The U.S. Department of Commerce, Bureau of Industry and Security (BIS) has amended the Export Administration Regulations (EAR) to restrict exports to Venezuela of certain items intended for “a military end use or end user.” These changes complement a pre-existing U.S. arms embargo against Venezuela – in place since 2006 – that was imposed because of Venezuela’s failure to cooperate on counterterrorism initiatives.
As stated in the Federal Register notice announcing the new restrictions, since February 2014, the Venezuelan military has been cracking down on anti-government protests through direct violence against protesters and arbitrary detentions. Numerous deaths and injuries have ensued. By undermining democratic processes and institutions, Venezuela’s government constitutes an unusual and extraordinary threat to the national security and foreign policy of the United States.
As a partial response, on July 30, 2014, the U.S. State Department imposed visa restrictions against certain Venezuelan government officials, including members of the Venezuelan military, deemed to have participated or been complicit in human rights violations. Then, on November 7, 2014, BIS introduced the new export restrictions.
As a result, a license is now required to export to Venezuela spacecraft and related items, software, and technology, as well as many other items when the export is for a military end use or end user.
Notably, the definition of “military end user” is quite broad. It includes not only the usual suspects – the army, navy, marines, air force, and national guard – but also some entities, such as the coast guard, national police, and government intelligence or reconnaissance organizations, that may not commonly be considered military bodies.
As so defined, the breadth of the military end user restriction is significant. For example, it could prohibit a U.S. company from exporting certain telecommunications equipment, including operating and maintenance instructions, to Venezuela’s national police.
Previously, BIS imposed similar restrictions on exports to the People’s Republic of China and – quite recently – Russia. The expansion of these restrictions to Venezuela signals the U.S. government’s growing frustration with the regime of Venezuelan President Nicolás Maduro, and it opens the door to further restrictions on trade with Venezuela in the future. If the United States’ policy toward Russia is any indication of what is to come, Venezuela soon could face additional sanctions targeting specific transactions, persons, entities, and industries.
Earlier this year, in fact, bills were introduced in both the U.S. Senate and House of Representatives (available here, here, and here) seeking more substantial sanctions against Venezuela. The bills sought visa denials and asset blocking for persons found to have committed certain acts against the Venezuelan people, including perpetrating or facilitating human rights violations; transferring weapons and sensitive technology used to commit such violations; or censoring or limiting access to print or broadcast media. In addition, one of the House bills encouraged efforts to lessen petroleum imports from Venezuela in order to reduce profits used to fund the Maduro regime.
The screws are tightening on Venezuela, with increasingly significant repercussions for U.S. companies doing business in the country and/or with Venezuelan entities or individuals. Any companies or individuals shipping U.S. origin goods to Venezuela should consider revisiting their end-use and end-user statements, and reevaluating their overall diligence process. In light of the new export restrictions, a comprehensive compliance policy could be the difference between a hefty export fine and no penalty at all.