OFAC Licenses: General Versus Specific
Inquiring minds want to know: are there any options available to a member whose account has been blocked under the Office of Foreign Assets Control (OFAC) sanctions regulations? In certain cases, the answer is yes. However, available options will depend on whether the member’s transaction is eligible for an OFAC license.
OFAC is part of the U.S. Treasury Department’s Office of Terrorism and Financial Intelligence. OFAC administers and enforces economic and trade sanctions against targeted foreign countries and their agents, terrorism sponsoring agencies and organizations, and international narcotics traffickers. Sanctions are based on U.S. foreign policy and national security objectives.
As many readers are well aware, credit unions are prohibited from doing business with an OFAC target. Practically speaking, this means blocking (“freezing”) accounts and other “property” of any country, entity, or individual appearing on OFAC’s Specially Designated Nationals (SDN) and Blocked Persons List or any other list maintained by OFAC. In cases where an underlying transaction is prohibited (e.g., wire transfers from a sanctioned country), but there is no blockable interest involved, the transaction is rejected, (i.e., not processed).
That being said, OFAC has the authority to issue a license to permit certain transactions that would otherwise be prohibited by its regulations (31 CFR 501.801). Note that, while licenses may authorize particular transactions, they do not remove an SDN/blocked person from the SDN List or any other OFAC list. There are two types of licenses: general and specific.
General License
A general license authorizes certain categories of transactions, such as permitting humanitarian aid, educational exchanges, or personal remittances to populations in need in certain sanctioned countries. They allow all US persons to engage in the OFAC-authorized activity described in the general license without needing to apply for a specific license (case-by-case authorization from OFAC).
These licenses are described in the regulations and interpretive guidance for each sanctions program. Recent OFAC actions can be found here. For example, OFAC recently issued Venezuela General License 48, "Authorizing the Supply of Certain Items and Services to Venezuela.” Click here for a select list of general licenses issued by OFAC.
Credit unions should verify that transactions meet the relevant criteria of the general license before processing a transaction. Failure to do so could result in processing a prohibited transaction and violating sanctions regulations. When in doubt, reach out to OFAC for clarification before proceeding.
Specific License
Here’s the scenario: the credit union discovers that a member’s name has been added to OFAC's SDN List during a routine OFAC screening. The credit union “blocks” the funds in the account and reports the blocking to OFAC. The credit union’s immediate OFAC compliance obligations have been fulfilled, but they now have a distraught member who needs to send a wire from this blocked account to a family member overseas. What’s the member to do in this situation? If no OFAC general license applies to the transaction, the member can apply for a specific license to send the wire.
A specific license is a written document issued by OFAC authorizing a particular transaction or set of transactions and generally limited to a specified time period. Specific licenses are issued on a case-by-case basis when the proposed activity is not covered by a general license. If OFAC authorizes the transaction (e.g., the release of blocked assets to send the wire), the credit union may perform the transaction in accordance with the conditions spelled out in the specific license.
So, how does this work?
• To receive a specific license, the member must submit an application to OFAC. Any person having an interest in a transaction or proposed transaction can file an application for a specific license to authorize a transaction(s). Applications are available via OFAC’s Online Licensing Portal.
• OFAC’s website lists a number of best practices for submitting a licensing application, including: providing a detailed explanation of the purpose of the transaction; the parties involved in the proposed transaction; any available supporting documentation; any important dates that have bearing on the request; and a description of how the transaction does not meet the criteria of a relevant general license. Again, note that a specific license will not be granted if a general license already covers the transaction.
• If a member presents a specific license, the credit union should verify that the transaction the member wants to conduct conforms to the terms and conditions of the license (including the effective dates of the license).
• According to the Federal Financial Institutions Examination Council’s BSA/AML Examination Manual, OFAC recommends that financial institutions maintain copies of OFAC licenses on file to verify whether a person is initiating a legal transaction. Maintaining copies of OFAC licenses will also be useful if another financial institution in the payment chain requests verification of a license's validity.
• Lastly, credit unions should remain aware of the expiration date on the OFAC license.
Again, if it is unclear whether a particular transaction is authorized under the terms of the license, the credit union should contact OFAC for direction.
ICYMI: OFAC Launches Voluntary Self-Disclosure Portal
In case you missed it (ICYMI), OFAC announced the launch of an online Voluntary Self-Disclosure Portal on February 6, 2026. This portal provides a streamlined, secure method for submitting voluntary self-disclosures of potential violations of OFAC-administered sanctions programs. By transitioning to this online system, “OFAC aims to increase efficiency and transparency for persons submitting information, enabling faster acknowledgment of submissions, clearer communication throughout the review process, and a more user-friendly experience overall.”
Questions? Contact the Compliance Team at [email protected].