OFAC license vs clearance: what each is and which you need
An OFAC license and an OFAC clearance are different things. A license is an authorization from OFAC to engage in transactions that U.S. sanctions would otherwise prohibit (OFAC FAQ 74). An "OFAC clearance" is not issued by the government at all: it is a business's own dated record showing that a person or company was screened against OFAC's lists and no match was found, or that every possible match was reviewed and cleared. If a lender, title company or auditor asks for an "OFAC certificate", they almost always mean the second.
What an OFAC license is
OFAC describes two kinds of license (OFAC FAQ 74):
- General licenses authorize categories of otherwise prohibited transactions under a sanctions program. They are public and "self-executing": if your transaction meets the terms, you do not need anything further from OFAC. Some sit in the program regulations and some on the program pages of OFAC's website.
- Specific licenses are non-public documents OFAC issues to a particular person or entity, authorizing a particular transaction in response to an application.
You apply for a specific license through OFAC's electronic application, with a detailed description of the proposed transaction and the names and addresses of everyone involved (OFAC FAQ 75). The procedure is in 31 CFR 501.801, and OFAC's licensing page collects the guidance.
Licenses come with conditions. OFAC notes that anyone relying on a general or specific license must comply with all of its terms, including any recordkeeping and reporting requirements (OFAC FAQ 74).
You need a license only when the transaction involves a sanctioned person, property or country in a way the rules prohibit. A routine customer, vendor or buyer who is not on any list does not need one.
What "OFAC clearance" means in practice
Car dealers, title and escrow closers, accounts payable teams and lenders use "OFAC clearance" to mean the screening step came back clean. There is no government form behind it. OFAC's free Sanctions List Search returns potential matches; it does not issue a certificate, and it keeps no record of your search.
That is why the word causes confusion. A closing checklist might say "OFAC clearance required" when what the underwriter wants is evidence that someone checked every party against the current lists before closing.
What a clearance record should contain
If you are producing your own record, make it something a stranger could check a year later:
| Field | Why it matters |
|---|---|
| Name screened, exactly as entered | Shows what was searched, including spelling |
| Other identifiers used (address, country, date of birth, ID number) | Shows how a possible match was ruled out |
| Lists screened | SDN and Consolidated, plus any others your policy requires |
| Publication date of each list | Shows which version of the list you checked |
| Date and time of the screening | Ties the check to the transaction |
| Result: no candidate, or the candidates found | A candidate is a name to review, not a finding |
| Reviewer, decision and written reason for each candidate | The part an examiner reads |
OFAC's recordkeeping rule requires a full and accurate record of each transaction subject to its regulations, available for examination for at least 10 years after the transaction (31 CFR 501.601). Your screening record belongs with that transaction record.
When the record is not enough
A clean screening covers names on the lists. It does not cover entities owned 50 percent or more by blocked persons that are not listed themselves. See the 50 percent rule with worked examples. If a check returns a candidate you cannot rule out, clear it or escalate it before the deal proceeds, and see what to do with a true match.
Quick answers
- Can I get an "OFAC certificate" from Treasury? Not for screening. OFAC issues licenses, not screening certificates.
- Do I need a license to sell to a customer who is not on any list? Generally no. A license is for transactions that are otherwise prohibited.
- Is a screenshot of Treasury's search enough? It shows a moment in time but not which list version you searched or how a match was resolved. A structured record is easier to defend. See how to run an OFAC check and keep the proof.
This is screening data, not legal advice. For a license question, OFAC's licensing page and your counsel are the right places to start.
Run a free OFAC check against the current SDN and Consolidated lists and keep a dated record of the result.