Sanctions Carve-Out

A sanctions carve-out (also called an exemption, exception, or general license, depending on the jurisdiction) is a clause inside a sanctions instrument that permits a defined category of activity which would otherwise be blocked. Carve-outs are how policymakers reconcile the coercive purpose of sanctions with competing legal obligations under international humanitarian law, the UN Charter, and human rights treaties.

Carve-outs typically cover:

• Humanitarian assistance — food, medicine, medical devices, and relief supplies.
• Personal remittances and basic living expenses for designated individuals.
• Diplomatic and UN operations, including payments to maintain missions.
• Energy or commodity flows deemed essential to global markets (for example, certain oil price-cap mechanisms).
• Legal fees, insurance, and wind-down activity for pre-existing contracts.

At the multilateral level, the most consequential recent example is UN Security Council Resolution 2664 (2022), which established a cross-cutting humanitarian carve-out across all UN sanctions regimes, allowing the provision of funds and goods necessary for humanitarian assistance by the UN, ICRC, NGOs, and their implementing partners. It was a notable shift from the prior practice of regime-by-regime exemptions.

At the national level, the U.S. Treasury's Office of Foreign Assets Control (OFAC) issues general licenses that function as carve-outs — for example, general licenses authorizing agricultural and medical exports to sanctioned jurisdictions, or wind-down licenses following new designations. The EU uses analogous derogations in its Council Regulations.

Carve-outs are contested in practice. Critics point to over-compliance and de-risking by banks and shippers, who often refuse legitimate humanitarian transactions despite the legal exception, citing reputational and secondary-sanctions risk. Supporters argue carve-outs are essential to prevent sanctions from causing the civilian harm they are meant to avoid. For MUN delegates, the drafting question is usually: how broad, how automatic, and how reviewable the carve-out should be.