CSS CSS Licensing & Exemptions 1 — Questions and Answers
Question 1: What is a 'specific license' in the OFAC licensing framework?
- A blanket authorization covering a broad category of transactions
- An individual authorization granted by OFAC for a particular transaction or set of transactions (Correct answer)
- A license issued by FinCEN for money transmission
- A State Department export license for dual-use goods
Correct answer: An individual authorization granted by OFAC for a particular transaction or set of transactions
A specific license is an individual written authorization from OFAC permitting a particular person or entity to engage in a transaction that would otherwise be prohibited.
Question 2: A 'general license' under OFAC's framework authorizes:
- Only U.S. government agencies to transact with sanctioned parties
- A class of transactions for all qualifying persons without requiring individual OFAC approval (Correct answer)
- Financial institutions to conduct due diligence on sanctioned parties
- Transactions below a specified dollar threshold
Correct answer: A class of transactions for all qualifying persons without requiring individual OFAC approval
General licenses are published authorizations permitting all qualifying persons to engage in a described category of transactions without needing to apply to OFAC for individual approval.
Question 3: Which OFAC general license typically permits transactions related to personal remittances to certain sanctioned countries?
- General License 1 (Emergency transactions)
- Personal remittance general licenses specific to each country program (Correct answer)
- FinCEN Remittance Corridor Rule exemption
- State Department humanitarian general license
Correct answer: Personal remittance general licenses specific to each country program
Most comprehensive sanctions programs (e.g., Cuba, Iran) include specific general licenses permitting limited personal remittances to family members, with conditions specific to each country program.
Question 4: When applying for a specific OFAC license, applicants must typically demonstrate which of the following?
- That the transaction is commercially profitable
- That there is a licensing policy favoring the activity and the transaction serves a legitimate purpose (Correct answer)
- That competing U.S. companies do not offer the same goods or services
- That the sanctioned party has filed for removal from the SDN List
Correct answer: That there is a licensing policy favoring the activity and the transaction serves a legitimate purpose
OFAC evaluates specific license applications based on its published licensing policies for each program and whether the described transaction serves a legitimate humanitarian, legal, or policy purpose.
Question 5: What is the 'informational materials' exemption under OFAC sanctions?
- An exemption for academic textbooks sold in sanctioned countries
- A statutory exemption that permits importing and exporting informational materials regardless of sanctions (Correct answer)
- An exemption for U.S. government propaganda
- A license for exporting software to sanctioned parties
Correct answer: A statutory exemption that permits importing and exporting informational materials regardless of sanctions
The Berman Amendment provides a statutory exemption for the import and export of informational materials (such as books, films, and music) to and from sanctioned countries, reflecting First Amendment values.
Question 6: OFAC's 'emergency exception' typically permits which type of transaction without a license?
- Any transaction exceeding $1 million in humanitarian value
- Transactions necessary to protect human life in an imminent emergency (Correct answer)
- Transactions authorized by the UN Security Council
- Any transaction approved by the U.S. Secretary of State
Correct answer: Transactions necessary to protect human life in an imminent emergency
Most OFAC sanctions programs include an emergency provision allowing transactions necessary to protect human life in dire circumstances, such as medical emergencies, even without a prior license.
CSS CSS Licensing & Exemptions 1
What is a 'specific license' in the OFAC licensing framework?