Does the requirement in certain Venezuela General Licenses (e.g., [46C](https://ofac.treasury.gov/media/935661/download?inline), [47A](https://ofac.treasury.gov/media/935666/download?inline), [48B](https://ofac.treasury.gov/media/935671/download?inline), [50B](https://ofac.treasury.gov/media/935676/download?inline), [51B](https://ofac.treasury.gov/media/935681/download?inline), [52A](https://ofac.treasury.gov/media/935686/download?inline), and [54A](https://ofac.treasury.gov/media/935691/download?inline)) that the terms of contracts be construed and interpreted in accordance with the laws of a state or other jurisdiction within the United States mean that U.S. law must govern all aspects of the underlying activity?
OFAC's answer
No. Certain Venezuela general licenses (GLs) require that any contract for transactions authorized by the GL with the Government of Venezuela or certain other covered entities (e.g., Petróleos de Venezuela, S.A. in [GL 52A](https://ofac.treasury.gov/media/935686/download?inline) or CVG Compañía General de Minería de Venezuela CA in [GL 51B](https://ofac.treasury.gov/media/935681/download?inline)) specify that the terms of the contract be construed and interpreted in accordance with the laws of a state or other jurisdiction within the United States. The GLs also require dispute resolution proceedings relating to the contract or its breach to occur in the United States, the United Kingdom, France, or Singapore. If the parties agree to submit their dispute to arbitration, the procedural rules applicable are those rules agreed by the parties, or the rules of internationally recognized institutions or the rules of the seat of arbitration. This 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. The requirement permits the inclusion of contract terms that recognize that certain aspects of the underlying activity in Venezuela may be subject to applicable Venezuelan law and regulations, including laws and regulations governing the exercise of Venezuela’s sovereign regulatory authority, administrative permits and licenses, concessions, labor, environmental, health and safety, and other mandatory regulatory requirements.