A sanctions designation freezes assets. That includes the funds a designated person or entity would use to pay for legal representation. Without a legal-fees licence, counsel cannot be paid – and without counsel, the designation may go unchallenged. This is not a hypothetical risk. It is the first practical question that arises in almost every designation matter we receive.
A legal-fees licence (a specific authorisation permitting payment of legal and related professional fees from otherwise-blocked assets) is available under the major sanctions regimes, but the procedure, the fee caps, the permitted scope, and the documentary requirements differ materially between OFAC, OFSI, and the EU. As of June 2026, a cross-border client – one whose assets are frozen across more than one jurisdiction – must typically obtain a separate authorisation in each jurisdiction where blocked funds will be used. There is no single international legal-fees licence.
This guide walks through the procedure regime by regime, identifies the points of divergence that most often cause delay, and sets out the practical steps a designated person or their existing advisers should take before applying.
Step 1: Identify every regime in which assets are frozen
Before any licence application can be prepared, the first task is a complete asset map: every jurisdiction in which the designated person or entity holds funds, securities, real property, or other assets that have been frozen by operation of a sanctions designation. The number of regimes in play determines how many separate applications are required – and the sequence in which they must be submitted.
In our cross-border practice, we regularly advise clients who discover mid-process that assets are frozen in jurisdictions they had not initially considered. A bank account in one country, a securities holding in a second, and a real-property interest in a third can each be subject to a distinct legal regime with its own competent authority, its own application form, and its own processing timeline. Missing even one jurisdiction can leave counsel in that country unpaid and – more critically – can leave the client unrepresented in a proceeding that runs on its own timetable regardless.
The regimes most commonly in scope for a cross-border client are: OFAC in the United States; OFSI in the United Kingdom; the relevant EU Council regulations administered at the member-state level (with competent authorities varying by country of account); and, for clients with assets in Switzerland, the State Secretariat for Economic Affairs (SECO). Where assets also sit in Canada, Australia, the UAE, Singapore, or Japan, the applicable national instrument will apply. Each has its own legal-fees provision or analogue.
The starting point is always the designation itself. A listing on the SDN List (OFAC's list of Specially Designated Nationals and blocked persons) does not automatically produce a corresponding UK or EU designation, though in practice many designations are co-ordinated. Conversely, an EU designation does not bind OFSI. Each regime must be checked independently against the relevant consolidated list.
Step 2: Understand the governing authority and the legal basis in each regime
Each regime's legal-fees provision sits within its own legal instrument, and the competent authority differs accordingly. The mechanism is real in each case, but the gate-keeper and the standard differ – and that shapes the preparation strategy.
Under OFAC, the relevant authority is the Office of Foreign Assets Control within the US Treasury. Legal-fees provisions under OFAC regulations are typically embedded in the programme-specific regulations made under IEEPA or TWEA. OFAC operates a specific-licence procedure for legal-fees payments. Applications are submitted directly to OFAC. The agency publishes guidance on what information it expects, though the published timelines are indicative rather than statutory.
Under OFSI in the United Kingdom, the relevant authority is the Office of Financial Sanctions Implementation within HM Treasury. OFSI may grant a specific licence (a case-by-case authorisation to conduct an otherwise-prohibited transaction) under the Sanctions and Anti-Money Laundering Act and the relevant thematic regulations. OFSI's published licensing guidance describes the criteria, the required documentation, and the process. OFSI has a published processing target, though that target can extend for complex or contested cases.
In the European Union, the position is more complicated because EU sanctions regulations are directly applicable across all member states but the competent authority for licensing is typically the national authority in the member state where the assets are located. The relevant EU Council regulation will identify which transactions are prohibited and whether legal fees are covered by a licensing exception or a derogation. The applicant must therefore apply to the French competent authority for French-frozen assets, to the German authority for German-frozen assets, and so on – even under the same underlying EU regulation.
Switzerland operates through SECO, which administers the Swiss implementing ordinances. The Swiss legal-fees licensing procedure is analogous in structure to OFSI's, but the applicable legal instrument is distinct and the documentary requirements have their own character. We have acted for clients in Switzerland where the SECO process ran in parallel with both OFSI and an EU member-state application, and the sequencing and co-ordination of those parallel tracks proved the most demanding aspect of the matter.
Step 3: Assess scope – what the licence will and will not cover
A legal-fees licence authorises payment for legal representation and, in most regimes, closely related professional costs. What it will not do is provide a general unfreezing of assets – and that boundary matters for how the application is structured.
Under OFAC, the typical scope of a legal-fees specific licence covers the reasonable and necessary costs of legal counsel for the designated person in connection with their designation and related proceedings. OFAC will scrutinise whether costs are reasonable. Expenses that are not directly connected to legal representation – travel, public-relations advice, lobbying – will generally not be covered. The application must therefore be specific about what fees are sought and for what services.
OFSI takes a similar approach but its published guidance is explicit that the licence is for legal costs, not for broader living expenses or business continuation. The UK's position also reflects the distinction between a legal-fees licence and a separate licence category for basic expenses – the two should not be conflated in the application, because conflation can cause OFSI to treat the application as incomplete or to redirect it to a different licensing category.
The EU framework maintains a similar separation. The relevant Council regulation will typically provide a derogation for legal fees and related costs that is distinct from the humanitarian-exception pathway and from the basic-needs derogation. Each has its own criteria. A practitioner preparing a multi-jurisdiction application must map the scope of the licence sought in each jurisdiction to the specific derogation or licensing gateway in the applicable instrument – they are not identical across regimes, even where the designation is co-ordinated.
One practical implication: where the designated person requires both legal representation and basic living expenses from frozen assets, it is usually better to run two parallel licensing tracks rather than to submit a single application that conflates both needs. A combined application risks delay across both categories.
What is the most common mistake in legal-fees licences?
The most common mistake is submitting an application before the asset map is complete. Practitioners regularly approach the most familiar authority first – typically OFAC or OFSI – and submit an application before confirming whether other regime assets also need to be unlocked. The result is a situation in which one licence is granted but counsel in a second jurisdiction remains unable to act because no corresponding application has been made there.
The second most common error is mischaracterising the scope of the fees. An application that lumps together legal representation, PR advice, and travel support will, in most regimes, be returned or refused in part. Regimes treat these as distinct categories. Each category needs its own legal basis. The initial application should be drafted with the scope precisely defined, and any ancillary costs should be addressed either in separate applications or clearly sub-divided within the same application if the applicable regime permits it.
A third error we see regularly is failing to prepare for the regulator's questions. OFAC, OFSI, and the EU competent authorities will in almost all cases issue follow-up requests for information. These requests can concern the identity and fee structure of the proposed counsel, the value of the assets to be unlocked, the legal proceedings the fees relate to, and the proposed mechanism for ensuring that funds pass only to the authorised recipient. An application submitted without an internal protocol for responding to those questions promptly will fall behind applications that arrive with a well-organised supporting bundle.
Is your application ready to be queried within days rather than weeks? In our experience, the applications that move fastest are those where the client and counsel have agreed a rapid-response protocol before submission.
Step 4: Prepare the application – documentation across regimes
Each regime requires a core set of documents, and the overlap is partial rather than complete. Building a shared documentary base and then tailoring it to each regime's specific requirements is the most efficient approach for a multi-jurisdiction matter.
Across all major regimes, the application will typically require:
- Identification of the designated person or entity and confirmation of the basis of designation.
- Identification of the assets to be released and the accounts or institutions holding them.
- A description of the legal proceedings or representation for which the fees are sought.
- Identification of the proposed counsel and, where required, their fee structure or a fee estimate.
- A mechanism or undertaking ensuring that released funds pass only to the authorised legal representative.
OFAC applications require submission through the agency's licensing portal, and the narrative section must be sufficiently detailed to allow OFAC to assess both the legal basis and the reasonableness of the fees. OFAC's guidance indicates that applications should be complete on submission – a vague or incomplete filing will result in a request for further information that restarts the effective processing clock.
OFSI applications must be submitted in the format specified in OFSI's published licensing guidance. OFSI has indicated in its guidance that it expects applicants to demonstrate which licensing ground they are relying on and why the proposed transaction falls within it. The application should therefore identify the applicable ground explicitly, rather than leaving that to the authority to determine.
For EU member-state applications, the required format varies by competent authority. Some member states have published standard application forms; others accept free-form submissions. In either case, the applicant must identify the specific derogation in the Council regulation on which the application relies and confirm that the conditions of that derogation are met. Where assets are frozen in multiple member states, it is worth engaging local counsel in each relevant jurisdiction to handle the submission to the national competent authority, while the principal cross-border counsel co-ordinates the overall strategy.
Step 5: Manage the parallel tracks and timing
For a cross-border client with assets frozen in multiple regimes, the question of sequencing is rarely discussed but almost always consequential. Should applications be submitted simultaneously, or in a preferred order? The answer depends on which jurisdiction's proceedings are most urgent and which regime's assets are most accessible.
In general, there is no rule requiring sequential submission – all applications can be made simultaneously. In practice, the client's most pressing need is usually to pay counsel in the jurisdiction where a delisting petition or legal challenge is imminent. That proceeding should drive the priority order. If an OFAC licence is needed to fund US counsel for an OFAC administrative review, that application is the primary track. If a UK judicial-review application has an imminent filing deadline, the OFSI application takes precedence in terms of internal resource allocation.
Timing across regimes is also affected by the different processing speeds. OFAC's processing times have historically varied considerably depending on the complexity of the programme and the completeness of the application. OFSI has published processing targets that, for straightforward applications, are shorter than those associated with OFAC, though complex cases extend beyond those targets. EU member-state authorities vary considerably: some operate with published SLAs; others do not. SECO's timelines are also variable and will depend on the completeness of the submission.
What this means in practice is that legal representation in any given jurisdiction may become available at different times. A contingency plan for interim funding – whether from unblocked assets, from a third-party funder operating within an applicable general licence, or from other authorised sources – should be considered at the outset, not after the first application is refused or delayed.
How does cross-border differ from other regimes here?
The fundamental difference in a cross-border matter is multiplication: of applications, of competent authorities, of documentation requirements, and of processing timelines. A purely domestic designation – one where all assets are frozen under a single regime – presents the same legal question but with a single regulator, a single procedure, and a single point of follow-up. A cross-border matter requires all of those processes to run in parallel, co-ordinated but not unified.
There is also a substantive divergence in what each regime treats as the applicable standard. OFAC applies its specific-licensing test under IEEPA or the relevant programme-specific authority. OFSI applies its statutory licensing criteria under SAMLA and the relevant UK thematic regulations. The EU applies the criteria embedded in the Council regulation and the practice of the relevant member-state competent authority. These are not identical standards, and a set of facts that straightforwardly satisfies the OFAC test may require additional explanation or documentation to satisfy OFSI or the competent authority in a given EU member state.
The interaction between regimes also creates a specific risk that does not arise in a single-regime matter: extraterritoriality. Where a designated person has US-nexus assets and a US sanctions programme applies, OFAC's reach may extend to transactions that occur entirely outside the United States if they involve US-dollar clearing, US financial institutions, or US persons. A legal-fees licence from OFSI or an EU competent authority may therefore not be sufficient to authorise the fee payment if that payment passes through a US-dollar correspondent account. This is a practical trap. The solution is to confirm, at the documentation stage, the payment route and whether any US-nexus element requires a separate OFAC authorisation even where the assets themselves are held outside the United States.
A further cross-border consideration is the interaction between legal-fees authorisation and any general licence (a standing authorisation that permits a defined category of transactions without a separate application) that may exist in one or more of the applicable regimes. Some regimes have published general licences that cover legal fees up to a defined threshold without requiring a specific application. Where such a general licence exists and the anticipated fees fall within its scope, it may be possible to proceed without a specific-licence application in that jurisdiction – shortening the overall timeline materially. Whether a general licence is available, and whether its conditions are met, must be verified carefully before relying on it.
Risk flags and when to involve cross-border sanctions counsel
Several risk flags should prompt early instruction of counsel rather than a direct approach to the competent authority without representation.
The first flag is a multi-jurisdictional asset profile. Where assets are frozen in more than one regime, the complexity of co-ordinating parallel applications and managing divergent documentary requirements is high enough that self-representation carries meaningful risk of error. A misfiled or incomplete application in one jurisdiction can delay the entire parallel process.
The second flag is urgency. Where a legal proceeding – a delisting petition, a judicial-review application, or a commercial arbitration with a designated counterparty – is imminent, the tolerance for delay in the licensing process is low. Applications submitted with incomplete documentation will be queried; queries take time to answer; time costs the applicant its position in the legal proceeding. Front-loading the documentation effort, which experienced cross-border counsel can help to do, is the most effective risk-mitigation step.
The third flag is a contested designation. Where the underlying designation is itself under challenge, the legal-fees licence application must be framed with care. The information disclosed in the application – about the designated person's assets, accounts, and proposed counsel – is submitted to the very authority that imposed the designation. The application should not provide information that could be used adversely in the designation review. This is a fine line, and it is one that practitioners who regularly work at the intersection of licensing and delisting are best placed to manage.
The fourth flag is a US-dollar payment route. As noted above, where any element of the payment of legal fees would pass through US-dollar clearing or a US financial institution, OFAC authorisation may be required even if the assets are held outside the United States. This extraterritorial reach is often underestimated in non-US matters, and identifying it early avoids an unlicensed transaction that can itself create an enforcement exposure.
A common myth in this area is that a legal-fees licence application is a relatively low-stakes, administrative step that can be handled without specialist involvement. In our experience, the opposite is true. The application is submitted to the authority that controls both the assets and the designation. It is read carefully. It can reveal information that affects the designation process. It must be complete, accurate, and precisely scoped. Treating it as a routine filing rather than a strategic submission is the error that most often costs time and, in some cases, prejudices the underlying delisting effort.
If a transaction has already been flagged, or a filing has been queried, an early review can preserve options that narrow with time. For a confidential review of your cross-border licensing position, contact Calder & Vance at info@caldervance.com.
Related practices
- Frozen account management under BIS and the EAR – managing blocked-account obligations and release procedures under US export-control authority.
- Legal-fees licences under EU sanctions – procedure before EU member-state competent authorities and the applicable Council regulation derogations.
- Legal-fees licences under EU sanctions: advanced issues – handling contested matters, extraterritorial scope, and multi-member-state co-ordination.