What is a general licence (sanctions)?
A general licence is a published authorisation permitting a defined class of transactions that sanctions would otherwise prohibit. Anyone meeting its terms may rely on it without applying, and most carry conditions, reporting duties and an expiry date.
Sanctions regimes need release valves for wind-downs, humanitarian trade, legal fees, insurance and diplomatic activity. OFAC issues general licences inside its regulations and as standalone instruments, OFSI issues them under UK regulations, and the EU works instead through derogations granted by national competent authorities. The error we see most often is treating a general licence as permanent. Most carry an expiry date, and a wind-down licence in particular is a short window rather than an ongoing permission.
What this workflow covers
SCOPE- On a confirmed hit, check whether a licence applies, record its number and the conditions relied on, and diarise the expiry.
- A wind-down licence lets you complete contracts entered into before the designation date, provided the transaction closes by the stated deadline.
- Some licences are valid only if you file a report within a fixed period. Use the licence, skip the report, and an authorised transaction becomes a breach.
- An exemption sits outside the prohibition and needs no authorisation. A licence authorises something the prohibition catches.
Compliance glossary
TERMS- Specific licence
- A written authorisation issued to a named person for a named transaction, in response to an application.
- Exemption
- A circumstance defined in the regulations to which the prohibition never applied, so no authorisation is needed.
- Derogation
- The EU mechanism by which a national competent authority may authorise an act otherwise prohibited by a restrictive-measures regulation.
Authoritative references
SOURCES- 01FAQ 74: What is a license?
U.S. Department of the Treasury — OFAC
- 02OFAC Licenses — FAQ topic
U.S. Department of the Treasury — OFAC
- 03Financial sanctions general guidance
Office of Financial Sanctions Implementation, HM Treasury
Frequently asked questions
Q&A- General or specific licence: which one do we need?
- A general licence authorises a class of transactions for anyone meeting its terms, with no application. A specific licence is issued to a named applicant for a named transaction in response to a written application, and only that applicant may rely on it.
- Do we have to tell the authority we used one?
- Sometimes, and the answer is in the operative text rather than in a summary. Many general licences impose reporting or record-keeping conditions, and OFSI requires reporting for several of its licences. Read the conditions each time, because they are amended.
- Can a licence disappear between checks?
- Yes. Authorities amend, replace and let general licences expire, occasionally at short notice. Any process that leans on one should re-check its status before each use instead of caching the answer.