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When is an OFAC License Not Required?
The Office of Foreign Assets Control (OFAC) limits and prohibits the export of goods and services to certain foreign destinations, specific individuals, and companies. It also restricts financial transactions between US banks and those foreign financial institutions where the money originates from a country with whom the US government has a sanction imposed against it, or where the bank itself has been added to one of OFAC's several lists for its support of, or engagement in, activities the US government has determined is against its interests, such as the funding of terrorist activities.
While a sanction may create a blanket restriction, like most rules, there are exceptions. A shipment to a person or company in Sudan for example, may occur where its purpose falls into one of the enumerated exceptions. One such example is that of humanitarian assistance. Similarly, exports of agricultural products are allowed to Iran even though most other transactions are not legal to engage in with that country.
Permissible activities occur under OFAC's general license provisions and under these regulations, no express OFAC permission is required. Of course, some companies prefer to verify its activities are authorized under a general license and may opt to submit a license request to OFAC anyway for such confirmation.
Where an activity is not specifically enumerated as an exception, this is where an application for a specific license must be made. With it, a lawful basis for the transaction must be set forth together with the recitation of the laws to support the proposed activity.
It's critical to understand that until such permission is obtained from OFAC, engaging in that activity would be considered illegal and both civil penalties and criminal liability could result from doing so.
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