The capture and arrest of de facto President Nicolás Maduro by US special forces in Caracas marks a seismic moment for companies conducting cross-border business in Venezuela’s energy sector. While global headlines have focused on political tensions, long-term impact will be shaped by how legal, regulatory, and compliance frameworks evolve for foreign investors, a process likely to remain fraught with risk.
Strong Market Signals Amid Regulatory Uncertainty
President Trump’s statements after Maduro’s capture suggest a deliberate shift in American strategy. Trump has publicly encouraged large-scale US investment to “fix the badly broken infrastructure” and “start making money” in Venezuela’s oil sector. The immediate market response—rising energy indices and a fall in global oil prices—reflects optimism about renewed access to Venezuelan resources.
Yet the change in political leadership does not instantly resolve compliance and operational risks embedded in a jurisdiction as historically fraught as Venezuela. Lessons from other sanctioned markets make clear that statutory reform and regulatory clearance routinely lag behind political events, and robust legal analysis remains necessary at every stage of market entry.
Sanctions Remain a Central Compliance Consideration
Despite Maduro’s removal, Venezuela remains targeted by a complex array of US and multilateral sanctions. The Office of Foreign Assets Control (OFAC) continues to generally prohibit dealings involving Venezuelan government entities and state-owned enterprises, enforce blocking sanctions on individuals and other entities, and designate foreign persons involved in the Venezuelan oil sector. In December 2025 the European Council renewed EU sanctions, including asset freezes and travel bans, for one year pending “tangible progress in human rights and the rule of law in Venezuela.”
Shifts in government do not always lead to immediate sanctions relief. Companies entering or re-entering Venezuela should continue to exercise caution from a sanctions perspective. This could include (i) conducting sanctions screenings on counterparties and third-party intermediaries (including their ownership) to help mitigate the risk of inadvertently engaging with restricted parties in breach of US sanctions or export controls, and (ii) embedding appropriate compliance representations, warranties, and undertakings in agreements. Enforcement risk, including under sanctions, export controls, anti-bribery law, and anti-money laundering law, remains material and can persist for up to ten years with respect to sanctions. To read more about navigating sanctions and export controls in high-risk jurisdictions, see our prior post here.
Legacy Contracts and Retroactive Exposure
Even unambiguous political transitions leave the status of pre-existing agreements unresolved. In Venezuela, historic expropriations and contract terminations have left foreign oil companies facing long-term uncertainty, with disputes from decades ago still before courts and arbitral tribunals. Early reports from Venezuela indicate continuity with the Maduro regime under the acting president, although certain concessions seem likely given the Trump administration’s demands in the energy sector. While any new government may attempt to revive or renegotiate contracts, legal certainty will remain elusive, and companies must evaluate both the validity and continuity of previously-negotiated arrangements under Venezuela’s new government.
The risk of successor liability is pronounced: businesses may inherit disputes, arbitral awards, or regulatory exposures originating under the Chavez and Maduro presidencies. Businesses in Venezuela must implement strategies to mitigate retroactive exposure, structuring new contracts for enforceability across local and international jurisdictions.
Risk of Civil Liability under the Anti-Terrorism Act
Beyond uncertainty in contracts, risk also arises from the recent designation of several Venezuelan criminal organizations as foreign terrorist organizations (FTOs), with whom any financial interaction may result in civil liability under the Anti-Terrorism Act (ATA) and criminal liability for providing material support to an FTO. To read more about this unique and expanding area of dispute risk, read our blog post here.
Conclusion: Diligence Is Non-Negotiable
While Venezuela’s potential opening to foreign investment is historic, the underlying legal landscape—anchored by sanctions compliance, contract enforceability, operational risk, and dispute management—remains complex and rapidly evolving.
Freshfields' LATAM team advises international clients on a broad spectrum of cross-border matters throughout the region, drawing on deep experience and multilingual capabilities across both civil law and common law jurisdictions. We work closely with local firms to deliver coordinated, commercially focused advice in key industries including energy, infrastructure, and finance. Our team will continue to monitor developments and engage with clients on navigating compliance, contracts, and dispute risk in Venezuela and other high-risk jurisdictions.
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This blog post is part of an ongoing series exploring the legal, commercial, and strategic complexities of operating in conflict zones and high-risk jurisdictions. Contributors to this series include Freshfields attorneys Timothy Harkness, Nabeel Yousef, Timothy Howard, Kate Cooper, Joshua Kelly, Sylvia Noury, Alexandra van der Meulen, Carsten Wendler, Matthew Haggans, Piusha Bose, Maria Slobodchikova, Paige von Meheren, Andrew Bulovsky, Jackson Myers, Heather Cameron, Elischke de Villiers, Keian Razipour, Omeed Askary, Paloma Palmer, and Jordan McGuffee. Stay tuned for upcoming posts, and please reach out with topics, questions, or experiences you’d like us to cover as part of this ongoing conversation.
