Glossary term
Specific Licence
Subject: Financial Crime, Sanctions
A specific licence is written permission from a sanctions authority to a named applicant to carry out a particular activity that the sanctions would otherwise prohibit, on stated terms and for a limited time.
Explanation
Most sanctions regimes allow exceptions, and the licence is the formal way to use them. A specific licence is issued to one applicant, for one defined transaction or set of transactions, with conditions. These may cover the amount, the parties, the time period and the reporting required. The applicant describes the plan and the reason, for example paying legal fees, releasing a frozen fund for living costs, completing an old contract, or delivering humanitarian goods. The authority decides case by case, and may refuse or add terms. Acting outside the licence terms is a breach. Banks take care to see the actual licence and match it to the payment. A specific licence differs from a general licence, which applies to everyone who meets its conditions. Lawful but sensitive activity cannot go ahead without one.
Example
A listed individual whose assets are frozen needs to pay a lawyer to defend a court case. The lawyer’s firm applies to the sanctions authority and receives a specific licence for fees up to a stated sum, from one named account, for six months. The bank checks the licence against the payment request, pays within the limit, and reports the payment as the licence requires.
Not to be confused with
- General Licence
- A published permission open to anyone who meets its conditions. A specific licence is issued to one named applicant.