- U.S. Treasury split payment channels for oil activities between local fees and revenue-linked taxes.
- Revenue-based assessments like royalties require deposit into FGDF or other Treasury-directed accounts.
- Operators must immediately update invoicing and documentation for the 2026 tax year compliance.
(VENEZUELA) — U.S. Treasury has tightened the payment “plumbing” for OFAC-licensed Venezuelan oil activity, drawing a bright line between local operating charges that can be paid in-country and revenue-linked government take that must be routed into U.S.-controlled deposit accounts.
The change is effective as of the early-February 2026 licensing and guidance package, including GL 46A and Treasury FAQ guidance issued in that same window. Current as of Friday, February 20, 2026, these rules matter immediately for contract administration and invoice processing. They also shape tax year 2026 accounting and documentation (returns filed in 2027) for U.S. companies, U.S. workers on assignment, and cross-border contractors.
At the center of the shift is a payment-channel distinction Treasury is enforcing through OFAC general licenses:
- Local taxes, permits, and fees tied to day-to-day operations may be paid directly to Venezuelan government counterparts under specified licenses.
- Royalties, oil and gas taxes, fixed per‑barrel levies, and similar revenue-based assessments must be deposited into Foreign Government Deposit Funds (FGDF) or other Treasury-directed accounts, rather than paid to sanctioned parties.
1) Overview of the policy shift: what changed, and why Treasury cares
In practical terms, Treasury is allowing operations to continue while controlling cash proceeds that function like government revenue. That is why the rules separate:
- (a) Local operating charges: municipal permits, local fees, and similar charges needed to keep facilities running.
- (b) Revenue-linked payments: royalties, federal oil and gas taxes, per‑barrel levies, and look-alike assessments tied to production or sales value.
For U.S. operators, this affects daily workflows:
- Invoicing: whether an invoice line is a “permit fee” or a “royalty” changes the permitted payment channel.
- Approvals: payables teams must verify which bucket a charge falls into.
- Counterparties: the same government-related counterparty may be paid directly for one category, but not another.
- Documentation: classification support needs to be audit-ready for sanctions compliance and tax substantiation.
⚠️ Warning: Don’t assume a charge is “local” because it is billed locally. Labels can be misleading. Classify by the charge’s legal and economic character.
Before/After: payment routing for government-related charges
| Topic | Before the early-February 2026 clarification | After GL 46A + Treasury FAQ clarification (early February 2026) |
|---|---|---|
| Local operating taxes/fees | Often treated cautiously, sometimes delayed pending sanctions review | May be paid directly to Government of Venezuela/PDVSA-related entities when tied to authorized activity |
| Royalties and oil/gas taxes | Sometimes handled inconsistently across operators | Must be deposited into FGDF or other Treasury-directed accounts, not paid to sanctioned parties |
| Fixed per‑barrel levies | Frequently treated like a tax and paid with other charges | Treated as restricted and routed to FGDF |
| Invoice processing | Case-by-case, higher escalation volume | Requires formal triage and documentation of each payment line item |
2) Authorized payments under GL 46A: what it allows, and what it does not
GL 46A is designed for certain established U.S. participants engaging in authorized Venezuelan-origin oil activities. “Authorized oil activities” generally cover operational steps such as:
- lifting, exporting, selling, storing, and transporting Venezuelan-origin crude or petroleum products, and
- U.S. goods, technology, and services that support exploration, development, or production, when covered by the relevant authorization.
Scope matters because payment authorization tracks the underlying activity. If a payment supports an authorized activity, it may be eligible for the “local taxes/fees” carve-in.
What GL 46A generally permits (payment-wise):
- Direct payment of local taxes, permits, or fees to Government of Venezuela or PDVSA-related entities, when connected to authorized oil activity.
- The rationale is continuity of lawful operations, such as port charges or municipal permits.
What GL 46A carves out from direct payment:
- Royalties
- Oil and gas taxes
- Fixed per‑barrel levies
- Similar revenue-linked assessments, even if the underlying activity is otherwise authorized
The practical consequence is simple: these carved-out categories require FGDF routing. Treat them as a distinct workflow, with different instructions and sign-offs.
For tax year 2026 recordkeeping, separate these buckets in your general ledger. It can affect how foreign taxes are supported for U.S. tax purposes. Corporations typically document foreign tax positions on Form 1118. Individuals may use Form 1116. Substantiation standards still apply.
IRS reference points for international tax substantiation and filing mechanics include Publication 519 and IRS international guidance pages, even though sanctions compliance is not administered by the IRS. See IRS resources on international taxpayers and forms and publications.
3) Payments to FGDF and restricted categories: what “deposit routing” means
Foreign Government Deposit Funds are Treasury-controlled deposit mechanisms used when direct payment to sanctioned persons is restricted. When a payment must go to FGDF, the operator does not “pay the government” in the ordinary sense. The operator deposits the funds into the designated, controlled channel.
Categories that must be deposited include:
- Royalties
- Oil/gas taxes
- Fixed per‑barrel levies
- Other payments that function like government revenue participation
Why these are treated differently: they are directly tied to production value or volume. Treasury’s posture is that these payments resemble proceeds, not operating friction costs.
Operational steps finance teams should implement immediately:
- Payment instructions control: require treasury-approved wiring templates for any FGDF deposits.
- Line-item classification: split invoices so each line is coded to “local operating” or “revenue-linked.”
- Escalation path: if an invoice mixes categories, hold and escalate before release.
- Audit trail: keep contracts, tax assessments, and legal citations supporting classification.
This matters for contractors too, including shipping and trading intermediaries. UAE-based traders or service providers may sit in the chain for cargo movement or support services. Your controls should confirm who is paid, for what, and through which channel. That helps avoid downstream sanctions and accounting issues.
4) Treasury FAQ clarification: how to use it without over-reading it
Treasury FAQs function as interpretive guidance. They help explain how Treasury reads terms and categories. They do not, by themselves, create new authorization beyond the general licenses.
Use the FAQ clarifications to:
- confirm whether an activity fits within the two main licensing buckets (oil exports/sales/storage/transport, and U.S. goods/services supporting upstream activity),
- classify counterparties and check whether they are covered or blocked, and
- identify transaction features that trigger heightened review, such as vessel restrictions, export limitations, or non-cash consideration.
If you treat FAQ language as an “expansion,” you risk making a payment outside the license. That is a compliance failure even if the commercial deal looks routine.
5) How GL 46A compares with GL 48 and GL 49
The licensing package works as a set of lanes, not one broad permission slip. In general terms:
| License | Practical purpose | Who typically relies on it | What to watch for in contracts and governance |
|---|---|---|---|
| GL 46A | Ongoing authorized Venezuelan-origin oil activity for certain established U.S. entities | U.S. operators and affiliates meeting the license conditions | Payment routing split remains central: local fees direct; royalties/levies/taxes to FGDF |
| GL 48 | Investment or restructuring pathway subject to conditions and approvals | Firms pursuing new structures or approvals | Governance terms, U.S. law/dispute resolution conditions, and disciplined payment classification |
| GL 49 | Similar investment/operations authorization with conditions for U.S. entities/subsidiaries | U.S. groups using subsidiary structures | Same routing logic; ensure subsidiary payables follow the same controls |
Even when a license permits a deal structure, the payment-channel rules still decide how government-related charges must be handled.
For readers tracking U.S. reporting and documentation around cross-border operations, the IRS’s Publication 519 is a helpful baseline for residency and filing status questions that come up for assignees and noncitizen staff.
6) Why Treasury tightened the channels: context that affects your compliance plan
These updates follow Venezuela’s political transition and hydrocarbons law reforms. Treasury is also responding to trader-mediated sales and the practical reality that proceeds can move quickly across borders.
For compliance teams, the “why” matters because it signals what may change next:
- tighter definitions of permitted counterparties,
- more detailed reporting expectations, and
- further license refinements for new investment activity.
That makes change management part of your controls. Set a cadence for:
- monitoring OFAC updates and Treasury FAQs,
- coordinating legal, finance, shipping, and trading teams, and
- refreshing invoice templates, coding rules, and approval matrices.
📅 Deadline Alert: For tax year 2026 (filed in 2027), set your documentation file now. Reconstructing payment classifications after year-end is costly and error-prone.
Recommended actions and timeline (tax year 2026; returns filed 2027)
- Immediately (Q1 2026): Update payables rules to split local operating fees vs. royalties/levies/taxes and require FGDF routing where required.
- Within 30–60 days: Re-paper invoice requirements with vendors and government-facing intermediaries. Require line-item detail and legal basis for each charge.
- Before year-end 2026: Reconcile all government-related payments to a classification log. Tie each entry to the license basis and payment channel.
- During 2027 tax prep: Provide the classification log to tax advisors. Confirm treatment for foreign tax documentation (for example, Form 1118 for corporations, Form 1116 for individuals) and disclosure alignment.
⚠️ Disclaimer: This article is for informational purposes only and does not constitute tax, legal, or financial advice. Tax situations vary based on individual circumstances. Consult a qualified tax professional or CPA for guidance specific to your situation.
