Nynas exit US sanctions
US Office of Foreign Asset Control lifts sanctions against Nynas following corporate restructuring
THE US Treasury Department’s Office of Foreign Asset Control (OFAC) announced this week that Nynas are no longer being blocked pursuant to the Venezuela Sanctions Regulations.
As a result of a corporate restructuring of the ownership of Nynas AB, sanctions have been lifted and US persons and companies no longer require an authorization from OFAC to engage in transactions or activities with Nynas AB.
‘This means an end to many years of having to carry the unfair burden for a Swedish company of being subject to US sanctions. This led to an increasingly deteriorating financial situation, which ultimately forced Nynas into reorganization at the end of last year,’ said Nynas president Bo Askvik.
‘Our focus now is to successfully end the ongoing reorganization process, and having exited sanctions Nynas will be able to return to normal trading conditions and secure long-term financing.’
US sanctions against Nynas’ 50% shareholder PDVSA, the Venezuelan state-owned oil company, had been eroding Nynas’ profitability since August 2017. Recently, the company had also been stopped from buying crude oil from Venezuela.
The removal of the US sanctions impacting Nynas, which was made possible by a reduction in the ownership share and control of the company by PDVSA, means financing is now available to secure necessary crude oil purchases going forward.
Under the terms of the restructuring, the Venezuelan company has reduced the percentage of Nynas shares it owns to 15%. The 35% divested by PDVSA are now controlled by an independent Swedish foundation.
Since 13 December 2019, Nynas have made good progress with the reorganization process and with the now confirmed statement regarding sanctions relief from the OFAC, both Nynas and their administrators believe that the basis exists for finalizing the reorganization successfully.
Going forward, the Nynas board of directors will have in total nine directors, including one director representing PDVSA, two employee representatives and an independent chairman. The company has also agreed to an ongoing reporting requirement with the OFAC regarding any future changes to its shareholders and board of directors, for as long as PDVSA remain a Specially Designated National (SDN).
‘The situation that Nynas has found itself in due to the US sanctions has placed tough demands on all parties involved, and intolerable pressure on our staff. We are very grateful for the support from our suppliers and customers,’ said Mr Askvik.
‘Our partnerships truly go beyond mere commercial transactions. Our brand is strong, and this is the result of efforts made by all of the loyal and hard-working staff in Nynas. We are now ready to take back our lost market shares, and more.’