The "BOLIVAR Act" prohibits U.S. executive agencies from contracting with entities that conduct significant business with the Venezuelan government under Nicolás Maduro, with exceptions for humanitarian aid, national security interests, or if the entity has a valid license from the Office of Foreign Assets Control.
Rick Scott
Senator
FL
The BOLIVAR Act prohibits U.S. executive agencies from contracting with entities that have significant business operations with the Venezuelan government under Nicolás Maduro, which is not recognized by the U.S. government. Exceptions are provided for humanitarian aid, national security interests, supporting U.S. government activities in Venezuela, entities with valid licenses, and operation of U.S. diplomatic missions. The Secretary of State may waive the prohibition if it is in the U.S. national interest. This prohibition is set to last for three years after the enactment of the Act.
BOLIVAR Act Proposes 3-Year Ban on U.S. Contracts for Firms Doing Business with Maduro Regime
This bill, officially titled the 'Banning Operations and Leases with the Illegitimate Venezuelan Authoritarian Regime Act' or BOLIVAR Act, aims to prevent U.S. executive agencies—think federal departments like Defense or Homeland Security—from awarding contracts to companies knowingly engaged in 'significant business operations' with the current Venezuelan government under Nicolás Maduro, which the U.S. does not recognize. This prohibition, outlined in Section 2, would apply to contracts initiated within a three-year window following the bill's enactment and requires the Secretary of State's agreement on which companies fall under the ban.
Drawing a Line on Deals
The core idea here is to use the U.S. government's purchasing power as a foreign policy tool. Section 2 broadly defines 'business operations' as essentially any commercial activity. If a company, whether U.S.-based or international, is deemed to be conducting 'significant' business with the Maduro government or its related entities, it could become ineligible for U.S. federal contracts. What constitutes 'significant' isn't explicitly defined in the text, which could create uncertainty for businesses with any level of engagement in Venezuela. The requirement for the Secretary of State to concur adds another layer to the decision-making process for applying this restriction.
Exceptions and Off-Ramps
It's not an absolute ban, though. Section 2 carves out several important exceptions. Contracts essential for humanitarian aid, disaster relief, urgent life-saving efforts, or evacuating non-combatants to Venezuela are permitted if the Secretary of State determines they are necessary. There are also exceptions for activities deemed vital to U.S. national security interests, contracts supporting official U.S. government functions within Venezuela (like maintaining diplomatic facilities), and work done by international organizations. Companies already holding a valid license from the Treasury Department's Office of Foreign Assets Control (OFAC) to operate in Venezuela are also exempt. Furthermore, the Secretary of State holds the authority to waive the entire prohibition on a case-by-case basis if doing so is deemed in the 'national interest,' provided Congress is notified.
Real-World Ripples and Red Tape
The practical effect could be significant for companies operating in sectors like energy, finance, or technology that have ties to Venezuela, potentially forcing them to choose between Venezuelan operations and U.S. government contracts. Even with the exceptions, the ambiguity around 'significant business operations' might cause companies with even minor Venezuelan dealings to shy away from U.S. contracts to avoid risk. For U.S. federal agencies, implementing this adds a compliance step: vetting contractors for Venezuelan business ties before awarding contracts, which could mean more administrative work. The three-year duration suggests this is intended as a time-limited pressure tactic rather than a permanent policy shift.