Photographer: Noah Friedman-Rudovsky/Bloomberg

Treasury Says Investors Can Go to Caracas, With Lots of Caution

  • Securities to be discussed at Nov. 13 meeting not restricted
  • Bondholders must avoid dealings with sanctioned individuals

Investors weighing whether to meet with Venezuelan officials in Caracas next week to discuss a restructuring of the nation’s debt can proceed provided they do so with extreme caution, according to the U.S. Treasury Department.

A spokesman for the Treasury, which has lobbed a series of sanctions against the South American country, said there are no restrictions on U.S. investors attending the Nov. 13 meeting in Caracas because it pertains to securities that aren’t covered by existing measures. But due to the expected participation of sanctioned individuals, including Vice President Tareck El Aissami, who’s leading the talks, and acting Finance Minister Simon Zerpa, bondholders must not engage in any transactions or dealings with them.

That means investors can’t enter into any contracts signed by those individuals, negotiate with them, provide them any services, or process any transaction, directly or indirectly, on their behalf. Regardless, the sanctions prohibit investors from buying new debt if it has a maturity longer than 30 or 60 days, depending on the issuer, so investors wouldn’t be able to take part in a restructuring unless it’s authorized by Treasury.

The sanctions apply to all U.S. citizens and permanent residents regardless of where they’re located, all people and entities within the U.S., and all U.S.-incorporated entities, as well as their foreign branches. The penalties for violating sanctions may include up to 30 years in prison and fines of as much as $10 million.

— With assistance by Brendan Murray

    Before it's here, it's on the Bloomberg Terminal.