I know…I know, I’ve been a bad blogger lately. In all fairness though, I was finishing up work on a law review article centered on the KindHearts v. Geithner decision that came out in August. As such, my OFAC work has not been put on hold; I merely chose another forum. In my absence OFAC released its quarterly licensing report and I thought it would be a good time to examine some of that information, particularly since I keep getting calls from media outlets looking for statistical analysis on OFAC actions.

For those of you who are interested the report can be found here.

What may surprise some people is that a majority of license applications are actually approved. A lot is made of OFAC regulating through ambiguity and being a quasi-secret agency, however, its not impossible to obtain licenses through OFAC. Of 353 license applications considered in the second quarter of 2009 (April-June) 236 licenses were issued. That’s approximately 67% or around two-thirds. What’s more amazing is that of the total determinations only two were actual license denials. The other actions not constitutiong approvals were either license amendments or “return-without-action” (“RWA”) letters. OFAC defines a licensing determination as “any action that OFAC takes on a license application. It may take the form of a license, a license amendment, a ‘return-without-action’ letter, a general information letter, an interpretative letter, a denial letter, or a close-out determination.”

Some other useful statistics from the report are found in the amount of processing time for each different type of action. OFAC reported that a license application approval on average takes 60 business days to process. On the other hand a denial takes 116 business days to process. RWA letters average 16 business days. Averaging all of these averages shows that OFAC generally process a licensing determination within 49 days.

Its good to see the denials take longer time than any other type of determination. To me that says that OFAC is seriously considering the application. I consider everything in this report to be good news. I know that it can sometimes seems like OFAC is impossible to deal with and there is no chance of being able to obtain a license, but that’s just not the case. If you are attempting to engage in transactions which you think might be impacted by an OFAC administered sanction program, then do the right thing; get a lawyer and apply for the license. They are far from impossible to obtain and you are saving yourself majore headaches down the road.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC litigation. If you have any questions please contact him at 202-280-6370 at 202-351-6161 or ferrari@ferrari-legal.com.