OFAC License Attorney
Adhering to sanction measures is strategically vital for the long-term sustainability of businesses, ensuring legal compliance and minimizing potential financial risks. In this context, the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury plays a central role in regulating international business and u.s economic sanctions and trade operations. OFAC enforces sanction measures aimed at protecting U.S. national security and foreign policy interests, administering 37 different sanction programs that cover various countries, regimes, and activities, thereby limiting economic relations and otherwise prohibited transactions with entities subject to U.S. sanctions.
Trade and economic sanctions and restrictions by OFAC can significantly impact the operations of any international company. Violating the rules of the Office of Foreign Assets Control threatens substantial fines, account freezes, and reputational losses. To confidently conduct business and avoid risks, entrust the resolution of OFAC licensing issues to professionals.
Our law firm specializes in assisting clients in the field of U.S. sanctions legislation. We provide a full range of services: from initial analysis and document preparation to direct filing of applications and interaction with regulators. The team of experts has many years of experience working with multinational corporations, financial institutions, and private investors, ensuring a deep understanding of the industry and the specific requirements of OFAC.
What is an OFAC General License?
A General License from OFAC is an official authorization document issued directly by OFAC and automatically applies to an unlimited number of individuals and companies (unlike individual licenses, which are issued to a specific applicant for specific operations).
A general license permits certain types of operations or transactions that under normal circumstances, without such permission, could be considered a violation of the U.S. sanctions regime.
The main purpose of the general license is to facilitate lawful commercial and humanitarian activities. The sanctions regime is often shaped by political, economic, and human rights factors, and not all operations in OFAC sanctioned countries must or can be completely prohibited. The general license allows:
1. Do not interrupt critically important supplies (food, medicine, humanitarian goods);
2. Maintain access to essential services: communication, internet, financial transfers for the household needs of the population;
3. Ensure the functioning of diplomatic missions, international organizations, and other essential structures;
4. To promote the maintenance of stability in international relations when a complete ban on cooperation would be impractical or contradict humanitarian interests.
General licenses issued by OFAC can vary significantly in scope and content. Depending on the type of sanctions regime and the political objectives of the United States, OFAC may issue the following types of licenses:
Humanitarian licenses
Regulate money transfers by private individuals, payment for communication services or educational programs. Allow banks and payment systems to interact with individuals or organizations under sanctions, if it does not contradict the declared policy of the USA.
Licenses in the field of IT and communications
They allow the use and provision of services in the areas of telecommunications, the internet, and information technologies, promoting the free exchange of information and communications. Aimed at supporting freedom of speech, access to information, and technological progress in countries under sanctions.
Licenses for diplomatic and consular missions
Ensure the safe and continuous operation of official foreign missions and representations of international organizations.
Separate sectoral licenses
They may cover the oil and gas industry, agriculture, air transportation, and other areas where a complete ban would be counterproductive or cause excessive harm to the economic interests of the parties.
OFAC Specific License
A specific OFAC license is a permissive document issued by OFAC to a particular individual or organization for conducting a certain operation that falls under the sanctions regime. Unlike a general license, which applies to an unlimited range of persons and situations, a specific license is addressed to an individual applicant and contains detailed conditions under which specific activities become legal.
A special license allows companies and individuals to conduct specific transactions or engage in activities that would otherwise be prohibited or subject to significant penalties without such permission.
Since general sanctions often impose broad restrictions, a specific license is designed to provide a flexible approach: within its framework, OFAC reviews individual requests, assesses risks, and potential public benefit.
Obtaining a special license is usually accompanied by the obligation to report transactions or activities to OFAC. This allows the American regulator to monitor compliance with conditions and make adjustments if necessary.
What is an application for obtaining an OFAC license?
Before submitting an application for a special license, it is necessary to conduct a preliminary analysis. Determine whether it is possible to use a general license that might already permit similar operations. If not, prepare the reasoning and documents to justify an individual request.
As a rule, the OFAC application status is checked. It is necessary to provide information about the applicant, the nature of the business, the proposed transaction, counterparties, and ultimate beneficiaries.
It is important to detail exactly what actions are planned, within what timeframes, with what amounts, and in which currency. Be sure to indicate why you believe the operation does not contradict the interests of the United States and does not pose risks (for example, does not finance prohibited activities or individuals included in sanction lists).
Prepare all relevant agreements, contracts, invoices, information about counterparties, etc. The documents must be in the original or with a proper translation. Financial reports, corporate documentation, licenses, etc., must also be attached.
To submit an application, the following documents must be provided:
- Charter documents of the company (certificate of registration, charter, founding agreement);
- Contracts or agreements regulating the proposed transactions, as well as an explanatory note on the conditions;
- Financial statements (audit reports, balance sheets) to confirm the legality of sources of funds and overall financial condition;
- Data on counterparties: copies of registration documents, information about shareholders and owners, information about beneficiaries;
- History of activities: confirmation that the applicant or their partners are not involved in violations of sanction regimes.
OFAC employees may request additional clarifications or require the submission of additional documents. If the application is approved, the applicant is issued a special license specifying conditions and restrictions. For example, this may include the validity period, reporting obligations, limits on amounts or counterparties. In case of denial, OFAC provides an explanation or justifies the reasons. If necessary, the applicant can revise the document package and resubmit the application.
To increase the chances of a positive response from the regulator and avoid fines for non-compliance with sanction regulations, it is important to properly prepare documents and effectively establish communication with OFAC. Our company is ready to provide comprehensive support at all stages of the special license acquisition procedure and ensure the successful implementation of international business initiatives.
How to check an OFAC license?
General licenses of OFAC are published on the official website of the U.S. Department of the Treasury and are available for general use. To check if your operation is covered by the action of a general license, go to the official OFAC website (OFAC Sanctions Programs and General Licenses). Find the “General Licenses” section and select the required sanctions program.
Familiarize yourself with the terms of the license and ensure that your activities fall under its scope. If you are unsure whether the license applies to your situation, it is recommended to consult a lawyer specializing in sanctions law.
If your counterparty claims to have a special OFAC license, it is important to verify its authenticity and validity. To do this, request a copy of the license from them. It should include the name of the organization and the applicant’s name, the unique license number, a description of the permitted operations, the license’s validity period, as well as any restrictions or conditions of use.
It is possible to contact OFAC directly to verify the authenticity of the license by sending an official request via email to the OFAC Licensing Division (E).
Even if the license is genuine, it is important to ensure that it actually covers the intended transaction. For example, if a license is issued for humanitarian supplies but is used for commercial trade, this may result in fines and transaction blocking.
If you have questions about an OFAC license check or need assistance with your OFAC license application status, contact our lawyers right now! We will provide full legal support and protect your business from potential risks and sanctions.
Countries under OFAC sanctions and their impact on licensing
Iran was included in the sanctions lists due to the development and financing of its nuclear program, support for terrorist organizations, and widespread human rights violations. The sanctions are largely comprehensive; most commercial and financial transactions with Iranian companies and individuals are prohibited.
For cooperation with Iranian counterparties, in most cases, a special OFAC license is required, especially when it comes to the supply of technologies, equipment, and financial transactions.
North Korea was included in the sanctions list due to its nuclear and missile programs, authoritarian regime, and violations of international agreements. American individuals and legal entities are prohibited from engaging in any financial and commercial relations with North Korean entities.
Obtaining a specific OFAC license is extremely difficult, and most operations are under an absolute ban. In some cases, specific general licenses are in effect for humanitarian projects.
Syria came under sanctions due to a prolonged political crisis, human rights violations, financing, and support of terrorist groups. A wide range of restrictions was imposed on financial, oil and gas, trade operations, and technology transfers.
A special or general license is required for humanitarian supplies (food, medical goods, internet services).
Cuba was included in the OFAC sanctions list due to longstanding political disagreements with the United States, including issues of democracy and human rights. Historically, it is one of the longest-standing U.S. sanctions programs, with significant restrictions on trade and financial operations.
Some types of trips and transactions are allowed under general licenses (for example, cultural and educational exchanges), but most business operations usually require individual authorization.
Venezuela fell under sanctions due to a high level of corruption, massive human rights violations, and a prolonged political crisis. Type of sanctions: mainly sectoral restrictions (oil production, state banks), as well as personal sanctions against high-ranking officials and state structures.
Confirmation is required that the transactions do not involve state-owned companies or individuals included in sanction lists. For certain operations, a specific OFAC license may be needed.
Consequences of the absence of an OFAC license?
Individuals conducting prohibited operations without an OFAC license may face significant administrative penalties. The maximum civil penalty for violating sanctions law is up to $356,579 per each separate violation. In some cases, the penalty amount may be equivalent to double the amount of the illegal transaction if it exceeds the established limit. Penalties depend on the severity of the violation, the nature of the transaction, and the degree of involvement of the violator.
In addition to civil penalties, intentional and systematic violations of sanction prohibitions are subject to criminal liability. Violating sanction legislation with intent can lead to imprisonment for up to 20 years. The fine for individuals can reach up to $1 million for each violation. Legal entities can be fined up to $10 million.
In the absence of an OFAC license, companies and individuals may face the blocking of their funds and assets. Banks and financial institutions subject to U.S. law may freeze accounts and suspend transactions if they find that operations are conducted in violation of sanctions. Additionally, assets used in criminal activities may be confiscated.
Organizations that knowingly or systematically circumvent sanction requirements may themselves be added to the SDN list, which effectively makes them inaccessible to the international financial system. Such companies cannot conduct business with American companies or use dollar transactions. Their assets in the United States and affiliated banks will be frozen. International partners may refuse cooperation to avoid secondary sanctions.
OFAC Licensing Attorney
When entering international markets, companies inevitably face U.S. sanctions legislation. Violating sanction regulations threatens asset freezes, substantial fines, and reputational losses. That is why it is important to entrust licensing matters to experienced specialists who know all aspects of sanction programs and ways to comply with them legally.
An OFAC licensing attorney is a specialist who navigates the complex U.S. sanctions legislation and helps companies obtain the necessary permits to conduct business under sanctions. The lawyer will analyze the specific situation, assist in determining the required type of license, and competently prepare the application to avoid rejections or lengthy delays during the review of documents by the regulator.
We collaborate with multinational corporations, financial institutions, startups, and non-profit organizations, backed by practical cases of varying complexity.
Our attorneys provide clients with the following services:
- Consultations and audit: we will analyze your activities for sanction risks, determine whether your counterparties and transactions fall under restrictions;
- Licensing strategy: selection of the optimal type of license, development of an action plan to minimize risks and time costs;
- Preparation and submission of documents: collection and verification of all necessary documentation (contracts, registration certificates, financial statements, etc.), drafting a reasoned application to OFAC and a cover letter describing all details of the requested transaction;
- Interaction with OFAC: responses to inquiries and clarifications that the regulator may request, support, and representation of your interests at all stages of the application review process;
- Post-licensing support: monitoring compliance with the conditions specified in the obtained license, assistance in preparing reports, training company employees on the basic rules of sanctions legislation to avoid further violations.
Our team of OFAC licensing attorneys is ready to handle all legal formalities related to the preparation and issuance of the license, as well as the verification of your counterparties and financial transactions. We will help find the optimal path within the framework of sanctions legislation, providing high-quality consultations and protecting your interests before U.S. regulators.
Contact us right now to receive an initial consultation and determine the necessary steps for successful work in the conditions of international business. We are ready to become your reliable guide in the world of international law and sanctions regulation.
OFAC Licensing FAQ
Transactions or activities that involve sanctioned countries, entities, or individuals typically require an OFAC license. This may include trade, financial transactions, travel, or the provision of certain services involving the sanctioned parties.
An OFAC licensing lawyer can help your organization by assessing whether a license is required, preparing a persuasive application, navigating the licensing process, and providing expert guidance on compliance with sanctions laws.
The process involves submitting a detailed application to OFAC, including relevant documentation and justification for the proposed transaction. The response time varies depending on the complexity of the request and OFAC's workload, ranging from a few weeks to several months.
Yes, OFAC provides exemptions and general licenses for certain types of transactions or activities. These cover specific situations or categories and may allow parties to engage in otherwise prohibited transactions without applying for a specific license.
An OFAC licensing lawyer can help by conducting an internal investigation to identify potential violations, advising on remedial actions, preparing voluntary self-disclosures to OFAC, and representing clients in enforcement actions, if necessary.
