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An OFAC license may be needed if the business you want to do, or even a particular transaction, is subject to US sanctions. The Office of Foreign Assets Control (OFAC) of the US Department of the Treasury is the main US agency that oversees the implementation of US sanctions. OFAC is authorized both to make independent decisions on the imposition of new sanctions and to coordinate the work of other US agencies on adopting and implementing US sanctions.
What is an OFAC License? General and Specific licenses
An OFAC license is an authorization issued by the Office of Foreign Assets Control of the US Department of the Treasury (OFAC) to carry out a specific activity or individual transaction that would be prohibited without such a license. The license can be general or specific.
The general license is permission to carry out a specific type of transaction. For example, OFAC general licenses No. 6, 6A, and 6B, enacted from February to July 2022, authorize certain exports and re-exports of agricultural commodities, medicines, medical supplies, medical equipment, and software.
The specific license is an authorization for a specific transaction issued to an individual or company. To obtain such a license, one must apply to OFAC with a corresponding request in a particular form.
How to Get an OFAC License?
To do business under the general license, you do not need to apply for it. The general licenses are published on the OFAC website. You must ensure you comply with all the terms of а particular general license. As for a specific license, to obtain it, you need to submit a corresponding application to OFAC, justifying your need for a specific transaction and attaching the necessary documents in support of your petition.
While reviewing your petition, OFAC will contact other US government agencies to determine the appropriateness of such a license and coordinate the interagency position. When considering a specific license, OFAC may request additional documents or information, ask specific questions, or take other action indicating the start of a negotiation process on this issue. Your chances of a positive outcome of such an event will increase if you have an experienced American lawyer to help you correctly substantiate and formalize your application. We can accompany you at every stage of the negotiation process with OFAC , providing qualified legal assistance and consulting support.
Can I Appeal an OFAC License Denial?
A specific license is issued through a special administrative process. There is no provision for an administrative appeal against OFAC’s refusal to issue a license. However, there were cases when OFAC reconsidered its position and, despite the previous refusal, subsequently issued a specific license. This may be in the event of changed circumstances or due to new crucial information that was not known when considering applying for a specific license.
The OFAC general and specific licenses are powerful tools to keep your business running successfully in the challenging environment of US sanctions. If you need a specific license or advice on general license terms, please contact us . We will help you better understand the current situation and will represent your interests in OFAC if needed.