Liberating Limits: OFAC Licenses

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) safeguards national security and helps advance U.S. foreign policy objectives by administering the U.S. sanctions regime. OFAC’s general and specific licenses serve as key mechanisms for authorizing and regulating certain transactions that would otherwise be prohibited under sanctions programs. The exceptions provided by licenses help businesses and individuals navigate international transactions without violating U.S. sanctions policies.

General Licenses

General licenses authorize a particular type of transaction without needing to apply for a specific license each time. One common example of an OFAC general license is the authorization for the exportation of certain humanitarian goods or services to sanctioned countries, authorizing provision of essential supplies such as food, medicine, and medical equipment to populations in need, even in countries subject to U.S. sanctions. These general licenses strike a balance between enforcing sanctions and ensuring that the humanitarian needs of affected populations are addressed. OFAC has issued general licenses to assist in humanitarian aid delivery in even the most comprehensively sanctioned countries, including Iran and Syria. General licenses can also support specific U.S. foreign policy or national security objectives. General licenses serve as a practical means to lighten the compliance load for entities involved in certain activities and can be repealed at OFAC’s discretion.

• OFAC issued several licenses in October 2023 providing partial sanctions relief to Venezuela in exchange for promises to hold free and fair elections in the country in 2024. The licenses authorized transactions involving Venezuela state-run metals company Minerven and the country’s state-owned oil company Petróleos de Venezuela, SA (PDVSA), among others. OFAC in February 2024 reimposed some sanctions that were suspended by the October General Licenses in response to the country’s top court upholding a ban blocking the candidacy of Venezuela’s leading opposition hopeful this year.
• In February 2023, OFAC issued general license 23 (GL 23) to provide humanitarian aid to those affected by the February 6 earthquakes that affected southern Türkiye and northern Syria. GL 23 authorized for 180 days all transactions related to earthquake relief that would otherwise be prohibited by the Syria sanctions program. Although U.S. sanctions programs do not restrict humanitarian assistance, GL 23 was a way to expand on humanitarian exemptions already in effect and help facilitate speedier assistance to earthquake victims.

Specific Licenses

Specific licenses serve as individualized permissions granted by OFAC for specific transactions or activities that would otherwise be prohibited under U.S. sanctions programs. Unlike general licenses, which apply broadly to categories of transactions, specific licenses are tailored to meet the unique circumstances of a particular case. Obtaining a specific license involves submitting a detailed application to OFAC and outlining the specifics of the proposed transaction and the compelling reasons for granting authorization for these transactions. A specific license may be granted for facilitating business negotiations with a company in a sanctioned country. If a U.S. entity or individual intends to engage in a transaction restricted by sanctions but believes the transaction would serve U.S. national interests or align with U.S. foreign policy objectives, they can pursue a specific license. This typically involves presenting evidence of how the transaction would support U.S. diplomatic efforts and regional stability or detailing other compelling justifications for exemption from the sanctions framework. This tailored approach enables OFAC to carefully assess the merits of each case, considering factors such as national interest, diplomatic efforts, or contributions to regional stability. As a result, special licenses strike a balance between enforcing sanctions and addressing exceptional situations, ensuring that legitimate and justifiable transactions can proceed without undermining the broader objectives of U.S. sanctions policies.

• In December 1996, Cargill, a U.S. manufacturer involved in agricultural sales to North Korea, applied for a specific license authorizing it to conduct sales that were otherwise not permitted under any general licenses. Cargill obtained a specific license from OFAC that allowed the company to sell food products—mostly grains—to North Korea.
• In 2022, OFAC encouraged persons seeking to export items to Iran or conduct other activities in support of internet freedoms in Iran to submit a specific license application to OFAC. A senior Treasury Department official in a briefing stated that OFAC will expedite these specific license applications in an effort to facilitate access to information for the Iranian people, support their right to freedom of expression, and help them resist repressive Internet censorship and surveillance in the aftermath of the death of Mahsa Amini and consequent protests.

OFAC normally does not publish specific licenses, and a FOIA request is required to reveal the information they contain because they’re individualized authorizations.

Understanding licenses, what activities they authorize, and the process for applying for a license to ensure no violations occur is essential for compliance, mitigating compliance risks, and supporting U.S. foreign policy goals. DOLFIN’s chapters on U.S. Jurisdiction and on Types of Sanctions can provide additional insights into licenses and exemptions that can be critical to compliance efforts.