The U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned CEIEC (China National Electronic Import-Export Company), a Chinese technology exporter, for its alleged support to the Maduro government in Venezuela. As a result of CEIEC’s addition to OFAC’s Specially Designated Nationals List, all property and interests belonging to CEIEC, or any entity in which it owns a 50% or greater interest—and which are in the United States or in the possession or control of U.S. persons—must be blocked and reported to OFAC.
According to OFAC, CEIEC has provided software, training, and technical expertise to the government of Venezuela since 2017, which has been used to oppress the Venezuelan people. OFAC specified CEIEC’s support to Venezuela National Telephone Company (CANTV), the state-owned telecoms company which provides 70% of internet service in Venezuela, and described CEIEC’s suite of software and hardware that it provided to CANTV as a “commercialized version” of China’s “Great Firewall” system of internet censorship. “The illegitimate Maduro regime’s reliance on entities like CEIEC to advance its authoritarian agenda further illustrates the regime’s prioritization of power over democratic values and processes,” said Treasury Secretary Mnuchin.
OFAC issued Venezuela-related General License 38 (GL 38) on November 30, 2020, authorizing the wind-down of transactions involving CEIEC. According to the related Frequently Asked Question 854 (FAQ 854), GL 38 authorizes U.S. persons to engage in transactions and activities prohibited by Executive Order 13692 (E.O. 13692) that are ordinarily incident and necessary to the wind-down of transactions and activities involving CEIEC, or any entity in which CEIEC owns a 50% or greater interest, until January 14, 2021.
Non-U.S. persons may also wind down transactions and activities with CEIEC without being sanctioned under E.O. 13692, provided that such wind-down activity is consistent with GL 38 and is completed prior to January 14, 2021.
Grant Leach is an Omaha-based partner with the law firm Husch Blackwell LLP focusing on international trade, export controls, trade sanctions and anti-corruption compliance.
Camron Greer is an Assistant Trade Analyst in Husch Blackwell LLP’s Washington D.C. office.