened internal compliance controls, continuous monitoring, and early risk assessment are essential to navigating a complex and evolving operating environment.
