Customer subject to financial sanctions—when do I need a licence?
Customer subject to financial sanctions—when do I need a licence?

The following Practice Compliance guidance note provides comprehensive and up to date legal information covering:

  • Customer subject to financial sanctions—when do I need a licence?

This document contains guidance on subjects impacted by the UK’s withdrawal from the EU. For further reading, see Practice Note: Development of sanctions regime in the UK post Brexit—timeline.

A designated person or target is an individual or entity listed by the United Nations (UN), EU or the Office of Financial Sanctions Implementation (OFSI), which is part of HM Treasury, as being subject to financial sanctions. The list of designated persons subject to an asset freeze can be found here.

In certain circumstances OFSI can provide written authorisation to disapply financial sanctions prohibitions in relation to an activity which would otherwise be prohibited by a financial sanction measure. This is called a licence.

OFSI is only able to issue licences where there are specific exemptions or relevant licencing grounds to do so and when the conditions in those grounds are met. Exemptions and licencing grounds are set out in relevant legislation, but generally asset freezes imposed under EU legislation permit licences to be issued under the following grounds:

  1. the basic needs of the person/dependant family members

  2. payment of reasonable legal fees and disbursements

  3. the fees or service charges for routine holding or maintenance of frozen funds or economic resources

  4. satisfaction of prior court or arbitration judgments against the person

  5. extraordinary expenses (as defined)

Any person or body affected by financial sanctions can apply for a licence so that