The Office of Foreign Assets Control (OFAC) is a bureau of the U.S. Department of the Treasury that administers and enforces U.S. economic and trade sanctions. Using authorities given mainly by Congress and the President (for example, the International Emergency Economic Powers Act and executive orders), OFAC can legally prohibit or restrict transactions, freeze ("block") property, and penalize individuals, companies, and in some cases foreign governments it determines are involved in activities that threaten U.S. national security, foreign policy, or the U.S. economy (such as terrorism, drug trafficking, or undermining democratic processes).
When OFAC identifies a company or vessel as “blocked property,” any property or interests in that property that are in the United States or in the possession or control of U.S. persons must be frozen: they cannot be sold, moved, paid out, or otherwise dealt in unless OFAC authorizes it. U.S. persons (and many non‑U.S. persons when their transactions touch the U.S. financial system or involve U.S. goods/services) must: • Stop all transactions involving that property; • Report the blocked property to OFAC; and • Avoid providing goods, services, or funds to or for the benefit of the blocked owner. Entities that are 50% or more owned (directly or indirectly) by blocked persons are treated as blocked too, even if not separately named.
The Specially Designated Nationals and Blocked Persons (SDN) List is OFAC’s main public sanctions list. It names individuals, companies, vessels, and other entities that are: • Owned or controlled by, or acting for, targeted governments; or • Designated for activities like terrorism, narcotics trafficking, human-rights abuses, corruption, or undermining democracy. When someone is placed on the SDN List, their property and interests in property that fall under U.S. jurisdiction are blocked, and U.S. persons are generally prohibited from dealing with them unless OFAC authorizes an exception. The list is updated whenever OFAC adds or removes names, and businesses and banks routinely screen customers and transactions against it.
Executive Orders (EOs) 13850 and 13884 are presidential orders that give the legal basis for many Venezuela‑related sanctions: • EO 13850 (Nov. 1, 2018) authorizes blocking (freezing) the property of persons determined by the U.S. government to be operating in specified sectors of Venezuela’s economy (including the oil sector) or otherwise contributing to the situation in Venezuela. PDVSA and the companies in this article are designated under this authority for operating in the Venezuelan oil sector. • EO 13884 (Aug. 5, 2019) broadly blocks all property and interests in property of the Government of Venezuela that are in the United States or controlled by U.S. persons. It effectively imposes comprehensive sanctions on the Venezuelan government and entities it owns or controls. These orders implement U.S. policy to pressure the Maduro government by restricting its access to oil revenue and the U.S. financial system.
PDVSA (Petróleos de Venezuela, S.A.) is Venezuela’s state‑owned oil company and the main source of the government’s export revenue. On January 28, 2019, OFAC designated PDVSA under EO 13850 for operating in Venezuela’s oil sector and added it to the SDN List. The U.S. government stated that this was intended to cut off funds to Nicolás Maduro’s government and support pressure for a democratic transition in Venezuela. Later, EO 13884 further blocked PDVSA as part of the Government of Venezuela.
In this context, a “shadow fleet” (also called a “dark” or “ghost” fleet) is a network of oil tankers that use deceptive practices to move sanctioned oil—such as Venezuelan crude—while trying to avoid detection and sanctions enforcement. Common tactics include frequent changes of ownership and flag, turning off vessel tracking transponders, falsifying shipping documents or cargo origin, and conducting ship‑to‑ship transfers at sea so that the oil’s source is obscured before it reaches buyers. These fleets are used by sanctioned states like Venezuela, Russia, and Iran to keep exporting oil despite formal trade restrictions.
Designated parties can seek removal ("delisting") by filing a written petition for administrative reconsideration with OFAC. Under 31 C.F.R. § 501.807, the person (or their representative) must: • Write to OFAC explaining why they should be removed (for example, that the designation was mistaken, or that the conduct or circumstances that led to designation have changed or ceased); • Provide supporting documents and arguments; and • Respond to OFAC’s follow‑up questions or requests for more information. OFAC reviews the submission, may consult other U.S. agencies, and then either denies the request or decides to remove or modify the listing. Treasury emphasizes that sanctions aim to change behavior, and that OFAC will remove persons from its lists when the legal criteria for designation are no longer met.