I think something that is lost among many people applying for licenses from the United States Department of the Treasury Office of Foreign Assets Control (“OFAC”) to engage in activities that would otherwise be prohibited by U.S. economic sanctions is that OFAC is not alone when determining whether a license should be granted or denied.
Due to a large portion of OFAC’s licensing determinations being guided by U.S. foreign policy and national security concerns, there are often a number of other federal agencies which are consulted during the license application review process. This is particularly true if there is a need to comply with other provisions of 31 C.F.R. chapter V, and with other applicable provisions of law, including any aviation, financial, or trade requirements.
These agencies include the U.S. Department of Commerce when there are transactions impacted by the Export Administration Regulations, 15 C.F.R. Parts 730 et seq., or the U.S. Department of State when there are transactions impacted by the International Traffic in Arms Regulations, 22 C.F.R. Parts 120-130.
The point here is that when drafting a license application to OFAC the parties drafting the application should consider it as an advocacy piece and seek to touch upon not only the laws administered by other federal agencies, but also the policies and missions of other agencies who may be consulted by OFAC in determining whether the license should be granted.
Thus, while OFAC has broad discretion to grant or deny license authorizations for otherwise prohibited activities, they do consult with other agencies. As such, a well drafted OFAC license application which considers and caters to the policies and policy objectives of those other agencies may be the difference between a license application that is granted and one that is denied.
The author of this blog is Erich Ferrari, an attorney specializing in OFAC matters. If you have any questions please contact him at 202-280-6370 or firstname.lastname@example.org.