Many of the initial authorizations key to the US government’s efforts at a controlled reopening of the Venezuelan energy, petrochemical and minerals sectors required contracts with the Government of Venezuela, Petróleos de Venezuela, S.A. or other covered Venezuelan entities to be governed by US law and subject to enforcement in US courts.
On June 10, 2026, the US Department of Treasury’s Office of Foreign Assets Control (OFAC) issued guidance explaining, and amended versions of the general licenses (GLs) containing, that requirement, FAQ 1260 and GLs 46C, 47A, 48B, 50B, 51B, 52A, and 54A. FAQ 1260 clarifies that the US law requirement means that the laws of a state or other jurisdiction within the United States must govern “questions of contract law between the parties relating to the contract, including interpretation, contractual performance obligations, breach, contractual remedies, payment obligations, termination, validity, assignment or novation and enforceability of the contract.” It does not, however, preclude contracts from recognizing or incorporating applicable mandatory Venezuelan regulatory and administrative requirements. OFAC specifically noted that parties may abide by local legal requirements such as permits, concessions, labor obligations, environmental requirements, and health and safety regulations without violating the licenses’ US governing law condition.
OFAC also expanded the list of permissible dispute resolution venues beyond the United States to include the United Kingdom, France and Singapore. And, if the parties agree to submit to arbitration, the procedural rules applicable are those rules agreed by the parties, the rules of internationally recognized institutions, or the rules of the seat of arbitration. Given that many standard form international contracts commonly include dispute resolution provisions specifying one of these jurisdictions, these changes may help ameliorate any perception of a “legal land grab” associated with the initial requirements.
