Venezuela Sanctions: Wind-Down of General License 41 and Introduction of ‘Secondary Tariffs’

The dynamic pace of early policymaking by the new U.S. administration has continued into the spring of 2025, including in the context of sanctions on Venezuela. While Venezuela is not, and has not been, subject to comprehensive U.S. sanctions, applicable restrictions on U.S.-person dealings with the government of Venezuela (including its wholly owned oil and natural gas company Petróleos de Venezuela, S.A. (PdVSA)) have been dynamic under both the previous Trump and Biden administrations.

The current Trump administration most recently took two actions against Venezuela on March 24, 2025. First, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued Venezuela General License (GL) 41B, terminating a U.S. energy company’s license to operate in Venezuela and extending the applicable wind-down period through May 27, 2025.[1] Second, the administration issued a first-of-its kind executive order (E.O.) authorizing the secretary of state to impose “secondary tariffs” — a concept not previously known in U.S. law — on imports into the United States from any country that continues to purchase Venezuelan oil as of 12:01a.m. on April 2, 2025.[2]

Such hardening of measures against Venezuela — and, indeed, against any country that purchases Venezuelan oil and exports goods to the United States — represents a significant shift in the U.S. government’s approach to its dealings with the Maduro regime and strongly suggests that, without significant political change in Venezuela going forward, it will continue to become increasingly difficult for Western parties to do business in Venezuela.

Previous Authorizations Under GL 41

OFAC’s Venezuela sanctions generally prohibit U.S. persons from engaging in transactions or otherwise dealing with the government of Venezuela, including PdVSA. GL 41, issued by OFAC under the Biden administration on November 26, 2022, authorized the U.S. energy company to engage in limited natural resource extraction, preserving that company’s investments in the country while also keeping some crude supply on the world market (a concern as Russian oil became scarce in the immediate aftermath of the Russian invasion of Ukraine). Specifically, GL 41 authorized “all transactions ordinarily incident and necessary” to the operation and management of the company’s joint ventures in Venezuela involving PdVSA, or any entity in which PdVSA owns a 50% or greater interest, that were otherwise prohibited by sanctions. GL 41 included various notable restrictions, including that it did not authorize the sale of petroleum produced by or through those joint ventures for exportation to any jurisdiction other than the United States.

At the time of GL 41’s introduction, OFAC explained that the license reflected the “longstanding U.S. policy to provide targeted sanctions relief based on concrete steps that alleviate the suffering of the Venezuelan people and support the restoration of democracy.” The introduction of GL 41 followed promises by President Maduro’s administration that it planned to reopen discussions on the 2024 elections and resume talks of “a humanitarian agreement focused on education, health, food security, flood response, and electricity programs that will benefit the Venezuelan people.” In addition, following the 2023 Barbados Agreement, the Biden administration granted licenses to American and some other Western companies to resume limited natural resource extraction operations in Venezuela as a “carrot” in exchange for the Maduro regime’s commitment to ensure free and fair elections.

However, during the 2024 Venezuelan presidential elections, when it became clear to the U.S. government that the Maduro regime failed to comply with the terms of the Barbados Agreement, the Biden administration began reassessing and revoking many of the general licenses related to Venezuela’s oil and gas industry.

GL 41B revokes the authorizations granted under GL 41 and extends the applicable wind-down period from a termination date of April 3, 2025, to May 27, 2025.[3] Companies still doing business in Venezuela pursuant to GL 41B must complete wind-down operations by that date or secure a specific license from OFAC. Moreover, consistent with the “get tough approach,” OFAC reportedly has begun terminating specific licenses that previously authorized non-U.S. operators to export oil from Venezuela.[4]  

‘Secondary Tariffs’ on Countries Purchasing Venezuelan Oil

Perhaps more broadly significant is the potential application of “secondary tariffs” to any country’s exports to the United States where that country continues to (directly or indirectly) purchase Venezuelan crude after 12:01 a.m. on April 2, 2025. The new E.O. leaves it up to the secretary of state’s discretion whether to impose such tariffs, so it is not presently clear how often, if at all, this authority will be used to impose such tariffs on offending countries.

The Trump administration has threatened to impose similar secondary tariffs on countries engaging in trade with Russia, which suggests that secondary tariffs may become an economic tool of choice by the new administration. As to Venezuela, the prospect of such secondary tariffs introduces particular additional tariff exposure to China, France, India, Italy, and Spain, which are among the countries with the largest amount of Venezuela crude oil imported.

Policy Environment

The significant and novel tightening of restrictions on transacting with Venezuela and any countries that purchase oil from that country is perhaps unsurprising but nevertheless potentially dramatic. Indeed, during his Senate confirmation hearing in January, Secretary of State Marco Rubio suggested that the United States should reevaluate sanctions waivers for oil companies in Venezuela. Secretary of the Treasury Scott Bessent stated in his own responses to questions from the Senate that he would “consult with President Trump to ensure our economic tools are properly calibrated to address the threats posed by the Maduro regime.” “Secondary tariffs” represent a new and potentially extremely punitive response to these concerns.

Moving forward, the only certainty companies can expect with regard to Venezuela is that the Trump administration will continue to use sanctions, export controls, tariffs, and other economic policy tools to pressure President Maduro, and potentially other U.S. adversaries, to achieve U.S. foreign policy goals. As we have seen in the early months of this administration, and continue to expect in the year ahead, the policy environment affecting U.S. economic relations with any country with which the U.S. has significant disagreements remains extremely volatile — a state of affairs which we expect to continue.[5]