On May 21, 2021, the UK’s Office of Financial Sanctions Implementation published a paper on its counter-terrorism licensing policy to provide an overview on the issuance of licenses that authorize certain activities or transactions that are otherwise prohibited by sanctions legislation. OFSI issues licenses to specific persons who have a legitimate need, and issues general licenses to authorize otherwise prohibited transactions by certain categories of persons. While a general license can be used by those who fall within the license criteria without submitting an application to OFSI, there is usually a mandatory reporting requirement that applies.
Licensing derogations vary according to counter-terrorism regulation with some providing the Treasury with broad discretion to grant licenses while others, like the ISIL (Da’esh) and Al-Qaida (United Nations Sanctions) (EU Exit) regime, only allow licenses for “basic and extraordinary expenses.” The Treasury can also attach conditions to licenses that include safeguards to protect against terrorist financing risks, with policies to prevent designated persons from having access to large amounts of cash and ensure that audit trails or other means exist by which the Treasury can monitor compliance with the license.
OFSI also encourages applicants to submit new license applications or amendments to the agency via email, and urges the public to review its general guidance to find details on the Treasury’s approach to licensing for other sanctions regimes.