OFAC General Licenses: A Plain-English Explainer

An OFAC General License is a public authorisation issued by the U.S. Treasury Department's Office of Foreign Assets Control that permits a defined class of transactions otherwise prohibited under a sanctions program, subject to stated terms, conditions, and time limits. It is the regulatory release valve through which Treasury reconciles the breadth of a sanctions designation with the practical need to wind down pre-existing dealings, sustain humanitarian flows, preserve essential third-country trade, and authorise the orderly divestment of blocked property. For any compliance team operating in proximity to a U.S.-sanctioned jurisdiction or counterparty, the General License is the document that defines what conduct is permitted on a given day — and the document whose lapse, amendment, or revocation most often defines what conduct becomes prohibited overnight.

What a General License is (and is not)

The two licence types differ in addressee and procedure, not in legal force. A Specific License is granted by OFAC, on application by a named applicant, to authorise a defined transaction or course of dealing. It is private, fact-specific, and binds only the applicant. A General License is a published regulation of general application: any person whose conduct falls within the four corners of its text may rely on it without seeking individual authorisation. The GL is the operational instrument through which OFAC permits classes of transactions at scale — humanitarian remittances, telecommunications continuity, the safe wind-down of a newly designated counterparty, or the limited preservation of essential energy flows.^[1][2]

Both instruments derive from the same statutory architecture. The President's authority to impose economic sanctions in response to a declared national emergency is set out in the International Emergency Economic Powers Act (IEEPA), 50 USC 1701 et seq. That authority is delegated to the Secretary of the Treasury and, in turn, to OFAC. The procedural rules governing issuance, amendment, and reliance on licences are codified at 31 CFR 501.801.^[3][4] A General License is not a forgiveness or a discretionary forbearance; it is a regulatory permission. Conduct that falls within it is lawful; conduct that strays outside its terms — even if the deviation is small — is unlawful and may be the subject of enforcement.

The corollary is operational: a GL is read as a statute, not as a marketing document. Its definitions, exclusions, reporting requirements, and expiration date all bind the user. A footnote that excludes a sub-class of counterparties is enforceable. A "provided that" clause that conditions the authorisation on a contemporaneous report to OFAC is enforceable. The GL means what its text says.

The lifecycle of a General License

Every General License moves through four stages, each with a documentary footprint that compliance teams should track.

1. Issuance. A GL is announced through the OFAC Recent Actions feed on the day it takes effect, with a numbered designation tied to the relevant sanctions program (for example, Russia-related GL 13, Venezuela-related GL 8, Iran-related GL N). The full text is published on the program page and, when amending the underlying regulations, in the Federal Register.^[5]
2. Amendment. When OFAC modifies a GL — to extend its expiration date, narrow its scope, broaden a class of authorised counterparties, or add a reporting requirement — it issues a successor version with a sequential letter suffix. GL 13 is succeeded by GL 13A, then GL 13B, then GL 13C, and so on. Each successor replaces its predecessor in its entirety from the effective date stated in the successor text. There is no automatic merger of terms across versions.
3. Expiration. Most GLs carry an explicit expiration date. On the stated date and time, the authorisation terminates by operation of law. Transactions initiated before expiration but not completed by the stated cut-off are not automatically protected; the text of each GL should be read for any post-expiration settlement permissions.
4. Replacement or revocation. OFAC may replace an expired GL with a fresh authorisation (often issued the same day under a new number), or it may revoke an in-force GL through a Recent Actions notice. Revocation is rare for humanitarian and consumer-protection GLs and somewhat more common for wind-down GLs once the underlying programme reaches a new stage.

Why GLs matter for compliance

The single most consequential GL type, by frequency and by enforcement-risk surface, is the post-designation wind-down GL. When OFAC adds a person, vessel, or entity to the Specially Designated Nationals (SDN) list, the immediate effect is to block all property and interests in property of the designated person within U.S. jurisdiction or in the possession of U.S. persons. Without authorisation, no U.S. person could complete a payment owed to the designated counterparty, off-load cargo from a designated vessel, or settle an in-flight derivative. The wind-down GL — standard length 30 to 45 days, longer for systemically significant designations — permits these terminating transactions, subject to stated conditions and reporting requirements.

The Sovcomflot designation of 23 February 2024 is the canonical recent example. OFAC's press release announcing the designation of Russia's state-owned tanker operator and fourteen associated crude oil tankers was accompanied by a 45-day wind-down GL authorising the off-loading of crude already in transit and the settlement of pre-designation contracts.^[6] Our 287-tanker shadow-fleet briefing documents how that wind-down window was operationally exploited by several of the designated vessels: voyages were completed, cargoes were off-loaded into permissive anchorages, and the GL's permissive scope was used to land cargo whose downstream destination then disappeared from public tracking. Misreading the wind-down terms — treating the GL as authorising new business, treating an expired GL as still in force, treating the GL as flowing to counterparties not named in its text — is one of the most reliable ways for a U.S. person or U.S.-touching counterparty to land on the wrong side of an enforcement action.

How to track GL amendments

The following four-step procedure is the minimum monitoring posture any compliance team should run.

Common live examples worth knowing in 2026

Three GL families illustrate the breadth of what the instrument is used for.

• The Lukoil GL 131 series. Following the U.S. designation of Lukoil PJSC and its consolidated subsidiaries, OFAC issued a structured divestment GL (GL 131, succeeded by GL 131A, GL 131B, and onward through 2025 and into 2026) authorising the wind-down and divestment of U.S.-person interests in Lukoil's downstream and trading subsidiaries. The expiration of the current iteration, scheduled for Q2 2026, is one of the more consequential GL deadlines on the Russia programme calendar. Energy traders, refiners, and financial counterparties with residual Lukoil exposure read each successor text with care because the divestment authorisation has been narrowed at each amendment.^[9]
• The Cuba program GLs. The Cuban Assets Control Regulations (31 CFR Part 515) include a long-standing inventory of General Licenses authorising specific categories of travel, remittances, telecommunications, and journalistic activity. These GLs are notable for being largely open-ended and for being the most frequently read GL family by individual U.S. persons rather than by institutional compliance teams.^[10]
• The Iran humanitarian GLs. The Iranian Transactions and Sanctions Regulations (31 CFR Part 560) carry a large set of GLs authorising the export and re-export of food, medicine, medical devices, and related items to Iran. These are high-volume in usage and tightly drafted; the operational compliance question is rarely "is this transaction permitted in principle" but "does this transaction satisfy each of the GL's enumerated conditions, including documentation, payment-channel, and end-user verification requirements."^[11]

Limitations

Three structural limits are worth stating plainly.

First, GL terms are not negotiable. A counterparty cannot ask OFAC to read additional conduct into a GL it does not cover. Where a GL falls short of what a specific transaction requires, the route is a Specific License application, not a creative reading of the GL.

Second, GLs do not flow to 50-Percent-Rule subsidiaries by default. OFAC FAQ 398 is explicit: an entity blocked under the 50 Percent Rule because it is 50 percent or more owned in the aggregate by one or more blocked persons is not authorised to engage in transactions under a GL issued to the listed principal, unless the GL explicitly names the subsidiary or its class.^[12] Our companion piece on the OFAC 50 Percent Rule walks through the indirect-ownership tests in detail; the practical compliance point here is that "the parent has a GL" is not a sufficient answer for any downstream entity.

Third, GLs are silent on conduct outside their scope. A GL authorising humanitarian remittances does not authorise the underlying banking relationship through which those remittances flow if that relationship is itself prohibited; a wind-down GL authorising cargo off-loading does not authorise the new charter of the same vessel for a subsequent voyage. The compliance team's task is to read the GL and only the GL — not to import permissions from adjacent instruments.

Cross-references

• Russia's Shadow Fleet: How 287 Sanctioned Tankers Keep Urals Crude Flowing — documents the operational use of the Sovcomflot wind-down GL.
• The 50% Rule, Examined: How Russian Oligarchs Stay Off OFAC Lists — the indirect-ownership tests that constrain GL beneficiary scope.
• OFAC 50 Percent Rule ownership test — the rule that determines whether a downstream entity can rely on a GL issued to its parent.
• CASP obligations under MiCA — companion explainer on the EU's parallel sectoral regime for crypto-asset service providers.

Sources and further reading

1. 31 CFR 501.801 — Licensing. OFAC Reporting, Procedures and Penalties Regulations.
2. OFAC FAQ 74 — Difference between General and Specific Licenses.
3. 50 USC Chapter 35 — International Emergency Economic Powers Act (IEEPA), 50 USC 1701 et seq.
4. OFAC Sanctions Programs and Country Information. Canonical index of programme pages.
5. OFAC Recent Actions feed. Real-time announcement channel.
6. U.S. Treasury Designates Russian State-Owned Sovcomflot, Russia's Largest Shipping Company. Treasury press release JY2121, 23 February 2024.
7. Bracewell LLP — OFAC sanctions and General License analysis archive.
8. Baker McKenzie — Sanctions and Export Controls Update blog.
9. OFAC Russian Harmful Foreign Activities Sanctions program page. Consolidated current GL list including the GL 131 Lukoil series.
10. 31 CFR Part 515 — Cuban Assets Control Regulations. Includes the long-standing Cuba programme General Licenses.
11. 31 CFR Part 560 — Iranian Transactions and Sanctions Regulations. Includes the humanitarian and medical-device General Licenses.
12. OFAC FAQ 398 — Treatment of entities owned by blocked persons. The 50 Percent Rule and its interaction with General Licenses.
13. Cleary Gottlieb — international trade and sanctions publications.
14. OFAC email subscription service. Free Recent Actions and Sanctions List Update notifications.