In order to transfer assets as a specially designated national (SDN) or to engage in transactions involving an SDN’s blocked assets, it is necessary to obtain a license from the Office of Foreign Asset Control (OFAC). OFAC issues two types of licenses – general and specific – and all license applications must contain information that is specific type of license being sought. Due to the complexities involved in the application process, it is advisable for all SDNs, creditors and other license applicants to seek guidance from an OFAC attorney.
OFAC General Licenses
As explained by OFAC, “[a] general license authorizes a particular type of transaction for a class of persons without the need to apply for a license.” For example, General License No. 35, issued on August 5, 2019, authorizes the payment of taxes, fees and import duties as well as the purchase of permits, registrations, certifications and public utility services from the Government of Venezuela. General License No. 5A, which was updated on October 24, 2019, authorizes various transactions and dealings with Petróleos de Venezuela, S.A. on or after January 22, 2020.
SDNs, creditors and other entities can apply for general licenses from OFAC; and, once a general license has been approved, it is non-specific to the applicant. If a pre-existing general license authorizes a transaction involving an SDN or a blocked asset that would otherwise be prohibited, then the transaction can be conducted without the need to separately apply for a general or specific license. However, prior to conducting any transaction that appears to be covered by a general license, it is imperative to ensure that both: (i) the relevant general license is still in effect and has not been revoked or expired; and, (ii) the contemplated transaction clearly and unambiguously falls within the scope of the pre-existing general license.
OFAC Specific Licenses
In contrast, a specific license, “is a written document issued by OFAC to a particular person or entity, authorizing a particular transaction in response to a written license application.” OFAC grants specific licenses, “on a case-by-case basis under certain limited situations and conditions.”
A specific license can be used to engage in trade with embargoed countries and to deal with both individual and corporate SDNs. OFAC largely has the authority to issue specific licenses upon application; however, various statutes limit the agency’s licensing authority in specific circumstances. Specific licenses are commonly used to obtain authorization for the release of SDNs’ blocked assets, but they can be utilized under various other scenarios as well. Once issued, a specific license authorizes only the transaction or dealings covered in the license application. Unlike general licenses, specific licenses cannot be utilized by other parties, though it may be possible to obtain a specific license that is similar to an existing one issued to another SDN, creditor or other party.
Speak with an OFAC Attorney about Applying for a General or Specific License
Our attorneys assist SDNs, creditors and other parties with general and specific license applications and other OFAC matters in South Florida. If you have questions and would like to speak with an OFAC attorney in confidence, please call 954-928-9568 or contact us online today.