OFAC Licence | OFAC Lawyers for UK Clients

The Office of Foreign Assets Control (OFAC) is an office of the U.S. Department of the Treasury that administers and enforces economic and trade sanctions based on U.S. foreign policy objectives and national security goals. These sanctions target foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to U.S. national security.

For UK businesses, OFAC regulations are particularly relevant because they affect access to international markets and certain transactions :

OFAC acts under the president’s national emergency powers and authority granted by specific legislation to impose controls on transactions and freeze assets under U.S. jurisdiction. That includes blocked funds and potential asset freezes, which can directly affect British businesses and individuals.

The OFAC jurisdiction encompasses a broad range of activities and entities that may be subject to checks and sanctions, including blocked persons and specially designated nationals. UK businesses and individuals particularly affected include:

Among the sanctions that serve as important tools of U.S. foreign policy are country-based sanctions, smart sanctions, sectoral sanctions, and secondary sanctions, as well as those related to agricultural commodities and medicine. Understanding these sanctions programs, especially in terms of humanitarian aid, is crucial for UK compliance.

Country-based sanctions are imposed on specific nations, prohibiting unauthorised operations within them. Countries currently subject to comprehensive sanctions include Cuba, Russia, Iran, North Korea, and Syria.

It should be noted that sanction programmes are dynamic and change based on the political situation, affecting certain services. Country-based sanctions are typically accompanied by sanctions against specific individuals and companies. As a result of economic sanctions by OFAC, assets of Russian organisations and individuals, amounting to tens of millions of dollars, have been frozen, significantly impacting UK-Russia trade relations.

Targeted sanctions are designed to prevent specific threats to national interests and are particularly aimed at countering terrorism, international organised crime, human rights violations, and other specific activities, including medical devices. For instance, OFAC has imposed sanctions on North Korean hacking groups that have targeted British institutions, complicating the process of authorizing transactions.

Sectoral sanctions are targeted at specific sectors of a country’s economy and restrict business activities in certain industries, as outlined by U.S. sanctions laws. In particular, sanctions have been imposed against the Russian energy sector, affecting UK companies involved in energy trading and investment.

OFAC secondary sanctions hold those who collaborate with violators accountable and can significantly impact UK businesses, which may need to submit multiple applications. Thus, a British oil company could be subject to secondary sanctions and even face criminal charges if it supplies oil to sanctioned countries, as OFAC regulations prohibit authorizing transactions of this nature.

An OFAC licence is a permit issued by OFAC that allows for certain transactions that would otherwise be prohibited. For UK businesses, understanding the OFAC licence system and the OFAC-specific license application process is essential for maintaining lawful international operations. The licence can grant the right to enter into contracts with sanctioned companies.

What is an OFAC general licence? This is a question many UK businesses ask when facing sanctions issues. An OFAC general licence is a type of authorisation, within the broader scope of general licenses, that permits certain categories of transactions without the need to apply for specific permission from OFAC. General licences are published in the Federal Register and on OFAC’s website, providing blanket authorisation for specific types of activities.

What is an OFAC general licence used for?

General licences typically cover routine transactions that serve U.S. policy interests, such as those compliant with international law:

OFAC General Licence 41 is a specific authorisation that is relevant to certain types of transactions, as it relates to general licenses and specific permissions. Different sanction programmes have their own numbered general licences, and understanding which applies to your situation is crucial for compliance.

For UK businesses operating under U.S. sanctions regimes, OFAC general licence 41 or other relevant general licences may provide the authorisation needed for specific activities without the need for a specific license. However, strict compliance with the terms of the general licence is essential when you wish to engage in a transaction.

Given the U.S. sanctions legislation, British individuals, companies, and other legal entities may be subjected to sanctions for various reasons. A common outcome is being added to the OFAC SDN (Specially Designated Nationals) list due to enforcement actions, which can halt business operations entirely. In such cases, an OFAC licence application is required to continue lawful activities.

UK businesses and individuals should consider an OFAC licence application when, under certain circumstances, they are engaging in transactions that might be prohibited.

The OFAC licence creates a legal basis for freely conducting transactions that, without it, otherwise would be prohibited by sanction requirements, particularly involving OFAC licensing.

There are two main types of licences:

The process of obtaining an OFAC licence requires careful preparation and submission of an OFAC licence application with accompanying documents. The steps involved include:

Before submitting an OFAC licence application, lawyers investigate necessary case details, including:

The OFAC licence application must include:

After submitting an OFAC licence application along with supporting materials, the stage of its consideration can be tracked on the OFAC website. The decision-making process depends on OFAC’s workload and can take several months to up to a year.

The solicitors at Intercollegium specialising in obtaining OFAC licence permissions offer a comprehensive range of services for advising and supporting British clients through the OFAC licence application process.

UK businesses and individuals need an OFAC licence to:

Applications for a licence OFAC, which may involve multiple applications, are submitted by individuals and companies that are subject to sanctions restrictions or who wish to engage in transactions that could be classified as illegal transactions and would otherwise be prohibited.

It’s absolutely crucial for British businesses involved in importing or exporting goods to adhere to OFAC regulations. Understanding the difference between an OFAC general licence and specific licence requirements is essential. Ignoring OFAC regulations can lead to serious problems, such as severe penalties due to non-compliance.

Operations that fall under OFAC sanctions primarily involve those connected with states, companies, or individuals listed on the SDN list. Generally, being included on this list indicates that the activities of the person or firm mentioned violate the US sanction policy.

For UK businesses, this means:

Working with sanctioned individuals without a proper OFAC licence is prohibited. Therefore, the assistance of a qualified solicitor who is knowledgeable about OFAC law and can guide you through the OFAC licence application process is of paramount importance.

If you don’t consult an OFAC solicitor in time, the consequences of sanctions enforcement can be serious and may include:

The offender may be held liable under civil or criminal law, with penalties including:

Seeking advice from lawyers who specialise in OFAC sanctions and understand both U.S. and UK legal frameworks, especially in relation to humanitarian activities, can help avoid serious financial repercussions and prevent legal issues from arising, particularly in the context of international relations. The Intercollegium team is steadfastly by your side!

The solicitors at Intercollegium guide British clients through the entire process of obtaining a licence from OFAC, ensuring legal support and protection of clients’ interests. Our OFAC lawyers provide comprehensive services that include support for maritime services related to OFAC compliance:

Many UK businesses ask: What is an OFAC general licence? Accessing the OFAC licensing portal can provide valuable insights into this. Understanding this is crucial for efficient compliance.

An OFAC general licence provides authorisation for certain categories of transactions without requiring individual permission. For UK businesses, this means they may need to apply for a specific OFAC license :

Different sanctions programmes have various general licences. OFAC general licence 41 is one example, but many others are covering:

Even if an OFAC general licence exists, UK businesses may still need to submit an OFAC licence application for a specific licence if:

Removal from the OFAC list is a complex and lengthy process requiring specialist legal expertise. The removal procedure may require changes in operations and organisational structure of the company. Therefore, this process demands:

Given the complexity of the procedure, it’s absolutely crucial to seek out experienced OFAC solicitors. The professional lawyers at Intercollegium will:

If you’ve encountered issues with sanctions imposition or need to obtain an OFAC licence, reach out to our qualified solicitors. The Intercollegium team will investigate your issue and help resolve it.