OFAC provides scant public information about the approval process for licenses. OFAC broadly states that its licensing determinations are “guided by U.S. foreign policy and national security concerns” and may involve coordination with other federal agencies, including the U.S. Department of State and the U.S. Department of Commerce.18 One reason that other agencies may be brought in to deliberate a license application involves the content of the application: for instance, if the proposed license involves exports, the Commerce Department may participate in the approval process.19 If the proposed license implicates State Department regulations, such as arms trafficking, then the State Department may also review the license application.20 In its guidance on the Traveler, Carrier, and Remittance Forwarding Service Provider Program (TCRFSP Program), OFAC provides some additional information on the factors it may consider when granting service provider licenses in the context of its Cuban sanctions program. While not necessarily indicative of the considerations OFAC may weigh with respect to other types of applicants or sanctions programs, the TCRFSP Program guidance provides some insight into the types of considerations that OFAC and other federal agencies may weigh during the review process. For instance, OFAC states that it may conduct background investigations of “each owner, significant shareholder, director, manager, and other key employee [sic] that will be directly involved in the applicant’s Cuba-related business.”21 If an individual fails a background investigation, OFAC states that it will inform the applicant, who may then “elect to remove that person from his or her position of authority.”22
Additionally, OFAC states that it may consider “OFAC related conduct, including, for example, past compliance with rules and regulations.”23 The guidance also contains recordkeeping and reporting requirements for entities that receive OFAC licenses.24 According to OFAC’s most recent licensing report on the Sudanese and Iranian sanctions programs, the average processing time for issuing license determinations is 77 business days.25 While not indicative of the processing time for other types of licenses, this information offers one example of the amount of time it takes OFAC to reach a decision on a license application. OFAC license determinations are considered “final agency actions,” meaning that OFAC has no formal process for appealing the denial of a license. Rather, OFAC states that it will reconsider its licensing decisions only “for good cause,” defined as situations “where the applicant can demonstrate changed circumstances or submit additional relevant information not previously made available to OFAC.”26 The only challenge a person or entity could make to OFAC’s denial of a license would be through the judicial process: here, the party challenging the decision would have to prove that OFAC acted arbitrarily and capriciously in denying the license application. The “arbitrary and capricious” standard, established by the Administrative Procedure Act, represents a high evidentiary bar in U.S. courts that may prove difficult for an applicant to overcome.
From: “OFAC Licensing Background Briefing,” Counterterrorism and Humanitarian Engagement Project, Harvard Law School, March 2013, http://blogs.law.harvard.edu/cheproject/files/2012/10/CHE-Project-OFAC-Licensing.pdf