On March 12, 2020, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) designated TNK Trading International S.A. (TNK Trading), pursuant to Executive Order 13850 (Blocking Property of Additional Persons Contributing to the Situation in Venezuela), for operating in the oil sector of the Venezuelan economy.
OFAC designated Rosneft Trading S.A. (as described in our previous client alert, “The United States Designates Rosneft Trading”), another Swiss-based subsidiary of the Russian state-owned oil major, Rosneft Oil Company (Rosneft), on February 18 for the same reason and pursuant to the same executive order. In its designation of TNK Trading, OFAC noted that Rosneft Trading S.A. transferred its allocated cargoes of Venezuelan oil to TNK Trading in an attempt to evade U.S. sanctions.
These actions are largely intended to convince the Kremlin and Russian companies to end their support for Venezuela’s oil sector, which the U.S. has sanctioned in order to deny funds and resources to the Maduro regime. Rosneft’s subsidiaries play an important role in Venezuela’s oil sector. TNK Trading and Rosneft Trading S.A. handled a large percentage of Venezuela’s oil exports in 2019, and in January 2020, TNK Trading purchased nearly 14 million barrels of crude oil from Venezuela’s state-owned energy company, Petróleos de Venezuela (PdVSA).