SanctionsLookupOFAC License Explained
An OFAC license is an official authorization that permits a transaction that would otherwise be prohibited under U.S. sanctions laws. It is issued by the Office of Foreign Assets Control (OFAC), a division of the U.S. Department of the Treasury. An OFAC license allows individuals or organizations to proceed with specific activities in sanctioned countries or involving restricted parties when regulatory conditions are met.
What is an OFAC license?
An OFAC license is a legal authorization that permits a transaction that would otherwise be prohibited under U.S. sanctions regulations. It applies to individuals and entities subject to U.S. jurisdiction, including U.S. persons and businesses operating within the United States.
A license creates a limited exception to sanctions restrictions for a defined activity. It does not remove or suspend the underlying sanctions program, and all conditions stated in the license must be strictly followed.
General vs specific OFAC licenses
OFAC issues two primary types of licenses that authorize transactions otherwise restricted under U.S. sanctions programs.
General license
A general license is a self-executing authorization published in OFAC regulations or on the Department of the Treasury's website. It allows certain categories of transactions to proceed without submitting an application, provided all stated conditions are strictly met. Parties relying on a general license must independently confirm that their activity falls fully within its scope.
Specific license
A specific license is a written authorization issued by OFAC on a case-by-case basis. It requires submitting an application describing the proposed transaction and the parties involved. If approved, the license authorizes only the defined transaction(s) and applies only to the named applicant under the stated conditions.
When and how to apply for an OFAC license
An application for an OFAC license is required when a proposed transaction is prohibited under a U.S. sanctions program and no applicable general license authorizes the activity. Before applying, parties should carefully review the relevant sanctions regulations to confirm that a general license does not already apply.
Applications are submitted through OFAC's online licensing portal and must include detailed information about the proposed transaction, the parties involved, the legal basis for the request, and supporting documentation. OFAC reviews license applications on a case-by-case basis, and there is no guaranteed processing timeline. Review periods can range from several weeks to several months, depending on complexity and interagency consultation. There is no government filing fee to submit an OFAC license application.
With respect to Cuba, many categories of travel are authorized under existing general license provisions, such as certain educational, religious, or humanitarian activities. However, purely tourist travel to Cuba is generally not authorized under U.S. sanctions regulations and does not qualify for a general license.
Role of the OFAC licensing division
The OFAC Licensing Division is responsible for reviewing applications for specific licenses submitted under U.S. sanctions programs. It evaluates proposed transactions, supporting documentation, and legal justifications to determine whether authorization is appropriate.
The Division issues written determinations approving or denying requests and may impose conditions or reporting requirements where a license is granted. Licensing decisions are made in alignment with U.S. foreign policy and national security objectives, often involving interagency consultation when required.
Compliance and risk considerations
Engaging in a transaction that requires an OFAC license without obtaining one can result in civil monetary penalties. OFAC enforcement operates under a strict liability standard, meaning penalties may apply even if the violation was unintentional.
When a license is issued, its terms and conditions must be followed precisely. Activities that exceed the authorized scope can still constitute violations. Organizations should maintain complete documentation of the license, the underlying transaction, and related compliance reviews as part of end-to-end sanctions compliance controls.