Mistyrise v. OFAC: A Judgment Creditor Challenges OFAC’s Venezuela License Denial Under Executive Order 14373
Mistyrise International Limited sued OFAC in the Southern District of New York on October 30, 2026 (No. 1:26-cv-09496). The suit challenges the September 25, 2026 denial of a specific license to collect a $24.5 million New York judgment from blocked Venezuelan funds a state court had twice attached. OFAC relied on Executive Order 14373, General License 58, and a practice of licensing no creditor enforcement after January 3, 2026. Mistyrise’s central claim is textual: E.O. 14373 shields only “Foreign Government Deposit Funds,” and these funds are not that. OFAC is the favorite. The realistic upside is a remand, not a court-ordered license.
What Mistyrise Is Asking the Court to Do
Mistyrise holds $17.1 million of 2008 notes now owed by Corporación Eléctrica Nacional, S.A., a Venezuelan state-owned utility that defaulted in 2018. The New York Supreme Court entered a $24.5 million default judgment in August 2022. It then attached a blocked Ministry of Finance account at Citibank in December 2024 and two Central Bank of Venezuela accounts at the Federal Reserve Bank of New York in August 2025.
Three license applications filed in 2022 and 2023 sat undecided for fifty-three months. A June 2026 delay suit under 5 U.S.C. § 706(1) produced an answer in August and a denial on September 25. According to the complaint, OFAC found, after consulting the State Department, that licensing attachment of Government of Venezuela assets would be inconsistent with current foreign policy and denied without prejudice under 31 C.F.R. § 501.801(b)(5). Mistyrise now seeks vacatur and an order directing OFAC to issue the license.
What Makes This Complaint Unusual
Most APA suits against OFAC attack a designation or delisting denial. This one attacks a license denial, in three unusual ways.
It is a sequel. The delay suit forced a decision within a month of OFAC’s answer. The decision was a denial, and the delay claim survives only to seek a remand deadline.
It is framed as law, not policy. E.O. 14373 bars unlicensed judicial process only against “Foreign Government Deposit Funds,” a term the order defines by custody and source. Whether the attached funds meet that definition is a question a court can decide without second-guessing foreign policy.
It was filed in New York, not Washington, where most OFAC license-review precedent sits.
Where OFAC’s Denial Is Vulnerable
Fit is the strongest point. The Citibank balance sits in a commercial bank account, not a Treasury account, and the denial, as the complaint describes it, makes no finding that the funds derive from natural-resource or diluent sales. Invoking an order the funds do not fit is a legal error, and OFAC cannot supply a new rationale in litigation.
General License 58 is a thin reed. It authorizes advisory services for a potential restructuring of Venezuelan debt and expressly excludes restructuring, settlement, judgment enforcement, and unblocking. Citing it points a creditor to a process that does not exist.
The policy post-dates the applications by years. An agency that changes course must say so and weigh reliance interests. A denial that does not engage the record invites a State Farm challenge; the D.C. Circuit set aside part of an OFAC determination on that basis in Epsilon Electronics.
OFAC has licensed creditor process before. In the Crystallex litigation it issued a May 2023 license for writs of attachment against PDV Holding shares. The denial does not say why this request differs.
Where OFAC Is Strong, and the Odds
The standard of review. Courts call review of OFAC licensing decisions “extremely deferential.” In Zarmach Oil Services, the court upheld OFAC’s refusal to unblock funds after OFAC consulted the State Department, as here.
E.O. 14373 may not be the operative ground. OFAC needs no executive order to deny a license, only a reasoned foreign-policy judgment. If the court reads the denial as resting on current policy, with the order cited as evidence of it, the definitional argument loses most of its force. The FRBNY funds are a weaker case than the Citibank funds: the order names the Central Bank of Venezuela and sets no date limit, so reserves derived from oil sales may qualify.
The remedy. Courts rarely order OFAC to issue a license. The ordinary remedy is vacatur and remand for a fund-specific explanation, which can end in the same denial, better explained.
Our assessment: the denial most likely survives. The realistic win is a remand with a deadline, aimed at the Citibank funds. A court-ordered license is a long shot.
What It Means for Venezuela Creditors and License Applicants
- A delay suit forces a decision, not a license. File one only if a prompt denial is a usable result.
- Build the record around E.O. 14373’s definition: the custody, source, and dates of the funds.
- A denial without prejudice permits a new application under § 501.801(b)(5) on new facts or changed circumstances.
Ferrari & Associates’ Licensing & Authorizations overview explains the information OFAC typically expects in a specific-license request.
Frequently Asked Questions
Can a creditor challenge OFAC’s denial of a specific license in court?
Yes. The decision is final agency action under 31 C.F.R. § 501.802 and reviewable under the APA, but courts give OFAC’s foreign-policy judgments substantial weight.
What are “Foreign Government Deposit Funds” under Executive Order 14373?
Funds held by the U.S. government in designated Treasury accounts, or funds held for the Government of Venezuela, including its central bank and PdVSA, that derive from sales of natural resources or diluents. Section 3 bars unlicensed judicial process against them.