OFAC Licensing: General vs Specific Licenses and How to Apply

OFAC licensing is how the Treasury Department’s Office of Foreign Assets Control lets you carry out a transaction that U.S. sanctions would otherwise prohibit. There are two kinds. A general license is a standing authorization published by OFAC that anyone meeting its conditions can rely on, with no application. A specific license is a written permission OFAC issues to a named party for a named transaction after you apply for it. Figuring out which one applies to your situation is the first question, because the answer determines whether you can move today or wait months for a decision.

When a General License Is Enough

A general license authorizes an entire category of transactions across a sanctions program. You do not apply, and OFAC does not send you a document. The authorization lives in the Code of Federal Regulations at 31 C.F.R. Chapter V, on OFAC’s website, or in the Federal Register, and if your activity fits its terms you may proceed. OFAC’s policy is to deny specific license applications for transactions already covered by a general license.¹

Common categories include humanitarian exports of food, medicine, and medical devices to sanctioned regions, non-commercial personal remittances to family members, telecommunications and internet-based communications, and certain legal services.² Each general license is tied to a specific sanctions program. A humanitarian general license for Afghanistan does not carry over to a different country.

Because a general license is self-executing, the compliance burden is entirely yours. Deviate from the written conditions and the protection disappears, turning what looked like a lawful transaction into an apparent violation. This is where most trouble starts: someone reads the title of a general license, assumes they qualify, and misses the fine print about which banks can process the payment or which end uses are excluded.

OFAC regulations require full and accurate records of every transaction subject to a sanctions program, whether conducted under a general license or otherwise, kept and available for examination for at least 10 years.³ Some general licenses add their own reporting requirements, and missing those deadlines can nullify the authorization entirely.¹

If the regulatory language is ambiguous as applied to your facts, you can ask OFAC for interpretive guidance through the same online portal used for license applications.⁴ It is not a license application; it is a formal reading of the rules against your specific transaction, and it is worth the wait when the alternative is guessing.

When You Need a Specific License

A specific license is a written authorization OFAC issues to a particular person or entity for a particular transaction, in response to a written application.⁵ You need one when your activity is prohibited by sanctions and no general license reaches it.

The scope is strictly limited to what the license describes. It names the parties, describes the transaction, and sets an expiration date. Doing anything outside those terms is itself a violation. Specific licenses are not transferable; another party cannot rely on your license for a similar deal. OFAC keeps full discretion to grant, deny, or condition any request based on current foreign policy priorities, and it can require periodic reporting on the authorized activity in whatever form and at whatever intervals the license spells out.⁶

OFAC can also amend, modify, or revoke a specific license at any time.⁶ Sanctions programs move quickly, and a license issued today can be narrowed or pulled tomorrow if the policy landscape shifts.

Screen the Parties First

Before spending time on an application, run every party to the transaction through OFAC’s free Sanctions List Search tool. It checks names against the Specially Designated Nationals (SDN) List and the Consolidated Sanctions List, using fuzzy matching that catches close spellings and phonetic similarities rather than only exact hits.⁷

The default name score of 100 returns only exact matches. Lowering it broadens the results and reduces the chance of missing a near-match. OFAC does not recommend a specific threshold; the right setting depends on your risk tolerance and compliance practices.⁷ One limit worth knowing: the tool searches only the current lists, not historical versions, so a name that used to be listed and has since been removed will not show up as a past hit.

If you get a close match, OFAC advises checking whether the name is an exact or very close match and whether the counterparty is in the same general area as the listed party. When similarities are strong, contact OFAC’s compliance hotline before going further.⁸

What Goes in a Specific License Application

A specific license application asks for detailed information on everyone involved. Provide legal names, physical addresses, and roles for the primary applicant, any intermediaries, financial institutions, shipping companies, and the ultimate end users of any goods or services. Describe the goods, services, or funds precisely, including dollar values and any relevant technical specifications.

Identify the sanctions program that applies before you start, since different programs have different evidentiary standards and different general licenses that might already cover the activity.⁴ Include a cover letter with a complete factual narrative explaining the purpose of the deal and why an exception is warranted, together with supporting documents such as identification, invoices, and contracts.⁹

Flag any time-sensitive dates up front, such as a court-imposed deadline or a date tied to medical treatment. If you have already spoken with anyone at OFAC or another government agency about the transaction, include that contact information.⁹ Explain how the transaction does or does not fit any relevant general license, so OFAC does not spend time analyzing a path you have already ruled out.

Every field must be accurate. False information on a federal application is a crime under 18 U.S.C. 1001, punishable by up to five years in prison.¹⁰ Keep copies of everything you submit.

How to File

Applications go through the OFAC Licensing Portal at licensing.ofac.treas.gov. You upload the forms and supporting documents directly. There is no filing fee. If the portal is unavailable, you may mail a paper application to the Office of Foreign Assets Control, Licensing Division, U.S. Department of the Treasury, 1500 Pennsylvania Avenue NW, Freedman’s Bank Building, Washington, DC 20220.¹ Do not send applications by email or through any site other than the official portal.⁹

When you submit, the system issues a tracking number. That confirms your application is in the queue and says nothing about the likely outcome. Processing time depends on the complexity of the transaction, the extent of interagency coordination required, and the volume of similar applications already pending.¹¹ OFAC does not publish a standard timeline, and waits often run longer than applicants expect.

During review, an OFAC analyst may email or send a letter requesting more information. Respond by the deadline OFAC sets, or the agency may close your case without further notice. If your transaction has a hard external deadline, the quality of the initial submission matters even more, because a complete application is less likely to trigger follow-up requests that eat into your timeline.

Renewals and Denials

Every specific license has an expiration date. If the authorized activity will continue past that date, submit a renewal request 60 to 90 days before the license expires, with updated facts and documentation reflecting any changes since the original grant.⁹ Letting a license lapse and continuing the transaction exposes you to the same penalties as operating without a license at all.

A denial is not necessarily the end. You or any other party with an interest in the transaction can request reconsideration at any time, but the request has to rest on new facts or changed circumstances; disagreement with OFAC’s judgment is not enough.⁶ Reconsideration requests go through the same OFAC License Application Page as originals.⁴ You can also file a fresh application if the underlying transaction has changed enough to warrant a new review.

What Getting It Wrong Costs

Enforcement reaches violating a prohibition, acting outside the scope of a license, and attempting or conspiring to violate the rules. Civil penalties under the International Emergency Economic Powers Act can reach the greater of $250,000 per violation or twice the transaction amount at the statutory baseline, with inflation adjustments pushing the effective ceiling above $377,000 per violation.¹²¹³ Willful violations can be prosecuted criminally, with fines up to $1,000,000 and up to 20 years in prison. OFAC can pursue civil penalties and refer the same conduct for criminal investigation at the same time. The statute of limitations for both is 10 years from the date of the violation.

Thorough records are your main defense if OFAC ever looks at your transactions. Document exactly how each transaction fit within the terms of the applicable license, and keep those files for the full 10-year retention period the regulations require.³

1
eCFR. 31 CFR 501.801 – Licensing
2
U.S. Department of the Treasury. Selected General Licenses Issued by OFAC
3
eCFR. 31 CFR 501.601 – Records and Recordkeeping Requirements
4
U.S. Department of the Treasury. OFAC Specific Licenses and Interpretive Guidance
5
U.S. Department of the Treasury. OFAC Frequently Asked Questions – 74
6
eCFR. 31 CFR Part 501 Subpart E – Procedures
7
U.S. Department of the Treasury. How to Search OFAC’s Sanctions Lists
8
U.S. Department of the Treasury. Specially Designated Nationals (SDNs) and the SDN List
9
U.S. Department of the Treasury. Quick-Reference Guide: License Applications
10
Office of the Law Revision Counsel. 18 USC 1001 – Statements or Entries Generally
11
U.S. Department of the Treasury. OFAC Frequently Asked Questions – 77
12
Office of the Law Revision Counsel. 50 USC 1705 – Penalties
13
eCFR. 31 CFR Appendix A to Part 501 – Economic Sanctions Enforcement Guidelines – Section: V. Civil Penalties