OFAC License Attorney
Certain activities that are prohibited under the United States economic sanctions programs may be permitted if an appropriate OFAC license is obtained. The Office of Foreign Assets Control of the U.S. Department of the Treasury issues two types of licenses: general and specific.
Our law firm offers professional support when dealing with OFAC. We’ll help you determine whether a General License suits your needs or if a Specific License from OFAC is required, prepare and submit the necessary documentation, ensure effective interaction with regulatory bodies, and reduce the risk of sanctions. Trust our team of experts to handle your licensing needs, so your business can operate safely and efficiently!
What is an OFAC license?
The Office of Foreign Assets Control (OFAC) is a division of the United States Department of the Treasury responsible for developing and implementing the country’s economic sanctions policy. OFAC identifies individuals, companies, and targeted foreign countries subject to sanctions, blocks their assets, and prohibits or restricts financial and commercial transactions with them.
The goal of OFAC’s activities is to protect the national security goals, foreign policy, and economic interests of the United States by controlling financial flows, access to markets, and restricting resources for those who may pose a threat or engage in illegal activities.
An OFAC license is an official permission that allows for certain transactions that would otherwise be prohibited under existing economic sanction programs. This license regulates interactions with individuals, foreign entities, or countries that are under U.S. sanctions, in exceptional and justified cases.
An OFAC license is required when an organization or individual wants to carry out a transaction that falls under sanction restrictions but has a basis or right to conduct it. Examples of such situations include:
- Conducting financial transactions with individuals or companies included in the Specially Designated Nationals and Blocked Persons List (SDN List);
- Exporting or importing goods, technologies, or services to sanctioned countries;
- Financing humanitarian projects in sanctioned regions;
- Fulfillment of contracts concluded before the imposition of sanctions.
For companies operating in the international market, such licenses allow for legal interaction with foreign entities or partners who may be partially affected by OFAC sanctions restrictions. This provides a certain level of legal protection in the event of audits or regulatory checks.
What Is an OFAC General License?
An OFAC General License is an official authorization that automatically allows for certain types of transactions or activities that fall under sanction restrictions, without the need to submit an individual request. The General License is publicly issued and applies to anyone who meets its conditions.
The OFAC General License is designed to simplify compliance with OFAC sanctions regulations. It allows for the conduct of pre-defined transactions that are normally prohibited under OFAC sanctions but are considered permissible if the conditions of the license are met:
- Conducting humanitarian operations;
- Certain financial transactions with organizations or individuals from sanction lists;
- Provision of educational and research services in sanctioned regions.
To use the general license, there is no need to submit a separate application. However, it’s important to have evidence that your activities comply with the terms of the license:
- A contract or agreement related to permitted activities;
- Documentation confirming the humanitarian nature of the operation (for example, lists of goods or participants);
- Financial statements confirming compliance with transaction terms.
The text of the general license is published on the official OFAC website. It’s important to carefully review the terms to ensure that your activities fall under its scope. Gather all documents that can confirm your activities comply with the terms of the general license. This will help in case of an inspection by OFAC.
What is a Special OFAC License?
An OFAC Specific License is an individual authorization that allows for certain transactions or activities that are prohibited under sanction programs. It is required for operations that are not covered by OFAC’s general licenses.
A special license is required when an individual or legal entity plans to carry out an operation that falls under economic sanction restrictions, but there are special circumstances that justify its necessity.
A special license is issued based on the individual review of an application from a specific applicant, taking into account all the circumstances of the impending transaction. It contains individual conditions and requirements that apply only to a particular applicant or project.
Steps to Apply for an OFAC License
Before starting the process, it’s necessary to determine which license you need. A General License is granted automatically, and there’s no need to submit any applications. If you require a Specific License, proceed to the next steps.
Before applying, it is necessary to prepare all the pertinent information. Here is what to include in the supporting documentation:
- Operation Description: What exactly do you plan to do and why it falls under sanctions?
- Information about the parties involved in the proposed transaction: details about all individuals and organizations involved, including their addresses, contact information, and connections to sanction lists.
- Underlying transaction details: amounts, currencies, bank details;
- Contracts and agreements: copies of all contracts related to the operation;
- Justification: an explanation of why the operation complies with the license conditions or constitutes an exception to the sanctions regime.ng basic information about the client (identification data, legal status, type of activity);
OFAC provides a standard application form, the Application for a Specific License, that needs to be filled out. This form requires relevant information about the applicant: whether an individual or a legal entity, details of the requested transaction, and a justification for the need for a license. The form is available on the OFAC official website or can be requested via email.
After preparing the documents and filling out the form, the application can be submitted through the OFAC online platform (the fastest and most convenient method), via email or regular mail.
After receiving the application, OFAC conducts a detailed analysis of it:
- Verification of the provided documents for compliance with requirements;
- Analysis of involved parties for inclusion in sanction lists (SDN List, SSI List, and others);
- Risk assessment for U.S. national security.
If the application does not contain all the essential information, OFAC may request additional data. In case of a denial, the reasons are provided, and the applicant has the opportunity to submit a revised application.
The review of the application can take from several weeks to several months, depending on the complexity of the case. The license may have a limited validity period. Make sure to renew it if necessary.
Requesting Reconsideration for an OFAC Specific License Denial
If you’re denied a license, don’t lose hope. The OFAC offers the opportunity to appeal their decision by submitting a request for reconsideration. This process allows the applicant to present additional evidence, clarify any disputes, and try to secure license approval.
First and foremost, it’s essential to familiarize yourself with the reason for the denial. OFAC provides written notification of the denial, which could be due to a lack of sufficient evidence presented, the transaction not aligning with sanctioned exceptions, the presence of errors, or incomplete information in the application.
Understand where exactly the problems arose and what evidence or documents can help rectify the situation. Filing an appeal requires preparing an improved statement with additional information and justification.
OFAC does not have an official form for filing an appeal, but it accepts requests for review in writing. It must be submitted within a specified period after receiving a denial notice. Include in your request a cover letter that provides a detailed explanation of the reason for the appeal, references to the case number or previously submitted application. Attach additional documents that support the need for the issuance of a license, as well as corrected or clarified financial and legal information.
Submit your application to OFAC through the online platform, email (preferably with read receipt), or the postal address provided in the denial. The review period can vary from several weeks to months, depending on the complexity of the case.
What are the consequences of not having an OFAC license?
Not having an OFAC license or violating the terms of obtaining one can lead to serious legal, financial, and reputational consequences for individuals and entities. An OFAC enforcement action can also lead to civil or criminal liability depending on the nature of the alleged violations.
Without a license, any actions that violate sanctions regulations are considered illegal. This can lead to significant administrative fines, reaching millions of dollars, or even imprisonment for individuals.
Assets linked to illegal transactions can be frozen. This includes bank accounts, property, and other resources under U.S. jurisdiction.
Companies found guilty of OFAC violations of economic sanctions also risk losing the trust of clients, partners, and investors. Additionally, the absence of an OFAC license and subsequent punishment can lead to the cessation of operations, restricted access to international financial systems, and the loss of contracts with American partners.
How can our OFAC License attorneys help you?
Improper filing of OFAC license applications or violation of sanction regulations can lead to significant fines and even criminal liability. Our OFAC license attorney will help minimize potential legal risks and ensure compliance with all requirements.
An experienced OFAC lawyer can offer professional consultations on licensing issues and sanctions compliance. Our team will help you understand which license you need and how to properly prepare your application. Additionally, our lawyers will compile a complete package of necessary documents, draft the application considering all OFAC laws, and verify the accuracy and completeness of the provided information.
We guarantee thorough completion of the application form, submission of documents within the established deadline, and representation of your interests before OFAC in case of additional inquiries. If your license application was denied, we will prepare a request for reconsideration of the decision and also submit additional evidence to successfully obtain the permit.
Our specialists can also assist your company in reviewing current operations for OFAC compliance and developing strategies to minimize legal and financial risks. We have extensive experience working with OFAC licenses and have successfully helped numerous clients avoid fines and other sanctions.
We develop personalized solutions that take into account your business goals, industry specifics and OFAC regulations. You will receive complete information about the progress of your case and clear timelines for the work to be done.
Contact us right now, to get an initial consultation and discuss the next steps for protecting your interests. We will provide professional support on OFAC-related matters so you can focus on your business without worrying about potential violations.
FAQ
When Do You Need an OFAC-Specific License?
Individuals and organizations planning to engage in activities prohibited under OFAC sanctions programs, but who have a legal basis for exemption, require a special license. This could include humanitarian operations, managing frozen assets, entering into contracts, and more.
Which Transactions or Activities Usually Require an OFAC License?
An OFAC license is required for conducting financial transactions with individuals or organizations on the SDN list, exporting or importing goods and services to sanctioned countries (Cuba, Iran, Myanmar, North Korea, and others). Its also necessary when managing blocked funds or frozen assets under sanction programs, handling humanitarian projects, funding educational programs and scientific research in regions under sanctions.
What Steps Are Involved in Applying for an OFAC License, and How Long Does Approval Take?
Applying for an OFAC Specific License involves several steps. In the document collection phase, information about the requested transaction, details about the involved parties, and financial and legal evidence are prepared. Then, you need to fill out a standard application form with all the details of the operation. The application is submitted through the OFAC online platform, via email, or by mail. The application undergoes a review for OFAC compliance with legislative norms and sanctions policy. If necessary, OFAC may request additional information. A final decision is then made.
How can an attorney help with OFAC licenses?
An attorney can guide you through compliance, prepare applications, and communicate with OFAC. This ensures your transactions meet legal requirements.
Are there exemptions or general licenses for certain transactions?
Yes, OFAC provides general licenses for specific activities like humanitarian aid or travel. These allow transactions without a specific license if conditions are met.
