Sanctions Aren’t Always the End
Being sanctioned or affected by sanctions doesn’t necessarily mean total paralysis. In many cases, OFAC licenses allow individuals and companies to continue critical transactions — legally — under specific conditions. These licenses fall into two main categories: General and Specific.
Understanding the difference is crucial if you’re trying to pay legal fees, sell blocked assets, continue limited operations, or simply prove good faith in regulatory negotiations. This article explains how each type of license works, who qualifies, and how to apply.
The Basics: What Is an OFAC License?
An OFAC license is an official authorization granted by the Office of Foreign Assets Control (OFAC) under U.S. sanctions law. It permits a person or entity — even if blocked or associated with a blocked party — to engage in an otherwise prohibited transaction.
There are two main types:
- General Licenses: Pre-issued, broad in scope, automatically available
- Specific Licenses: Issued case-by-case upon request, based on submitted evidence
Each comes with conditions, and violating those terms — even accidentally — can result in civil or criminal penalties.
General Licenses: Pre-Cleared Activities
A General License (GL) is like a standing permission. It allows anyone meeting its conditions to engage in specific types of transactions without needing to apply individually.
Common Examples:
- Legal Fees: Paying U.S. counsel for sanctions-related representation
- Humanitarian Aid: Delivering food, medicine, or disaster relief to sanctioned countries
- Personal Remittances: Sending funds to family members in blocked jurisdictions (within limits)
- Telecom and Internet Services: Access to information platforms, communication software, etc.
General Licenses are published on OFAC’s website. If your situation fits the terms exactly, you can operate under them immediately — but it’s critical to document compliance.
Example Scenario:
A sanctioned individual needs to hire a U.S. law firm. General License D1 may allow payment if the firm’s services are related to representation in sanctions matters. As long as all transactions are recorded and below the threshold, no specific application is required.
Specific Licenses: Custom Authorization
A Specific License is a written document granted by OFAC in response to an application. It permits a particular person or company to engage in a restricted transaction under narrow, pre-approved conditions.
When You Need One:
- Selling blocked property
- Accessing frozen funds to cover basic living expenses
- Completing transactions initiated before a designation
- Continuing operations of a partially blocked company
- Paying judgments, legal settlements, or arbitration awards
This is a formal legal process, and OFAC will conduct a detailed review of:
- The applicant’s identity and role
- The transaction’s purpose
- Potential legal, diplomatic, or humanitarian justifications
- National security and foreign policy implications
How to Apply for a Specific License
The application process involves:
Filing Form OFAC Application for the Release of Blocked Funds or Transactions (or via written legal petition)- Attaching all relevant documents (contracts, ID, legal opinions, business details)
- Providing a narrative explaining the transaction, parties involved, purpose, and urgency
- Waiting for review, which can range from 30–180 days depending on the case
You may receive follow-up questions or requests for clarification. A poorly prepared application often leads to delays or denials — so hiring legal experts in sanctions law is highly recommended.
Navigating the OFAC licensing process requires both technical accuracy and case-specific strategy. Lionel Iruk, Esq., General Counsel at Empire Global Partners, has secured specific licenses for clients facing urgent humanitarian, legal, and business needs — from unblocking corporate funds to facilitating asset transfers. His expertise lies in tailoring license applications that preempt rejection and accelerate approvals in complex sanctions scenarios.
Important Distinctions to Keep in Mind
Feature General License Specific License Need to Apply? No Yes Who Can Use It? Anyone meeting criteria Only applicant(s) approved Processing Time Immediate 30–180 days (or longer) Customizable? No Yes — tailored to individual needs Risk of Violation Moderate (if misinterpreted) High (if conditions aren’t followed)
Mistakes to Avoid
- Assuming general licenses apply broadly, always read the fine print
- Failing to document transactions — even legal ones must be recorded
- Acting before approval — transactions under a specific license must wait until granted
- Ignoring expiration dates or renewal rules
OFAC has revoked licenses in the past for misuse or failure to comply with terms.
Can Licenses Help with Delisting?
Not directly, but applying for and receiving licenses:
- Demonstrates good faith and willingness to comply
- Can support a broader delisting petition later
- Shows commitment to lawful conduct and transparency
For companies, it also allows you to continue partial operations, maintain jobs, and limit reputational damage during the sanctions period.
When Licenses Are Denied
Denials may occur if:
- The transaction benefits a regime or individual deemed a security threat
- The applicant has prior violations
- The explanation lacks clarity or evidence
If denied, applicants can amend and refile or pursue judicial review, though courts generally defer to OFAC unless due process violations are proven.
Final Thoughts
Understanding the difference between General and Specific Licenses is key to surviving and maneuvering through a sanctions regime. While these licenses won’t erase the designation, they provide legal breathing room, protect rights, and allow individuals and businesses to engage in basic and essential operations.
Whether you’re an individual under personal sanctions or a business caught in the crossfire, don’t assume you’re powerless — the U.S. sanctions system includes avenues to operate legally. You just need to know how to use them.
