A humanitarian organisation operating cross-border programmes in a heavily sanctioned environment reaches the point of needing to move funds to a local implementing partner. The payment is unambiguously charitable in purpose. But one individual on the partner's board appears on the Consolidated List of Financial Sanctions Targets (OFSI's register of designated persons in the United Kingdom) and one of the partner's funders sits within the ownership chain. The transaction freezes. The question is not whether the purpose is good. The question is whether the legal route exists – and how quickly it can be opened.
Humanitarian organisations and non-governmental organisations operating in sanctioned environments routinely need specific authorisations from the Office of Financial Sanctions Implementation (OFSI), the UK Treasury body responsible for licensing financial sanctions exceptions. As of June 2026, the UK financial-sanctions regime includes both general licences covering defined humanitarian activity and the specific-licence route for cases that fall outside those standing permissions. Neither route is automatic. Each requires a structured application, and the cross-regime position – particularly the interaction with EU Council regulations and OFAC's humanitarian permissions – adds layers that an in-house team can underestimate.
This case comment describes the situation a client faced, the legal analysis that followed, the route chosen, and the lessons that apply to any NGO, humanitarian body, or corporate sponsor of relief activity working near or within a sanctioned environment.
The situation: a payment blocked, a programme at risk
A UK-registered charitable organisation had been running field programmes through a network of local implementing partners in a region subject to UK financial sanctions. The programmes were funded by a combination of institutional donors and corporate philanthropic contributions. For several months the activity had proceeded under a general licence – a general licence (a standing authorisation that permits a defined category of transactions without a separate application) issued by OFSI covering certain humanitarian and charitable activity.
The difficulty arose when the organisation sought to onboard a new implementing partner. Screening of the partner's governance structure revealed that a member of its oversight board was a designated person under the relevant thematic UK sanctions regulations. A second screening run identified that one of the partner's upstream funders – not a direct funder of the programme, but present in the ownership and control picture – was an entity connected to a designated person. The organisation's bank declined to process the payment. The general licence did not, on its face, extend to transactions involving an entity with a designated person in a governance role. The programme was at risk of a funding gap that would affect direct beneficiaries within weeks.
In our experience, this pattern – a general licence that covers the humanitarian purpose but does not extend to the specific counterparty configuration – is the most common trigger for urgent specific-licence applications in the NGO sector. The organisations affected are rarely in breach. They are, however, in a gap between what the general licence covers and what the specific facts require.
The legal question: does the general licence extend, or is a specific licence required?
The first analytical task was to determine precisely what the general licence permitted and where it stopped. General licences issued by OFSI set out their scope in terms of the activity permitted, the parties that may rely on them, and any conditions or exclusions. Reading the general licence carefully against the specific facts – the identity of the implementing partner, the governance connection to the designated person, the nature of the board role – established that the general licence did not cover this transaction. The designated person held a governance position, not a beneficial-ownership stake, but OFSI's general licence language was drawn narrowly.
The second question was whether the ownership and control test (the UK test for whether a non-listed entity is caught because a listed person owns or controls it) brought the implementing partner itself within the financial-sanctions prohibitions, making any payment to it a prohibited transaction absent a licence. The UK test – like the EU position under the relevant Council regulations – looks beyond ownership to effective control. A governance role with influence over programme direction could, in the right facts, amount to control. The US OFAC position is different: the 50 percent rule (OFAC's rule treating entities owned 50 percent or more by blocked persons as themselves blocked) is mechanical and ownership-based; it does not operate through a control test in the same way. That divergence mattered here because some of the programme's institutional donors were US-connected and were considering their own OFAC exposure.
After careful analysis, the conclusion was that the implementing partner was not itself a designated person and was not caught by the control test on the specific facts. The governance role was advisory; the designated person had no operational authority over the partner's financial affairs. But the payment still required a specific licence because the general licence excluded transactions where a designated person held any governance position in the counterparty.
The position above covers the structural analysis. Your facts – the counterparty's governance structure, the nature of the designated person's role, the regime applicable to your donors – change the analysis materially.
To discuss a licence application or a cross-regime humanitarian authorisation question, write to us at info@caldervance.com.
How do OFSI specific licences for humanitarian work differ from general licences?
A specific licence (a case-by-case authorisation to conduct an otherwise prohibited transaction) issued by OFSI for humanitarian activity requires the applicant to satisfy OFSI that the transaction falls within a permitted ground – in this context, the humanitarian grounds in the relevant thematic sanctions regulations. The key difference from the general-licence route is procedural and evidential. A general licence is self-executing: the organisation reads the licence, confirms its activity falls within it, and proceeds. A specific licence requires an application, a factual and legal submission, and a decision by OFSI.
For humanitarian and NGO applicants the application must address several points directly:
- The nature and purpose of the proposed transaction and how it falls within the humanitarian licensing ground.
- The identity of all parties, including the implementing partner and any designated persons in its structure, with an explanation of the connection.
- Evidence that the funds will not be made available, directly or indirectly, to a designated person as a financial benefit.
- The controls in place to monitor the use of funds after disbursement.
- The urgency of the matter, if applicable, with supporting detail on the programme impact of delay.
OFSI has a processing target for specific-licence applications. In our practice, complex humanitarian cases – those involving designated persons in the counterparty structure – take longer than the standard window. The urgency of the programme situation should be stated clearly in the application and supported with evidence; OFSI does consider operational urgency. What the application cannot do is assume that the humanitarian purpose is self-evident. OFSI operates a legal test, not a policy discretion.
Cross-regime, the comparison is instructive. OFAC's humanitarian licensing positions are set out in general licences that are broader in some respects and narrower in others than OFSI's. The EU position under the relevant Council regulations has its own licensing architecture, administered by competent authorities of the relevant member state. An organisation operating across all three regimes – as many large humanitarian bodies do – needs a position that satisfies each independently. A licence from OFSI does not authorise a transaction under OFAC, and vice versa.
What risk flags arise in NGO and humanitarian authorisation matters?
Humanitarian and NGO authorisation matters cluster around a set of recurring risk patterns. Identifying them early determines whether a matter can be resolved through the licence route or whether the transaction needs to be restructured.
The general-licence gap. As described above, the most common trigger is an activity that appears covered by a general licence but fails on a specific counterparty fact. Organisations relying on general licences should document that analysis for each transaction, not assume it. When the general licence was last read, and by whom, matters if OFSI later examines the position.
Designated-person proximity. The presence of a designated person in the governance, ownership, or funding chain of an implementing partner does not automatically prohibit the transaction, but it requires analysis. The UK test for ownership and control is qualitative, not purely numeric. Does the designated person have decision-making authority? Do they influence financial flows? Those questions matter.
The indirect-benefit risk. Even where the implementing partner is not itself designated, OFSI will scrutinise whether the disbursement could result in funds reaching a designated person. Post-disbursement monitoring controls – sub-granting restrictions, expenditure reporting, audit rights – are part of the licence application, not an afterthought.
Multi-regime exposure. Humanitarian organisations funded by US donors, operating with EU institutional support, and active in a UK-sanctioned environment face three sets of obligations simultaneously. A position that satisfies OFSI may not satisfy OFAC. The divergence between the UK control test and the OFAC mechanical ownership rule creates the risk that an entity clear under one regime is problematic under another.
Reporting obligations. Where an organisation knows or reasonably suspects that it holds frozen assets or has dealt with a designated person, it has a reporting obligation to OFSI under the applicable regime. Identifying that obligation – and meeting it before OFSI asks – is standard practice in any matter where a designated person appears in the counterparty picture.
How was the specific-licence application prepared and decided?
The preparation of the specific-licence application proceeded in structured stages. The first was a detailed legal opinion on the scope of the general licence and why it did not cover the transaction – not because OFSI required this as an exhibit, but because the application needed to address precisely the point on which the general licence was insufficient. An application that does not explain why the general licence does not apply invites OFSI to suggest it does.
The second stage was a comprehensive account of the implementing partner's governance structure, the identity and designation basis of the board member, and the evidence on which the conclusion rested that the designated person did not control the partner within the meaning of the applicable regime. This was factual and documentary: governance documents, board minutes showing the role was advisory, correspondence confirming the designated person had not participated in financial decisions.
The third stage was a detailed account of the humanitarian purpose and the programme's beneficiary impact. Timelines were provided: the expected gap in programme funding if the licence was not granted within a defined period, the number of beneficiaries affected, the nature of the humanitarian activity. OFSI was asked to treat the application as urgent.
Post-disbursement controls were set out with specificity: sub-grant agreements restricting the implementing partner from passing funds to any designated person, monthly expenditure reporting to the applicant, and an audit right exercisable on short notice.
In a recent matter, a UK humanitarian organisation faced exactly this configuration. We prepared the specific-licence application in full, including the governance analysis and the post-disbursement control framework. OFSI granted a conditional specific licence. The conditions required periodic reporting and a confirmation mechanism before each tranche was released. The programme resumed.
If a transaction has already been flagged or a filing has been refused, an early review can preserve options that narrow with time. Contact us at info@caldervance.com.
Cross-regime considerations: OFAC, EU, and the multi-jurisdiction humanitarian operator
Few large humanitarian operators work in a single-regime environment. The practical question for the compliance team is not only whether OFSI will grant a specific licence, but whether the transaction is authorised under each applicable regime.
OFAC's humanitarian licensing position is set through a combination of general licences and the specific-licence route administered by OFAC's Licensing Division. OFAC's general licences for humanitarian activity in heavily sanctioned environments are, in some respects, broader than OFSI's: they may extend to transactions that would otherwise be prohibited by the SDN-based asset-freeze prohibitions. However, the scope conditions and recordkeeping requirements of OFAC general licences must be read carefully. The 50 percent rule – which treats any entity owned 50 percent or more in the aggregate by blocked persons as itself blocked, regardless of whether it is listed – can catch implementing partners that OFSI's control test does not. An entity with a 30 percent stake held by a designated person would not automatically be blocked under OFAC; but if two blocked persons together hold 50 percent or more, it is. That aggregation analysis must be run independently of the UK position.
The EU regime operates through the competent authorities of the relevant member state. The relevant Council regulation establishes the licensing grounds; the national competent authority processes the application. For an organisation with EU institutional funding or EU-based operational structure, a separate authorisation under the EU regime may be required. The EU control test for ownership and control is qualitative, aligned in structure with the UK test but not identical. Decisions of the EU General Court on the scope of the control test provide interpretive guidance, but the standard applied in licensing decisions is the Council regulation's own language.
In practice, multi-regime humanitarian operators should map their regime exposure at the outset of any new programme, not transaction by transaction. Where the programme will require recurring disbursements to the same implementing partner, seeking a specific licence that covers the programme as a whole – rather than each individual payment – reduces both transaction cost and regulatory risk.
What is the lesson for NGOs and humanitarian organisations operating in sanctioned environments?
The lesson from this matter is structural. The humanitarian purpose of an organisation's activity does not, by itself, determine the legal position. The financial-sanctions rules apply to the mechanism of the transaction, not only to its intent. An organisation that assumes it is covered by a general licence because its activity is charitable, without reading the licence against its specific counterparty facts, is carrying unmanaged legal risk.
A common objection in our practice is that applying for specific licences is too slow and too uncertain for operational programmes. That objection reflects a real operational tension, but it is not well-founded as a legal position. OFSI does process urgent applications. The processing period is not unlimited. The application, if prepared properly, gives the organisation a documented legal position from the point of submission. And the alternative – proceeding without a licence in reliance on a general licence that does not cover the facts – is a potential breach of the applicable UK financial-sanctions regulations, with attendant reporting and enforcement exposure.
The further lesson is that cross-regime analysis should be built into programme design, not bolted on when a transaction is blocked. Where a programme will operate in a UK-sanctioned environment and involves US-connected donors or EU institutional funding, the regime analysis should happen before the first payment is committed.
The myth that "humanitarian organisations do not face enforcement for sanctions breaches" is one we address regularly. It is not accurate. OFSI's enforcement powers extend to the charitable sector. The applicable UK financial-sanctions regulations do not exempt humanitarian bodies as a category. The licensing route exists precisely because the rules would otherwise prohibit the activity; licensing is not a courtesy but a legal requirement.
Related practices
- Frozen account management and BIS/EAR licensing – managing frozen assets and EAR licence applications across US and UK regimes.
- Legal fees licence: a BIS/EAR matter – how a specific authorisation for legal-fee payments was structured and obtained.
- Legal fees licence: a cross-border matter – multi-regime authorisation for legal costs in a cross-border sanctions context.