A designated person needs legal representation. Their assets are frozen under Australia's autonomous sanctions regime (the set of measures administered by the Department of Foreign Affairs and Trade, known as DFAT, under the Autonomous Sanctions Act and the associated Autonomous Sanctions Regulations). The funds to pay counsel are blocked. Without a licence, the lawyer cannot be paid. Without payment, the representation stalls. That is the practical bind that legal-fees licences exist to resolve – and resolving it under the Australian regime requires a different approach from the paths available under OFAC, OFSI, or the EU.
Australia's sanctions regime permits DFAT to grant a specific permit authorising the release of frozen funds to meet reasonable legal costs. The permit is case-by-case, requires DFAT's written approval, and sits within the broader licensing architecture of the Autonomous Sanctions Regulations. As of June 2026, no standing general permit covers legal fees automatically; every matter requires a separate application.
This guide walks through the procedure step by step, identifies where applications fail, and compares the Australian route with the mechanisms available under comparable regimes – so that counsel and their clients can judge which path is open and how to use it.
Step 1: Confirm that a permit is required and that DFAT administers the freeze
The first step is to verify that the funds in question are frozen under Australian autonomous sanctions and that DFAT is the correct licensing authority. Australia's autonomous sanctions are distinct from any UN Security Council measures that Australia implements separately. If the freeze derives only from UN-list obligations, the applicable process differs; if it derives from an Australian autonomous designation, DFAT holds the licensing function.
This distinction matters in practice. A designated person may appear on the UN Consolidated List, on the Australian Autonomous Sanctions list, or on both. Each carries different obligations. In our experience, applications that conflate the two sources create procedural delays at the outset that could be avoided with a brief mapping exercise before any document is filed.
The client's counsel should also confirm whether any of the frozen assets sit in accounts subject to a foreign freeze – for example, a concurrent OFAC block or an OFSI freeze in the United Kingdom. Where parallel freezes apply, a legal-fees permit from DFAT releases funds for the Australian-law component of the representation but does not authorise payment from a UK-frozen account. Each regime must be engaged separately. We regularly advise clients on this multi-regime sequencing, and the order in which applications are filed often affects timing materially.
Step 2: Assess the scope of the freeze and identify the relevant assets
Before drafting the application, map the full picture of the designated person's frozen assets: the type of asset, the institution holding it, the jurisdiction of that institution, and any existing access arrangements. A legal-fees permit can release funds only from assets that are frozen under the Australian regime.
What counts as a frozen asset under the Australian autonomous sanctions regime? The Autonomous Sanctions Act prohibits dealings with controlled assets of a designated person without an exemption or permit. "Dealings" is broadly defined and includes payments, transfers, and making funds available. A payment to legal counsel from a frozen account is a dealing. Without a permit, the financial institution holding the account, the counsel, and the instructing party all face potential exposure.
Identify the specific account or asset from which payment is proposed. DFAT will need this information in the application. Vague references to "funds held in Australia" are insufficient and will prompt a request for clarification that delays the process. Precision at this stage shortens the overall timeline.
One risk flag at this step: if the frozen assets are held by an entity rather than by the individual designated person, the ownership and control question must be resolved first. An entity that is owned or controlled by a designated person may itself be treated as subject to the freeze. If the legal-fees funds sit within such an entity, the permit application must address that layer of the analysis explicitly.
Step 3: Prepare and submit the DFAT permit application
DFAT's permit application for legal fees requires a written request addressed to the department's sanctions administration function. There is no standard form mandated for all applications, but DFAT publishes guidance on the information it expects. The core elements are consistent across applications and should be addressed in the following sequence.
First, identify the designated person and confirm their listing status, including the date of designation and the programme under which they are designated. Second, describe the legal proceedings for which representation is sought. DFAT considers whether the proceedings relate to the designation itself, to an unrelated civil or criminal matter, or to a regulatory investigation. This characterisation can affect how the application is evaluated. Third, specify the amount requested and the period for which the permit is sought. Requests should be based on a reasoned estimate of fees, not an open-ended ceiling. Fourth, identify the proposed recipient of the funds – the law firm or counsel – and confirm that the recipient is not itself a designated person or owned or controlled by one.
In our practice, we have found that applications which include a clear, structured narrative covering each of these points are processed more smoothly than those which leave DFAT to read between the lines. The department has limited resources for sanctions licensing and an under-explained application consumes more of its time – and yours.
DFAT may request additional information or undertakings before granting the permit. Common requests include confirmation that the funds will be used exclusively for legal fees, and an undertaking from the receiving lawyer or firm to that effect. Build time for this exchange into the matter plan.
How long does a DFAT legal-fees permit application take?
DFAT does not publish a fixed statutory processing time for permit applications under the autonomous sanctions regime, and timelines vary with the complexity of the matter, the completeness of the application, and the department's current workload. In our experience, applications on straightforward matters with complete documentation tend to be resolved faster than incomplete applications on complex ownership-chain questions.
This absence of a published deadline is a material difference from the UK position. Under the UK's OFSI licensing regime, OFSI publishes target processing times for different licence categories, which allows applicants to plan around them. DFAT's process is less clock-bound, which creates uncertainty for clients with pressing proceedings deadlines.
The practical answer is to apply as early as possible. If legal proceedings have a fixed hearing date, that date should be disclosed in the application so that DFAT understands the urgency. A late application that is submitted close to a court deadline places the applicant in a difficult position if processing takes longer than anticipated. We advise clients to treat the DFAT application as something to be filed at the point that legal representation is retained – not at the point that an invoice arrives.
Step 4: Manage the conditions attached to the permit
A DFAT legal-fees permit is not unconditional. The department typically attaches conditions specifying the permitted use of the funds, the identity of the authorised recipient, the maximum amount covered, and the period of validity. Every condition must be observed; a payment that exceeds the permitted amount or is made after the permit has expired is a dealing without authorisation.
Record-keeping is essential throughout. Both the designated person (or those acting on their behalf) and the financial institution releasing the funds should maintain clear records of each transaction made under the permit. If DFAT later seeks to verify compliance, those records will be the primary evidence. Compliance counsel advising the financial institution should ensure that the institution's internal processes are aligned to the permit's specific conditions before any transfer is made.
If legal proceedings extend beyond the permit period, a fresh application or an extension request is required before the expiry date. Do not assume that an ongoing matter extends the permit automatically. In our experience, permit-expiry failures are among the most common compliance gaps in legal-fees matters – easily avoided with a diary reminder but potentially serious if missed.
Where the proceedings to which the permit relates conclude before the permitted period expires, any unspent funds should remain frozen unless a further permit is obtained. The permit authorises a defined use; it does not unfreeze assets generally.
Cross-regime comparison: How does Australia differ from OFAC, OFSI, and the EU?
Australia's legal-fees permit mechanism operates on a case-by-case, specific-permit basis – and that is where the comparison with other major regimes reveals important divergences. Understanding those differences is essential for clients whose affairs span jurisdictions.
Under the US regime, OFAC has issued specific general licences (standing authorisations) covering payment of legal fees up to a defined ceiling for certain designated persons, particularly in connection with designated-person challenges and related proceedings. Those general licences operate without a separate OFAC application for each matter, subject to the conditions and ceilings specified in the relevant instrument. Australia has no equivalent standing general authorisation. Every application is individual.
The UK's OFSI issues specific licences for legal fees on a case-by-case basis, similar to Australia's approach, but operates under the Sanctions and Anti-Money Laundering Act (SAMLA) with a published licensing framework that sets out the criteria for different licence purposes, including legal costs. OFSI also publishes target timelines, which DFAT does not. The practical effect is that the UK route is more predictable in timing, though not necessarily faster in outcome.
Under EU sanctions regulations, the relevant Council regulation typically contains a specific provision permitting competent member-state authorities to authorise release of frozen funds for reasonable legal fees, subject to conditions. Implementation varies by member state – the national competent authority in each member state applies the relevant regulation's provision according to its own procedural rules. An EU-based legal-fees application therefore involves the relevant member state's authority, not an EU-level body.
What is common to all regimes is that the legal-fees mechanism does not authorise general unfreezing; the funds must be used for the stated purpose and no other. The divergences are in procedure, timeline, and the degree of standardisation available to applicants.
Common pitfalls and risk flags for counsel and compliance teams
Several patterns of failure recur in legal-fees permit applications across the Australian regime. Awareness of them allows applicants to address the issues before they cause delay or refusal.
The first is the ownership and control gap. Where the designated person does not hold funds directly but rather through an entity, the application must address whether that entity is itself subject to the freeze. If it is, the application must seek a permit covering both the entity-level dealing and the onward payment to counsel. Applications that assume the entity is unaffected, without demonstrating why, are vulnerable to DFAT queries or refusal.
The second is an overstated or vague fee request. DFAT is not required to grant the full amount sought. Requests that are not tied to a reasoned estimate of actual legal costs – broken down by stage of proceedings, at least in outline – invite a reduced grant or a request for further justification. A structured budget narrative, prepared with counsel and presented with the application, is a stronger foundation than a round-number request.
The third is failing to address the recipient's own sanctions status. The permit authorises payment to a specific recipient. If that recipient is a designated person, or is owned or controlled by one, the payment would be a prohibited dealing regardless of the permit. This is not a theoretical concern; it requires an affirmative check and a brief statement in the application confirming the result of that check.
The fourth pitfall – and perhaps the most frequently observed in our cross-border practice – is treating the DFAT permit as a standalone solution when parallel freezes apply. A client with assets frozen in the UK and Australia requires permits from both OFSI and DFAT. A DFAT permit alone does not resolve the OFSI position, and vice versa. Counsel advising the designated person must either hold expertise across both regimes or engage specialists in each.
Is there a myth worth correcting here? A common misconception is that once a designated person has legal representation engaged, the need for a permit is somehow suspended or that the lawyer can be paid from other, non-sanctioned sources without restriction. That is not the Australian position. The prohibition runs to any dealing with the frozen asset, and the source of alternative funds may itself require examination for sanctions implications.
Related practices
- Frozen account management under BIS/EAR – practical steps for managing accounts blocked under US export-control and OFAC-adjacent rules.
- Legal-fees licences under BIS/EAR: the practitioner's guide – how the US licensing mechanism for legal costs operates and where it differs from the Australian path.
- Legal-fees licences under BIS/EAR: advanced considerations – extended analysis of the US regime for multi-designation and appellate matters.