What is the status of the Chevron license? 

Source: OFAC

Since President Trump’s announcement to end General License No. 41 (GL41), numerous legal questions have emerged, primarily as OFAC has not amended GL41. However, OFAC FAQs 1218, dated March 2, has answered many of those questions.  

Here, I give some explanations. 

1. LG41 was issued on November 26, 2022, for six months and is renewable on the first day of each month (Section C). The term “first day of each month” could be interpreted as calendar days rather than business days. Under this interpretation, the GL41 was automatically renewed on Saturday, March 1, for six months, that is, until September 1. Another reading is that the first day of each month refers to business days. If that were the case, the GL41 would be automatically renewed on March 3. 
2. Any renewal of GL41 will not contradict President Trump’s announcement. Even if the license is automatically renewed, OFAC will have the authority to modify it, for example, with the LG41A license. The new license can regulate the cease of the operations covered by GL41, under the original six-month or a shorter period. As has happened with GL44A, it is also rational to expect the regulation of a wind-down period. Following Secretary Rubio’s announcement, the new regulation should apply to other licenses granted by OFAC in the oil and gas industry. 
3. FAQ 1218 clearly indicates that this will be the regulatory strategy implemented by OFAC. In summary, based on this FAQ, these are the decisions that OFAC will make take:

• GL41 and associated licenses will be revoked or terminated, indicating that Chevron and other companies authorized by OFAC can no longer conduct transactions with PDVSA. 

• The licenses’ termination will incorporate a wind-down period, enabling firms to gradually stop operating. Following this period, they must cease operations unless explicitly stated otherwise in the new license, like the exception made with the GL8 initially granted in 2019 for Chevron.