How to use exceptions and licences to comply with sanctions

The UK’s Office of Financial Sanctions Implementation (OFSI) has released guidance detailing how individuals and organizations can navigate sanctions through the use of exceptions and licenses. While exceptions provide automatic permission for certain activities under specific circumstances, a license serves as written authorization to perform actions that would otherwise be prohibited.

The responsibility for managing these permissions is divided among several UK government bodies. OFSI oversees financial sanctions and the Oil Price Cap, while the Insolvency Service manages director disqualification sanctions. Trade-related sanctions are handled by the Department for Business and Trade (DBT) through its Import Controls and Sanctions team and the Office of Trade Sanctions Implementation (OTSI), as well as the Export Control Joint Unit (ECJU). Additionally, the Department for Transport (DfT) is responsible for transport-related sanctions.

General exceptions often exist to support national security, prevent serious crime, or permit conduct authorized by the laws of the Channel Islands, Isle of Man, or British Overseas Territories. Specific regimes also feature unique provisions, such as the DPRK (North Korea) regime, which allows payments to sanctioned organizations for healthcare and agriculture. Furthermore, a UN humanitarian exception exists across relevant regimes to ensure the delivery of essential aid and the support of basic human needs.

Under financial sanctions, certain exceptions allow for the crediting of interest to frozen accounts or the settlement of pre-existing obligations. Regarding trade sanctions, exceptions may permit the movement of personal effects, non-commercial goods, or items necessary for diplomatic missions. The guidance notes that using exceptions often requires strict adherence to notification and record-keeping requirements, as failure to comply can result in criminal convictions or monetary penalties.