Last week OFSI announced in their blog that it will start to return specific licence applications that are submitted in an incomplete format. 

Anyone who has submitted a financial licence application to OFSI will know that turnaround times are long – even where a licence is considered urgent it can take some months to receive a licence. OFSI has long since abandoned its 4 week target.  In December 2022, HM Treasury disclosed that it had received over 1,000 licence applications in relation to Russia alone in that year.

In short, there are strong reasons why OFSI’s licensing team is busy and this latest initiative makes practical sense.

There are two practical observations from this recent announcement:

• By returning incomplete applications, OFSI should have more time to handle properly completed applications – at least relatively speaking.  This could reward those who pay attention to detail.
• Those applying for a licence should make extra effort to ensure that their application is comprehensive and complete.  This is not new, it has always been our recommendation.

Our advice for those considering applying for a sanctions licence:

• Check to see if a licence is required:
  • Is the proposed activity actually prohibited by sanctions?
  • Is the proposed activity already permitted by a General Licence?
  • Do the sanctions regulations permit OFSI to issue a licence for transactions such as yours? 

• Always ensure you complete the application fully:
  • Gather all the information you need in advance
  • Submit all relevant supporting documents with the licence application form

• Get your stakeholders onside early:
  • Who in your organisation needs to authorise applying for the licence?
  • Does your transaction counterparty know a licence is required?  Are they still happy to proceed, knowing the likely delay?
  • Have you engaged your bankers to ensure they are happy to be involved in the transaction?

• Consider whether you need approvals from any other bodies:
  • Is there a foreign nexus, which would require licences from, for example the EU or US?
  • Does the transaction involve goods or services that need trade sanctions licences in addition to an OFSI financial sanctions licence?         

If you would like to know more about sanctions licensing in the UK, EU or US, or have any other sanctions issues you would like to explore, please contact us for an initial free discussion.