Licensing: General Licenses, Specific Licenses, and Humanitarian Exceptions
How OFAC general and specific licenses, EU derogations, and UN humanitarian carve-outs authorize otherwise prohibited transactions under sanctions regimes.
The Licensing Function Within Sanctions Regimes
Sanctions prohibitions are drafted broadly and then narrowed through licensing. Under the International Emergency Economic Powers Act (IEEPA, 50 U.S.C. §§1701–1708) and the Trading With the Enemy Act (TWEA, 50 U.S.C. §4301 et seq.), the President delegates licensing authority to the Secretary of the Treasury, who exercises it through the Office of Foreign Assets Control (OFAC). Each OFAC program codified at 31 C.F.R. Chapter V contains a Subpart E ("Licenses, Authorizations, and Statements of Licensing Policy") that creates the regulatory space for otherwise-prohibited transactions. The European Union employs an analogous structure: Council Regulations enacted under Article 215 TFEU contain articles authorizing competent national authorities (e.g., HM Treasury's OFSI in the United Kingdom before Brexit, Germany's BAFA, France's Direction générale du Trésor) to grant derogations. The UN Security Council, when imposing measures under Chapter VII, similarly empowers its Sanctions Committees to grant case-by-case exemptions, as with the 1267/1989/2253 ISIL (Da'esh) and Al-Qaida Committee.
General Licenses Versus Specific Licenses
A general license (GL) is a self-executing authorization published by OFAC that permits a defined class of transactions without an application. The licensee need not notify OFAC in advance; the transaction simply falls within the four corners of the GL. Examples include GL 8 series under the Russian Harmful Foreign Activities Sanctions Regulations (31 C.F.R. Part 587), which authorized energy-related transactions with sanctioned Russian banks through specified expiration dates, and the standing GLs for legal services, emergency medical services, and personal communications across most programs. After the Hamas attack of 7 October 2023, OFAC issued GL 3 under the Global Terrorism Sanctions Regulations authorizing official activities of the U.S. government and certain international organizations in Gaza.
A specific license (SL) is an individualized written authorization issued in response to an application filed via OFAC's Reporting and License Application Forms (RLAF) portal. Applicants must demonstrate that the proposed transaction is consistent with the program's Statement of Licensing Policy. Processing times vary from weeks to over a year; OFAC publishes no statutory deadline. Denials are reviewable only under the deferential standard of the Administrative Procedure Act, as confirmed in Holy Land Foundation v. Ashcroft, 333 F.3d 156 (D.C. Cir. 2003), and Epsilon Electronics v. U.S. Department of the Treasury, 857 F.3d 913 (D.C. Cir. 2017).
The Scope Limitation
Licenses authorize only what they expressly say. OFAC's interpretive guidance and FAQ 74 emphasize that any transaction not within the precise terms of a GL or SL remains prohibited. A license does not protect against private litigation, does not unblock property absent explicit language, and does not authorize transactions involving additional blocked parties not identified in the license. The doctrine of strict construction was applied in United States v. Banki, 685 F.3d 99 (2d Cir. 2012), where the Second Circuit narrowed the personal-remittances GL under the Iranian Transactions Regulations. Practitioners must also distinguish between (i) authorizations that unblock property, (ii) authorizations that merely permit a transaction without unblocking, and (iii) Statements of Licensing Policy that signal favorable consideration but confer no entitlement. The distinction matters: payments routed through correspondent banks rely on the bank's independent compliance review, and a GL that does not unblock will not cause the correspondent to release funds without OFAC confirmation.