Glossary term
Specific License
A specific license is a written OFAC authorization issued to a particular person or entity, on a case-by-case basis, for a transaction that would otherwise be prohibited.
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What Is a Specific License?
A specific license is a written OFAC authorization issued to a particular person or entity, on a case-by-case basis, for a transaction or series of transactions that would otherwise be prohibited. Unlike a general license, which applies broadly when stated conditions are met, a specific license is individualized. The applicant asks OFAC for permission, OFAC reviews the request, and the written license determines what is authorized and on what terms.
A specific license matters because not every lawful or policy-appropriate transaction can be covered through a standing general authorization. Sanctions programs often need a mechanism for exceptions, case-specific humanitarian relief, legal settlements, wind-downs, or other narrow circumstances that require individualized review. The specific-license process is that mechanism.
Key Takeaways
- A specific license is a written case-by-case authorization from OFAC for a particular applicant.
- It is used when a transaction would otherwise be prohibited and no applicable general license or exemption already covers it.
- A specific license only authorizes what is stated in the written approval.
- Submitting an application does not by itself authorize the transaction.
- The specific-license process is a way to request limited permission inside a broader sanctions restriction, not a way to ignore the sanctions program.
How a Specific License Works
A person or entity seeking authorization submits an application describing the proposed transaction, the parties involved, the sanctions nexus, and the reasons OFAC should authorize the activity. OFAC reviews the request under its regulations and licensing policies. If OFAC decides to grant the request, it issues a written license stating what activity is authorized and any conditions, limits, or expiration dates that apply.
This means the license is not a generic waiver. It is a defined authorization tied to the facts presented in the application. If the actual transaction differs materially from what OFAC approved, the license may not cover that conduct.
Specific License Versus General License
The cleanest contrast is with a general license. A general license authorizes a class of transactions for anyone who meets the terms. A specific license authorizes a particular person or entity in a particular situation after individualized OFAC review.
Authorization type | Main feature |
|---|---|
General license | Self-executing authorization for a defined class of transactions |
Specific license | Written case-by-case authorization for a named applicant or applicants |
This distinction matters because OFAC generally expects people to rely on a general license when one already applies. The specific-license route is for cases where no general authorization or exemption is available or where OFAC’s individualized review is required.
Why Specific Licenses Matter Financially
Specific licenses matter because sanctions regimes would otherwise leave no lawful path for certain transactions that may still be justified. Humanitarian transactions, legal-fee payments, asset transfers tied to settlements, or other exceptional matters may require targeted relief that cannot be safely granted to everyone through a broad rule. The specific-license process lets OFAC examine those cases one by one.
For financial institutions and businesses, the term matters because the existence of a possible license route can change how a prohibited transaction is handled. A payment that cannot proceed today may still be something the customer can request authorization for rather than abandon permanently. But until OFAC grants that written authorization, the prohibition still applies.
What a Specific License Does Not Mean
A specific license application is not approval. Filing paperwork does not permit a bank to process the transaction while the request is pending. Likewise, a specific license does not authorize anything beyond the scope of the written document. If the license covers one payment, one date range, one counterparty, or one category of conduct, the applicant cannot stretch that language to cover materially different activity.
This matters because sanctions compliance problems often begin when people treat the possibility of future authorization as if it were present authorization. In practice, firms still need to block, reject, or hold the relevant activity according to the existing rules unless and until the license is issued.
How Institutions Use Specific Licenses
Financial institutions use the concept of a specific license when evaluating whether a prohibited transaction can be routed into an authorized path. The institution may ask whether a valid specific license already exists, whether the proposed transaction fits the license exactly, and whether other compliance conditions still need to be satisfied. Even with a license, screening and documentation do not disappear.
This is why specific-license review often overlaps with OFAC guidance, legal review, and close operational controls. A written authorization can solve one sanctions problem, but only if the institution understands the scope of the authorization precisely.
The Bottom Line
A specific license is a written OFAC authorization issued to a particular person or entity for a transaction that would otherwise be prohibited. It matters because it creates a case-by-case path for limited lawful activity under a sanctions regime, but only within the exact terms OFAC approves in writing.